Working On Your Business Versus In It

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In past columns, I've stressed the importance of vision and developing a road map for your business, whether written on paper or not. Part of this includes understanding your role in the business and how this will change over time. When starting out, you will be wearing many (if not all) hats in terms of setting up supplier relationships, taking and fulfilling customer orders, answering phone calls, dealing with customer complaints, and much more. How much you continue to be directly involved in many of these tasks depends heavily on your vision of what you want your business to be and how much this requires you to work on the business rather than in it.

A useful way to look at the evolution of your role in your business is through a framework developed by Drs. Alan Filley and Ray Aldag of the University of Wisconsin in the late 70s. They observed that small firms generally fall into one of three organization types: Craft, Promotion, and Administration. In my experience, this framework is very applicable and has helped many entrepreneurs that I have worked with to better understand the relationship between themselves and the direction of their organizations.

Craft Firms. Firms that fall into this category are many times started by an entrepreneur that is particularly skilled at a certain craft, such as a pastry shop started by a talented baker or an auto repair shop started by an expert mechanic. Though not professional managers, these entrepreneurs see an opportunity to put their skills to use in business, and the business depends on that individual continuing to be personally involved in creating a product or providing a service to customers. These firms are characterized by little change or growth, many times because the owner is content with the business as is, but also because the owner is busy working in the business rather than on it. This is a fine type of business, and many owners of craft firms make nice livings doing something they love to do. However, in developing a vision for your organization, it is important to understand that these are not organizations that run themselves and that they will be difficult to grow until the owner removes himself or herself from day-to-day operations.