Looking to exit from your business in the next two to five years?
We can help you achieve the best outcome.

Looking to exit from your business in the next two to five years?
We can help you achieve the best outcome.

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From manager to owner: finding your authentic leadership style

Hopefully, your style will be whatever feels authentic to you and makes you effective in your role. However, these two things are not always aligned. 

 

A significant number – at least 50% – of our clients look to some form of exit that involves their management team stepping up to ownership. For small/medium sized owner managed companies this is an understandably attractive form of ownership transfer for the following reasons: 

  • the existing owners and the management team are known to each other. 
  • both know the business (although the extent to which owners share financial details with managers varies considerably).  
  • the process is usually positive rather than confrontational. 
  • there is continuity by keeping the ownership ‘in-house’. 
  • for the current owner, there can be a sense of ‘legacy’. 

 

There can also be potential drawbacks such as the management team not having the ability nor willingness to put money into the transaction, the extended period over which an agreed valuation may be paid and how capable managers will be at moving into business ownership. And that’s where style comes in. 

 

If you’re already a manager in the business, no matter how capable and experienced, the step up to being a business owner is significant. There are many responsibilities and obligations that fall to a business owner that aren’t present in the role of manager – particularly if the latter has not been a director. Many of these can be learnt and, under the guidance of the owner, the process can be smooth and rewarding. 

 

More difficult to develop is the style of business owner the manager needs to become.  Ideally the style of manager you are will also be well suited to becoming the business owner – after all that may have been a key factor in the owner looking to you to step up to the role. If not, a natural starting point is to emulate the current owner. 

 

An existing Henchards client is already part-way through an ownership transfer to the management team, who have now assumed day-to-day responsibility for running the business. In a recent conversation they talked about the need to give a team member ‘the hairdryer treatment’ (a reference to Sir Alex Ferguson when manager of Manchester United). On further probing it became clear that this intervention was not a natural style but adopted because the outgoing owner used to act in this way. 

 

There is a lot to take on as you take over from the previous owner and quite possibly any thought of your leadership style may get relegated to an afterthought. Easier to ‘emulate’ the current owner than invest in establishing the right style for you. However, starting out in the right way is important to promote confidence and continuity to the rest of the business.   

 

Ideally you are already the leader you need to be. If not, there are thousands of books, articles and pieces of advice on leadership style. One of these styles may be attractive and feel authentic to the point that you want to develop it yourself. Whilst there are trends and ‘in favour’ styles you can find advocates for pretty much any leadership style. Once you’ve found your own authentic style, mentoring and coaching support can help build the self-awareness and assurance needed to confidently step up to business ownership (just one of the services we provide).  

 

When thinking about the style of business owner you’re going to be, I’d offer the following guidance: 

  • Be self-aware about your style of leadership – your style will say as much about you as the things you do or say. 
  • Be yourself and be true to yourself – don’t simply mimic someone else or try to adopt a style that isn’t you even if you think is appropriate. 
  • Be consistent in your approach as consistency provides more confidence and certainty for your team. 
  • Be responsive to context – some situations require a more directive approach but do so in your own way. 
  • Be open to learning, developing and evolving as a business owner – no one gets it right all the time. 

 

The journey from manager to business owner can be highly rewarding both from a sense of achievement and financially. It is a big step with plenty to take on and leadership style is just one facet.  It’s not quite a case of “it ain’t what you do, it’s the way that you do it” but it’s not a bad mantra to consider. 

If you are a business owner looking at a potential ownership transfer to your management team, or if you are a manager with the opportunity to step up to business ownership, we have many years and many successful client assignments from which to help you. Contact us today to find out more.

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Testimonials

Ian’s ongoing input has made sure that plans have not only been laid, but implemented, completed and analysed. Ian is an invaluable asset to our business.

Alistair Henderson
Managing Director, Tuplin

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