Engaged Ownership

Chapter 16When an Owner Also Runs the Enterprise

For an owner-manager, the day-to-day challenges of running a business may crowd out thoughts about ownership and core capital.

When an owner also leads the business, her multiple roles may make it more difficult to reach consensus around shared purpose and vision with other owners and the risk of conflict among them may increase. The source of the conflict isn't hard to identify: for an owner who also leads the business, running the company is her occupation and often a preoccupation as well. The drive to achieve business success that is the hallmark of many of the most successful family managing owners can overwhelm their thinking as owners. Running the business is their primary focus, and it can be difficult for them to step back alongside their fellow owners and think about core capital more broadly. Even for those managing owners who want to be mindful of ownership issues and the vision of their fellow owners, the day-to-day challenges of running a business may crowd out thoughts about ownership and core capital.

A founder not only builds a business, he creates a culture and an established pattern of decision making around business issues. A child who succeeds the founder in running the business can find it difficult to make decisions together with other family members who own shares but don't work in the business, because these non-managing owners don't have the same level of information about the business, or even a ...