By John K. Allen, Ed.D.
Reprinted with the permission of Business Worcester
I can’t deal with this job anymore. All the game-playing and incompetence. It’s a wonder that this company makes any money at all. I’ve got to get out of here. Maybe I’ll start my own business. Then I won’t have to deal with this anymore. I’ll be in control of my own destiny.
A common dream, but what is it really like to run a business? A recent survey of the Smaller Business Association of New England membership by Allen Associates in Northboro and professors Richard Hall and Karyn Losocco of the State University of New York at Albany sheds some light on the realities.
The 540 CEOs of primarily private companies who responded (a 31% response rate) answered questions about their businesses, attitudes, lifestyles, and the challenges they face as executives.
Most respondents left their prior jobs because they wanted a better opportunity (45%) or were dissatisfied with their position (21 %). They received support in starting their business from potential customers (80 %), spouses (78 %) and friends (71 %). The greatest opposition to their start-up decision came, understandably, from their former employers.
The experience of Louis A. Kane, president of Elkay Products, is common. He recently sold his business which was founded with his brother Benson 25 years ago to Labsystems in Finland.
“It was a typical entrepreneurial decision,” Kane says. ‘I had been a sales representative, and before Elkay my brother and I had started a medical laboratory in Worcester. We saw an opportunity to fill the disposable needs market and we decided to go after it.”
With a few dollars borrowed from their mother and the support of their family, they launched Elkay, a Shrewsbury manufacturer and distributor of disposable laboratory equipment.
While popular literature paints the picture of the entrepreneur as a wild-eyed opportunist, “real life” CEOs apparently have rather conservative goals. Most describe perpetuating the business as their primary goal. Only 24 % view selling the business as important or taking the firm public.
These are intrinsic sources of satisfaction which propel the CEO toward achievement. Charlotte Klein, president of Charlotte Klein Dance Centers in Worcester and Westborough, comments, “My major goal is to provide the best dance education I can and to teach the dancers to feel good about themselves. I really don’t want to get bigger in terms of numbers. We have students dancing on Broadway, in New York, students getting into good schools like Julliard, and three students working at Disney. The goal is to keep doing what we’re doing. Taking the business public or franchising is something that I do not want to do. As big as it is (1,000 students)…it has an element of being a family.”
What’s particularly satisfying about running a business? “Seeing the people able to expand and seeing them promoted from within,” says David Grenon, president of the Protector Group Insurance Agency in Worcester. “The greatest thing is that you develop strong personal relationships with both clients and personnel. That’s a really good feeling. If they grow, you feel that you have had some small part in that growth.”
LR McCoy’s Poler feels similarly, saying, “Watching people grow and develop in their own right is satisfying. It’s fun to make money corporately, because that’s a measure of what we’re doing. It’s also fun to do things for people; a bonus, a new benefit, some tangible, unexpected sign of appreciation.”
“Taking the shy child who does not want to leave her mother’s side and watching her blossom into a poised young lady” is the greatest source of satisfaction for Klein. “To see them grow up – you can’t measure that in dollars.”
CEOs cite independence and having control over their own destiny (21 %) as the primary advantages of sitting in the executive chair. Not enough time (83 %) and having to personally handle too many tasks (74 %) are rated as two of the most pressing problems of executives.
“Time is always a problem,” Grenon says. “But you’re in control of your own destiny. You try to prioritize and you do what you have to do.” Trying to maintain appropriate control while “letting go” and sharing responsibilities with subordinates is, in fact, one of the most pressing issues confronted in working with business owners trying to manage growth.
Grenon says, “I felt solely responsible three or four years ago, but I don’t feel that way now, mostly because of delegating responsibility and authority. We created an executive management team. Now there are only two people who report directly to me. Each member of our staff is very familiar with our mission statement and our organization chart. That creates a very strong corporate culture.”
Most of the survey respondents indicate that they are the primary decision-makers regarding products, services, and personnel, but share many decisions about work methods with other managers and first-line supervisors.
Even though employment is reported as stable (less than 10 % turnover in 61 % of businesses), finding qualified employees is cited as a critical problem by 83 % of respondents.
Finding qualified staff is “very important and very difficult” says Klein. “My standards are high, I am very demanding of what my teachers do. I am more comfortable with people who I have trained who know what I want.”
Most firms seek new employees from a variety of sources including newspaper ads/journals (79 %), employees’ friends (49 %) and employment/search firms (38 %).
Sticking with a company, provided the environment is one which fosters professional development, may well be the best route to management. The personal relationship between CEO and employee in the smaller private firms seems to be an important element in both low turnover and the firsthand knowledge of the strengths and abilities of internal candidates for management and supervisory jobs. In fact, 93 % of respondents indicated that most or all of their employees call them by their first name.
Psychological research suggests that having sources of support available, whether or not one uses them, serves as a buffering agent on the effects of stress. Our study bears this out. When faced with a problem, CEOs turn to various resources, depending on areas of need:
Having a strong network of personal and professional supports may explain the high level of satisfaction among these executives even though they face highly demanding and stressful jobs. Both Kane and Poler have been members of the Youth Presidents’ Organization which sponsors a forum group, a monthly meeting of executives from different organizations who share common concerns and solutions. Simiarly, Grenon meets twice annually with a group of insurance professionals to share ideas and has done so for the past 12 years.
CEOs work hard, averaging 55-hour work weeks. A third indicate that they take work home daily; about half weekly. Only four % indicated they never take work home.
“It’s a difficult balance, and you never quite get it right,” Poler says. “I’m always setting priorities and the job is never done. When people say they’re done for the day, I can’t relate to that. Frankly, I’d never want to have everything finished.”
Elkay’s Kane talked about the tradeoffs between work and family life. “There has to be an acceptable balance. My family has always understood how important it was to me. If I knew there was something important I would be there, but you have to make sacrifices.”
While the job of CEO may be stressful, at least it is not boring. Eighty-seven % of CEOs indicate that their time rarely or never drags. “I get calls at all hours of the day and into the evening,” Klein says. “It’s all encompassing. But I don’t resent it, because I love my work.”
In spite of all the headaches and problems, CEOs are overwhelmingly positive about their chosen path. They report high satisfaction with work (90 %), life in general (90 %) and also with family/personal life (91 %). In fact, knowing what they know now, 89% would repeat their decision to run their own business.
© 2004 West Falmouth Associates. All rights reserved.