I meet with thousands of business owners throughout the year. During these meetings, I’m often asked, “What is the one piece of advice that you would give to business owners?” My answer is always the same. We must reduce owner dependence. However, in order to reduce owner dependence, we need to understand the concept of “the power of two to influence one.”
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I’m a firm believer in numbers. I believe that numbers matter. They have significance. We often hear of the power of three, but I’d like to examine the importance of two, for today’s purposes. When we look back in the Bible, there are several instances where people were told to go in pairs. Jesus often sent disciples two by two to different cities. Likewise, Noah was commanded to take all the animals of the Earth, two by two, and load them onto the Ark. We see this yet again when speaking of a husband and wife.
There is power in pairs. Having two people, two voices, two mindsets is a benefit. So, when we break the power of two to influence one, it can be a detriment. In fact, research from the Dawson Institute has found that children living with both biological parents are 20 to 35 percent more physically healthy than children from broken homes. Furthermore, children are 50% more likely to develop health problems following a divorce.
We see this in today’s political landscape as well. Too often, people are trying to silence the thoughts and opinions of those that they don’t agree with. This is to our detriment as a society. Having two different areas of expertise working toward one common good benefits us as a whole.
We can apply the same principles to business. Not long ago, Senator, Marco Rubio, cited a statistic showing that there were 30MM single-member businesses in the United States. That dwarfs the number of corporations and partnerships. The more diversity of thought that we have in the managing of our businesses, the greater the overall health of the business. But what is the power of two to influence one?
My dear friend, colleague, and personal business advisor, David Kent, used to pull me aside and say, “Justin, you’ve got to get out of your own way.” Like many business owners, I am a control freak. So, the idea of stepping out of my business scared me, if I’m being honest. It wasn’t until David walked me through the power of two to influence one concept that I began to really understand how it could benefit my business.
David comes from a corporate background and understands that corporations increase their value by bringing in new talent. Through diverse areas of thought and expertise, they are often able to generate a better outcome. Using that model, David works with small business owners all over the country, to bring in general managers, operational managers, etc., to manage the day-to-day operations of the business.
This creates the space for the manager to bring in other people to operate the business. Thus, removing the business owner from the epicenter of the organization. This is so important to increasing the value of the business because if the owner is at the center of the business, then it isn’t transferable.
We now have the owner and the manager/management group. From there, we bring in the third component, the consultant or advisory board. Small businesses often use a business advisor to fill this role. Their role is to advise the owner, working with them to provide an overall vision and direction that can then be passed down to the management.
Now that we have the foundational components, we can look a little closer at how the power of two to influence one actually works. The concept is easily illustrated using three boxes that represent the three entities involved in the business operations.
The owner and the advisory board work together to inform and influence the management of the business. Usually, this has to do with big picture type of objectives, such as leadership, working to increase the value of the business, and preparing it for an eventual transfer.
However, the power of two to influence one also works in the opposite direction. The management can report things to the board that the owner wouldn’t otherwise know about. Therefore, the management and the advisory group are also working to educate and influence the owner of the business.
The benefits of this concept take place on multiple levels. On one hand, the owner no longer needs to be present on a daily basis. This increases the value of the business by way of transferability. Additionally, people act differently when the owner is in the room. It’s just human nature. So, with the owner being removed from the business, the management is free to handle the daily operations.
On the other hand, business owners usually go into business because they love their specific trade. They aren’t typically skilled general managers and often become frustrated with the headaches of trying to wear too many hats within their organizations. The power of two to influence one concept frees them from that obligation.
As I said at the very beginning, my number one piece of advice for business owners is to eliminate owner dependence. The power of two to influence one concept makes that possible. I wanted to provide you with a quick and consolidated list of the steps to achieve owner independence, so here they are.
Friends, there, you have it. The simplest path to eliminating owner dependence is through the power of two to influence one. We’ve taken great corporate concepts and applied them to the world of small business. If you don’t have an advisory board, we can help you. Reach out to us and we’ll get you set up with one of our expert business advisors.
Folks, life is hard. But life is good. Removing yourself from the center of your business can be frustrating but it doesn’t have to be. With the power of two, we can make owner independence, at least financially simple.
For more information on how our business experts can serve you and your small business, reach out to us. The Financially Simple team is here for you.