How Omnipotent Are You?

What you’ll find:
● Why small business ownership is one of the world’s most powerful jobs
● The huge difference between checked and unchecked power
● Seven ways to positively share power to benefit your business and stakeholders

Here’s a very different perspective of small business ownership that few small business people discuss. It involves the omnipotent power that small business owners possess, whether or not they’re conscious of it.

“Omnipotent” means “having unlimited power or authority, force; all powerful.”

Power and Absolute Power

Lord Acton’s famous quote is that “power tends to corrupt and absolute power corrupts absolutely.”
Acton’s principle applies to privately owned and closely held small businesses and their owners. In this instance however, I think his quote should be modified to read “unchecked power tends to corrupt and absolute unchecked power corrupts absolutely.”

The Power of Ownership

Owners of private small businesses have a monopoly on power. They can act, move, decide, hire or fire, and dispense funds with complete impunity. They can unilaterally set direction, policy and procedures. They are accountable to no one inside their businesses about their actions and consequences.

In short, owners have dictatorial authority and control over what, how, when and if something happens in the business. No one else inside the company has the legal, practical and operating authority to say “no” to an owner about anything—unless the owner permits this.

Back to Lord Acton. If the business owner doesn’t intentionally and consciously put systems in place to share power, then the insidious and virtually inevitable corruption of absolute unchecked power takes hold and grows stronger each day.

This extraordinary level of operational control and authority brings with it another equally important aspect of ownership power: responsibility.

Your Responsibility

Owners must ensure that the business isn’t too dependent on them for all decisions, directions, policies, practices and actions.

Here’s a list of the main practices and actions for which a business owner often has sole responsibility:

Making sure the business is open and inviting of differing opinions, views and ideas—internally and externally—about key aspects of its management.
Guarding against being dangerously dependent on one or two key customers, whose loss could seriously damage or be fatal to the business.
Ensuring that all roads in the business don’t lead to the owner all the time. Delegating real authority, responsibility and accountability to others in key functional areas.

Seeing that vital business activities and functional areas—including these—gradually become system-centric rather than person-centric:
•Customer support and service
•Accounting and cash management
•Customer billing and receivables
•Developing personnel policies (that are fair and equitable for all employees)
•Hiring competent people (who fit the business for important jobs)
•Developing and refining clear strategies, tactics and structures for generating revenue
•Ensuring that revenue is profitable and quickly turns into usable positive cash flow

The business owner does not and should not personally “do” all of these things. The owner’s job is to make sure these systems are built, run and refined by others for the benefit of the organization.

What about the “Corrupts Absolutely” Warning?

There are two ways a small business owner can use the inherent authority of absolute power in the business:

1.Open the business to shared authority, accountability and responsibility with others—inside and outside the operation—so it benefits from different ideas, opinions and views from trustworthy people.
2.Close the business to internal authority and accountability sharing, and insulate it from outside ideas, views and opinions.

The first path is the best way to guarantee that ownership power will be a positive factor in the growth and nurturing of the business.

The second is a sure-fire way to keep the owner’s power unchecked. This will inevitably disable the business. It creates a closed, insulated echo chamber. Now the only voice and views that are heard come from the owner—and are parroted back by everyone else.

Here are seven proven ways for a business owner to positively check his or her absolute power. These help you channel some of your power to others, which ensures the organization isn’t fatally dependent on your unchecked power.

1. Build and use a Board of Advisors
2. Join or create a mastermind group of other business owners
3. Hire an experienced management coach to offer other views, perspectives and—most of all—hold you accountable for your actions
4. Engage an experienced and skilled advisor (in one or more fields) who will provide a trusted voice and perspective, and listen to that voice
5. Build and actively use a Customer Advisory Board
6. Create and tap an Employee Advisory Board
7. Delegate operational and functional authority, responsibility and accountability to key people in the business, and support them in using this power

It’s Up to You

We all have incredible strengths and attributes. But we don’t have everything required to run a successful, sustainable business, so we need help from others as our businesses evolve and change.

We can choose to build positive structures and mechanisms as checks to the inherent power in small business ownership.

Or we can choose to hoard that power, creating a closed, insular organization that listens and responds to only one voice and direction: ours.

Choose wisely. You, your business and its stakeholders will reap the benefits.

Key Points

•Owning and running a private, closely held business is a very powerful job.
•This power can be used for good or ill.
•There are seven ways you can place a positive check on power and distribute authority and accountability.
•You can’t—and shouldn’t—do it all. We have strengths to give and need help from others. Have the courage to let others help.