How To Avoid Being A Lousy Business Owner

The three things any top-tier CEO absolutely must do

The rule of thumb is the higher up in the organization, the higher the compensation. That’s all well and good for most positions because you generally do what you have always been doing, but better. However, things get a little less clear at the very top. So, what exactly should you be doing if you are the CEO?


What the heck is a CEO?

Before I continue, I want to make a key point. Most business owners don’t think of themselves as the CEO. It sounds a great deal more corporate than they feel. They, and everyone else in their business agree, merely think of themselves as the founder, the owner, the boss, or simply the “chief”.

Actually, that is the way I think of myself. So, as your read the concepts below, think to yourself, “this is what I should be doing as the head of my company.”

First a bit about the term CEO. It’s short for Chief Executive Officer, one of the C-level positions in a company. A company can have a variety of C-level jobs within the senior management team. For example, the CIO, Chief Information Officer, is in charge of all the data. The COO, Chief Operating Officer, handles all the operations. And, the CFO, Chief Financial Officer, takes care of all the finances.

It’s easy to say the CEO manages all the executives and she does, but there are really only three components to the CEO’s position making it one of the easiest to define. But, one of the hardest to execute.

  1. Establish and maintain the Vision.
  2. Create and live the Culture.
  3. Intercept Entropy.

Let’s look at these three job responsibilities in turn.

If you are going to be a high-level, preeminent business owner and leader, you have to ace these three.

Establish and maintain the Vision


The leader must develop the overall vision for the company. The vision is a concept or a dream about what the future could look like. The more vivid the you can make it, the more real it will seem to all the employees. The more real it is the more likely it will provide a sort of catalytic charge for everyone. It should cover about five years. There are several reasons for this time horizon. Including wanting it to be far enough into the future that no one but you can see it.

Think of your entire company seated in a bus. Picture the bus barreling down a twisty highway in the middle of the night at sixty miles per hour. Your head of operation is driving the bus and you are standing in the aisle telling everyone about the fantastic destination that’s miles and miles and hours and hours ahead.

The lights are on and everyone can see everyone else on the bus. In fact, they can see each better than you can (More on that in a post I have planned for the future).

They can also see the highway as far out as the headlights shine. You do not have to tell anyone about their fellow employees or the next several hundred feet of the road.

But, no one can see far down the road because it is all black. They don’t even know what the road looks like. That’s your first job—to paint a wonderful picture of the distant place—the vision. The better you do it, the more confidence everyone will have in the long term and the more the employees will focus on the business at hand in the bus and on the short strip of highway in front of the bus.

Create and live the Culture

The second major component of your job is to create the culture. The culture is the way things are done from a behavioral standpoint.

The culture includes such things as philosophies, beliefs, and core values. Everything driving the way everyone acts. This is a very big area and includes everything from how everyone is paid to the way vendors are treated. You are responsible for determining all of that. And, you are responsible for living every component part of your culture.

No one else can do it unless you do. Otherwise, the business culture grows organically and not in the way you want and need.

Imagine the construction company with a rule that the fuel pump in the yard is for company equipment only. How will people actually behave if the CEO fills her own pickup with that pump?

Intercept Entropy

The third and final component of your job is to deal with entropy.

Simply stated, entropy means all things in nature tend to migrate from order to disorder.


Of course, you know intuitively this natural phenomenon and yet most people actually assume order is more natural.

As the business leader, you to be on constant guard to see this normal movement to disorder and to determine the appropriate action to take.

You must have a routine of inspecting all the multiple components of the entire enterprise on a periodic basis. The major pieces you need to review include operational results, internal systems and procedures, external forces (i.e., customers and vendors) and environmental factors.

By way of illustration, think of the new customer onboarding procedure. Most companies have a detailed way of checking credit, creating terms, determining service levels and the like. Over time, a “little exception” is made to begin doing business with a risky startup and the system begins to break down. The chief needs to notice this decay and make appropriate corrections.

So, it’s a simple job—just three things to do.

Here’s the key point

You can not ever be the best CEO in your industry or even the best one for your business if you are “too busy”. Most of the time, business owners are “too busy” if they have their fingers in various parts of the company too much of the time.

Forget about doing everything, just focus on doing these three things. You will quickly see and reap the benefits of doing so.

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