Some people are born with incredible natural aptitude for managing people. Many years ago I observed a girl on a playground. She was about 5 years old playing with a group of children the same age. At one point some play rules, or another important issue, needed to be established, and I was amazed not only by the assertion of authority, but also by the uncanny logic exhibited by this extraordinary little person. She started with a commanding, "Children, listen to me!" and continued laying out a proposal that nobody has any inclination to dispute. I remember thinking to myself, "That's a naturally born leader!"
Unfortunately, people like that constitute a small percentage of general population and, strangely enough, they are even rarer among business owners. Just because someone had a great idea and entrepreneurial drive to establish their own business doesn't mean that they also have sufficient managerial aptitude. Only few of them had formal business management education and most of them never worked for anybody else long enough to gain on-the-job expertise.
This pretty much leaves their leadership skills at intuitive level at best. And if the sixth sense fails them… well, all kind of sad things occur: they cannot see the difference between a pompous phony with an impressive voice spewing well formulated lies and genuinely knowledgeable, but quiet workaholic; they have very little or no understanding of delegation of duties; frequently they cannot even figure out their own roles in the company.
The most common executive management conundrum such Presidents/CEO's (especially first generation of business ownership) encounter after the enterprise reaches the "established" stage of development can be described as follows. Their entrepreneurial talents draw their minds to further commercial improvements, to generation of new ideas that will help to expand and strengthen the business. At the same time, the wonderful feeling of accomplishment plays dirty tricks on them: subconsciously they want to rest on their laurels – they feel that they deserve to work less, to take summers off, etc. etc. Moreover, since the business is their child that they have born and reared applying their own talents and titanic efforts, they have incredible aversion to the idea of letting other people to completely take over vital tasks of the company's ongoing functionality and maintenance.
(Side note: I am really tempted to state here that the majority of them are control freaks. However, I don't have scientific evidence for that, just my own and my colleagues experience. More importantly, it does not make a difference, both obsessive and perfectly balanced CEO's display the same symptoms.)
You have to agree that this position is absolutely psychotic. What do they do? They resort to their favorite style of management – what I personally coined several years ago as "Hands-Off Micromanagement."
Let me show with this example how this control style may manifest itself. On one hand, the CEO can completely forget that you are working on establishing a $10 million credit line with a new bank, or that you have just upgraded your accounting system to a new version that basically made the entire budgeting function automatic. But on the other hand, he keeps asking without a fail every month why the Federal Express bill is $2,000 – when he was starting the business it was never more than $100.
I am sure a lot of my fellow CFO's and Controllers have recognized the disease as they have to deal with it and the frustration it causes on daily basis.
The Frustrated CFO 