Monday 17 October 2016

Are You Thinking About Hiring a General Manager?

Posted by at 10:27 AM in

By definition the General Manger typically assumes responsibility for the total operation of the company. This includes both the administrative operation and the production operations it supports.

In the restoration industry the administrative operation might include development of the administrative team, maintenance of financial records, job costing, and upkeep of the purchase order system and collections. Administrative operations also include development and supervision of office personnel and marketing staff; human resource management; payroll; and supervision, training and performance evaluations for department direct reports. Additionally, the General Manager is responsible for the overall production side of the business. This includes estimating, project management, production scheduling, material purchasing, profit margins, subcontractor selection, workflow systems, and customer service and satisfaction.

Yes, that’s right – the General Manager is responsible for everything, and each level of work and activity in the business.

In the vast majority of Restoration businesses, the owner assumes the role of General Manager whether or not they bear the title. When asking whether your company needs a General Manager the real question is “what does the owner intend to do?” The biggest mistake owners make is to remain the functioning GM of their business while conferring the title on someone else. Titles matter because they suggest roles, responsibilities, and boundaries of duties. The active and onsite owner should in most cases not pass this title to someone else unless they are planning to mostly disengage from the daily business operation to step back from the business or work mostly on the business's development. In most smaller to mid-sized restoration companies the owner remains the operating General Manager, and adds direct reports to the organizational framework who oversee major divisions of work. Adding an Office Manager to oversee all administrative functions makes good sense. Instead of having 4 people reporting directly to the owner there is now only one who in turn is responsible for the work of the others. Adding a construction manager to supervises estimators, construction coordinators, and project managers expands a company’s capacity to take on more work while freeing the owner to focus on other matters of business development.

Adding a General Manager seems most organizationally and operationally appropriate for a company that has exceeded $4 - $5 million in gross revenue.

There are other situations that could lead to an exception to this general rule of thumb. Injury or illness may sideline an owner requiring a substitute to replace them at the helm. Age could lead an owner to want to step back or step away from the business. If they are not yet ready to sell the business a General Manager would fill the leadership role to be vacated by an owner. An owner may take on a major task such as beginning a new business, starting a satellite office, or adding a new service that requires a substantial amount of time and energy. Adding a General Manager to the company could provide freedom for these pursuits. Keep in mind that titles matter. Begin with the duties and responsibilities of the person you are considering, and be very clear with what they are to do and not do. Then determine the best titles to describe the role. Many times you will discover that the role you are considering the person for is not that of General Manager but Operations Manager, Construction Manager, Executive Administrator, or some other title which more accurately describes the position.

Don’t look for the grandest or most lavish title to bestow, rather identify the best functional language that most accurately describes the individual’s role, responsibilities and duties.

The position title should make it reasonably clear to the individual and others the major duties the person assumes responsibility for in the company. The more grandeur the title the more compensation and freedom the recipient expects. Lofty titles often create unrealistic expectations that could lead to hurting the owner-employee working relationship and ultimately the employee’s performance. Be clear what you really want in a position and what title you give it. In most cases it is not really a General Manager owners seek. Reference: 12 Month Coaching Plan – The Business Transformer – Double, Even Triple Your Business in 18 – 24 Months