Dealing with a business owner's inner dictator is one of the hardest parts of the job, as Tony Eldred has found.

I find businesses and the people who own them quite fascinating. Imagine if you were given a brief to restructure a business and the first thing you had to do was sit the owner down and deal with impending alcoholism or marital problems between the two major partners.

That’s why I had a psychologist on my staff for many years – some of the things we have to deal with require professional sensitivity and skills that my training didn’t prepare me for.

We usually have first contact with business owners at times of stress. I sometimes joke that our ideal customer can’t hold a coffee cup with a steady hand. That’s an exaggeration, but it’s not too far from the truth. One of the sad things is that pride usually prevents them from seeking help until a problem becomes a crisis.

A well-conceived business will usually grow with a will of its own; it gets some kind of inertia. Word of mouth referral creates pressure for expansion which is fuelled by the owner’s desire for increased status and more complex challenges. One day they wake up and find that they’ve created a monster that has yielded financial success but has totally destroyed their lives.

At the heart of most mega-stressed business owners lies an unwitting totalitarian dictator. Their obsessiveness and desire to stamp their personality on everything they do means they will not delegate decision-making responsibilities to their staff. They don’t trust them to do the right thing, so they manage by giving tasks rather than responsibilities – sort of like the old, very outdated Henry Ford principle that you ‘bring your body to work, leave your mind at the door’. The owner ends up working long hours because the business falls apart from lack of direction.

Sorting out dictatorships is an interesting process because it requires the owner to accept radical change. I’ve even had one say to me, straight faced, “I want you to fix it, but don’t change anything; I’m happy the way it is.”

He wasn’t stupid, he was just threatened by the unknown and wanted to cling onto the past like a comfortable old overcoat. I believe Werner Erhard best encapsulated the necessity for change when he said “If you don’t change your direction, you’ll end up where you’re headed”. If you’re not emotionally involved it’s easy to accept the logic, but if you’re too close, it’s much harder.

As a consultant you also have to understand people's psychological needs or you can come unstuck. What an owner will tell you when they are stressed to the point of insanity may be entirely different to what they will say when the pressure is off. For instance, we once had a business owner who engaged us to structure his resort business so he could free himself from crisis management and concentrate on property development.

After a nationwide search we employed an excellent general manager, who won the respect of the staff and began to professionally restructure the business. Then we got a phone call from the new GM saying the owner was refusing to talk to him or return his calls; and the staff told us the owner was moping around saying things like “Don’t come to me, I’m only the maintenance man”.

The penny then dropped. The owner’s need for self-esteem and status were no longer being met and he was sabotaging the changes he had requested we make. He walked in and fired the GM soon after and grabbed his old job back. Since then, we’ve had several very stressed calls from him, but there’s not a lot we can do. He is not suitable to run his own business and not willing to step aside and let somebody else do it. Checkmate.

Businesses can easily grow beyond the owner’s ability to run them. The attributes and skills necessary to start and run a small business are vastly different to those necessary to manage a larger business. At some stage you have to accept a complete change in leadership philosophy and hand over major responsibilities to others. It’s very difficult to learn ‘company’ management by experience alone: making mistakes at the top of a sizeable pyramid can get horribly expensive.

When you think about it, the very attributes that are needed to start a business – passion, single-mindedness, obsession and strength of character – can get in the way when you are trying to let go and create a management structure below you. It’s often easier to keep diving in all the time because then you know it will get done right if you do it yourself.

In spite of the grey hairs they give me, I admire most of the people I deal with immensely. Most of them have skills and talents that I don’t possess, and are unlikely to ever possess. A few are very gifted artistically and have enriched our industry with their creativity and their innate understanding of what hospitality is all about.

Most of all, they are doing something for themselves, with a positive, can-do attitude. The business owners I deal with have brought me the best moments I’ve had, and some of the very worst.  •

Tony Eldred operates Eldred Hospitality Pty Ltd, ‘The Hospitality Management Specialists’ . Contact him on: 03 9813 3311 or