I recently spoke to a business owner who wanted to maximize short-term profits and increase long-term capacity in the business. It’s very difficult, if not impossible, to do both at the same time because they are in conflict. However, I hear the question often, and here’s why: The person isn’t thinking clearly, they are thinking like the owner/manager.

The worst job in the world, in fact, is ‘Owner/Manager’ because the two roles are always in conflict with each other.

Are you the owner, trying to achieve a return on investment from what should be a passive investment?

Or, are you the manager, trying to maximize revenues, profits and growth while consuming resources and spending money on training, advertising and other things that may not have an immediate payback-things that reduce short-term returns desired by owners?

Are you in conflict with yourself?

Just imagine what your role looks like to your employees? Are we maximizing profits today by cutting expenses because the owner is worried about a dividend or are we building for the long-term by increasing expenses and investments?

To help you sort out your roles, here are questions to think about.

Questions for owners:

1. What is my return on investment?
2. What is my return on equity?
3. How can I build equity in the company?
4. How can I protect my equity?
5. How can I position my investment for eventual sale?

Questions for managers:

1. How do we make our customers happier, improve our competitive position and grow revenues?
2. How do we beat our budget and forecast (you have one, right?)?
3. How do we allocate resources to increase our capacity and speed?
4. How do I attract and retain key talent, regardless of what the economy is doing?
5. How do I develop my people to replace me so that I can move up in the organization?

If you’re thinking about your wealth, you’re thinking like an owner. If you’re thinking about growing the company, you’re probably thinking like a manager.

Which hat are you wearing? Which hat should you be wearing?

If you’re not sure, here’s my recommendation: “You’re fired!”

Fire yourself as manager, build a management team, and give the team your performance targets that will meet your ownership returns of investment and equity. Then, get out of the managers’ way.

Copyright Phil Symchych 2011. All rights reserved.