| Small Business Owners or Corporate CEOs: Who Makes Better Decisions?
A small business owner who has survived for ten years has proven his ability to make good decisions. In spades. Only thirty-six percent survive that long. On the other hand, unless they run their business like a small one, large company CEOs can hide bad decisions in their vast bureaucracy in many, many ways. And they will always have sycophants to back them up. And if they are required to leave, they usually have the connections and wealth to obtain a similar position with good income elsewhere.
Let us compare further.
Small Business Owners (SBOs) support each of their employees and focus each day on pleasing a wide variety of customers so they can survive. CEOs focus on pleasing those within their bureaucracy, enabling them to keep their jobs.
SBOs always place their customers first, as their existence depends on it. CEOs, as beginning employees, have a decision to make: Should they focus on producing a better product for their customers, or should they spend their time working on relationships as sycophants? Those who do the latter are more likely to become CEOs than those that do the former.
SBOs obtain feedback from their customers almost daily on how to improve their products or service. CEOs who are usually far removed from customers allow HR departments to make decisions about customers for them. The earlier “woke” decision made by the now-fired Disney CEO for poor performance reveals this clearly.
SBOs handle money better because it is their own money. CEOs spend corporate funds often more to enhance their career than to take care of their employer’s customers because, like those in Congress, it is not their money.
SBOs are tougher as they have fewer resources and less support. CEOs show their weakness by how quickly they fold to the “woke” agenda. They do this despite the financial damage to their shareholders and customers, even though serving them is their primary responsibility.
SBOs do not accept bureaucracy in anything they do, as it prevents them from efficiently taking care of their customers. CEOs always accept bureaucracy as a given and often consider it a plus, as the more people there are in their organization, the more powerful they appear.
SBOs do not tolerate sycophants as they know that someone trying to build their ego will, if successful, only damage their relationship with customers. No one wants to buy from someone with a stuffed shirt. CEOs usually have large egos and desire power more than effectiveness, so they easily succumb to sycophants.
SBOs are better risk takers as their existence is often on the line in a high-wire act every day. Those who survive for ten years are proven good at making decisions to minimize risk. CEO’s on their way to the top are risk averse as they are usually penalized rather than rewarded for taking risks.
SBOs have broader skills. They have to. Technical skills, people skills, and financial skills are a must for them. Often the best small businesses are husband and wife teams who combine to have all of these skills. CEOs often only have political skills confined to their business or industry. They rarely run for public office, which would require that they have broad skills and be accountable to customer voters.
SBOs have no severance packages and almost always must use their savings at some point just to survive. CEOs often have a captive Board of Directors with whom they negotiate severance packages in the millions they receive even if they fail.
Do small business owners make better decisions than corporate CEOs? They do for the numerous reasons shown above. And when small business owners run for public office, their minds are already wired to take care of voters in the same way they have taken care of customers all their lives.
Vern Wuensche’s opinion pieces have appeared in USA Today and other newspapers. He is a small town Texas farm boy with an MBA and CPA who founded and continuously ran Houston’s oldest residential construction company for forty-three years. He is a lifelong active Republican, a Christian, a veteran, and an early marathoner who ran for President in 2008 and 2012.
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