Managers and Leaders…

By Tamera Kovacs… The retail propane industry was largely built by entrepreneurs who believed they could create something of value by doing things just a little differently and better than everyone else. Most had a vision for the business they wanted to create. It may have been a scratch start-up or it may have been added on to an existing business. It was one person’s ability to see the opportunity coupled with the leadership traits to make that vision a reality.

These entrepreneurs, or business owners, have the ability to paint the vision of the future of their company for everyone to see. The best of them also realize they can’t do it alone. Business owners, like all individuals, have their strengths and weaknesses and they realize they need to find leaders and managers to help them. They realize people are the critical element to success.

The heart and soul of a company is directly tied to its people. For a retail propane operation, the staff, management, and leadership are critical to the success of the company as the product (propane) is the same for all propane companies. Hiring well increases a leader’s and manager’s ability to leverage their time and responsibilities by delegating. It is the way the staff is empowered to handle customers’ concerns that differentiates one company from another.

It is often believed managers and leaders are interchangeable. While some individuals have the ability to do both, most people tend to gravitate to one set of talents or the other. Leaders tend to be focused on the company’s vision. They assume the responsibility to challenge and inspire the staff and communicate the status and progress of the company. Leaders think in terms of one to five years out whereas managers have a shorter time horizon.

It is the manager’s responsibility to develop and execute the strategies and tactics needed to achieve the vision. They are charged with the day-to-day implementation of processes and procedures as well as developing and motivating the employees. Managers also have the delicate task of balancing business operations, taking care of the customer, and tracking numbers. Everyone in the organization needs to have good understanding of their numbers and their impact on the overall performance of the business. What is the profitability of your business today compared to the past three years and your projections? It’s surprising how many retail propane managers or owners when asked about their gross margin state the margins they receive on their residential business, not the total weighted propane gross margin. If business owners or managers make decisions based solely on their residential margins (unless they are a 100% residential business), they may be hindering their total profitability. How are capital investments actually impacting the operations and financial performance of the business? How much will it cost to deliver to that new customer? Are you charging enough? How are customers responding to the different marketing campaigns implemented?

Companies over time change and evolve and their leadership and managerial needs also shift. In small companies one individual may be able to perform both leader and manager roles. However, as the company grows it becomes increasingly difficult to be proficient at both. Owners and leaders are constantly in search of the magic formula of balancing leadership and management for ultimate success. Many owners of propane businesses have made the comment, “I spend all my time addressing the daily concerns and issues of the business and I have no time left at the end of the day to focus on the direction and vision of the company.”

Matching a manager’s management style and strengths to the company’s goals, culture, and needs is critical. A manager that is successful in one organization may not be the right fit for your organization. It is commonly said, people don’t leave companies; they leave managers. Conversely, excellent managers tend to have good employees follow them. The manager that meets your company’s needs today may not be the right person in five years. It’s a good business practice as part of your annual review process to assess your management staff. When evaluating, treat the management position as a new position. Take the time to define the position and create a profile. Develop a list of duties and responsibilities and establish expectations and compensation for the ideal candidate. You should have a good understanding of the manager’s values and how they will implement the strategies and tactics. Are they aligned with yours? After these steps are completed, assess your current manager to determine areas for additional development, training, or education.

When it comes to leading and managing a company, there is no right way or wrong way. Each and every company, owner, entrepreneur, leader, manager, and employee will have their own views. The magic is finding the right blend of complementing the talents necessary to achieve the desired goals.

Tamera Kovacs is a financial and business consultant for Propane Resources, a company providing financial and operational consulting, merger and acquisition services, supply, transportation, and marketing communications services for the propane industry. She can be reached at (913) 262-0196.