Introduction: As the distribution business grows, the big boss may find it hard to cope alone, so they hire professional talent to assist, but this may bring greater management risks.
Distributors, out of management or development needs, hire professional senior talent from outside, appointing them as general manager assistants, operations managers, brand managers, or deputy general managers. These positions are second only to the distributor boss and come with certain authority, hence they are called 'second bosses.' Their compensation far exceeds that of ordinary employees, and some even have stock options.
Generally, distributors who can hire senior managers share two characteristics: first, their company has reached a certain scale; second, the distributor themselves has a forward-looking mindset, often recognizing their own limitations in ability and energy.
The role of the second boss can be summarized in two aspects:
1. Steward/Assistant Type: As the distribution entity expands, there are more external operations and internal management tasks, overwhelming the big boss, so a second boss is needed to share specific operational work.
2. Professional Management Type: When the distributor's business extends to new areas or requires intensive cultivation of existing markets, more professional industry experience and management skills are needed. Since the big boss lacks these, a second boss is needed for management operations.
Second bosses hold high positions and great power, and the big boss has high expectations of them. In the distributor's operating system, second bosses play a crucial role, solving many practical problems and compensating for the big boss's deficiencies in energy, professional experience, and theoretical knowledge. They contribute significantly to safe scale expansion, new field development, and assisting the big boss in research and planning for future overall development, freeing the big boss from specific operational tasks to engage in higher-level macro management.
So, why should we be wary of second bosses?
As is well known, most distributors' HR management experience is limited to managing general sales staff. Managing second bosses, who have superior theoretical and professional experience, is indeed a bottleneck in management. According to the author's special research on second bosses, over 20% have had various problems, such as:
Second bosses contact manufacturers themselves, pre-negotiate cooperation and profit-sharing, then encourage the big boss to take on distribution. They use existing distribution networks and funds, focus on resource support, and may sacrifice other product interests to ensure their designated products run smoothly, harming the distributor's direct interests.
Building their own cliques. Second bosses openly or covertly use their own people to form internal alliances, dividing and weakening the distributor's original sales force, causing internal instability and reduced combat effectiveness.
Deteriorating relations with manufacturers. Conflicts between distributors and manufacturers are inevitable due to differing interests. Big bosses usually act from the overall cooperation perspective, controlling or resolving personal biases or grudges. Some second bosses, however, act on personal emotions, sometimes exaggerating issues in front of the big boss, worsening manufacturer relations, and causing resources that could be given to be withheld by manufacturer personnel under various excuses.
Directly leaving the big boss, taking key staff to competitors or starting their own business, even using competitor resources to attack the former employer.
Inadequate Management Leads to 'Second Boss' Problems
So, what management deficiencies lead to these problems? Through continuous investigation and analysis, the root causes mainly lie in the following aspects:
1. Personal factors of the second boss. Second bosses often believe they have theoretical knowledge and practical experience, understand sales channels and market conditions, have contacted upstream manufacturers, and control downstream distribution channels. In comparison, they think the big boss's abilities are limited, merely having started early and seized opportunities. They think, 'I'm smart and capable, why work under someone else? I could use the big boss's resources to make money for myself, or simply take a few key people and start my own business.'
2. Unfulfilled promises of benefits. There is always a contradiction between bosses and employees. No matter how high the position, from the boss's perspective, employees must work hard and perform well to get raises and rewards, so base salaries are low, with emphasis on commissions. Employees, on the other hand, believe the boss should first clarify how much they will pay, then they will work hard; bonuses are uncertain, but base salary is tangible.
In fact, this 'chicken-and-egg' conflict exists in most enterprises. Especially for senior employees like second bosses, during the initial honeymoon period, most big bosses have high expectations and make promises to motivate them, like 'If you do well, by year-end, you'll get...'
But often, when the time comes, the special compensation promised to the second boss is not fulfilled. Many big bosses think, 'Isn't it because of my years of foundation and huge capital injection? All my comrades, friends, and brothers are here because of me. You (second boss) just gave some ideas and helped handle some affairs, and you want to take such a big chunk? Besides, if I give you so much, how do I balance other employees?' Additionally, even if the big boss is willing to pay, the boss's wife often feels reluctant, and with constant nagging, the big boss may give in. Also, there are the boss's siblings, parents, etc. Breaking promises cannot be entirely blamed on the second boss for leaving in anger!
3. Personality differences and management ability of the big boss. Many distributors are self-made, with their own success experiences, and tend to be self-centered with varying personalities. If a second boss points out shortcomings or mistakes, the big boss may be displeased. Moreover, many bosses are unwilling to change their behavior for a subordinate and dislike others negating their success. Over time, disagreements accumulate and may erupt over a small issue.
Managing senior employees like second bosses requires considerable skill; neither laissez-faire nor micromanagement works, and finding the right balance is crucial. However, most distributors' HR experience is based on managing general sales staff, so managing senior employees is challenging for many.
4. Complex family business environment. A significant proportion of distributors run family businesses. In the eyes of the big boss's family, no matter how capable the second boss (even as deputy general manager) is, they are still an outsider and can be ordered around, and must be guarded against. The big boss's decisions may be blocked or altered by family members. The second boss then faces an awkward situation: everyone is a boss, everyone's orders must be obeyed, and no one can be offended, trapped in the family management quagmire. 'Enough! I can't afford to offend, but I can avoid. I'm leaving!'
Sound Mindset and Scientific Management
Based on research on second boss operations, the author proposes the following solutions:
The big boss must first confirm whether their mindset can accommodate the second boss's presence, whether it will cause personal grudges, and consider family issues. If necessary, persuade family members to leave, clean up the internal environment, and create a good working environment for second bosses. Additionally, thorough pre-hire investigation is crucial, including the candidate's career history, evaluations from superiors and subordinates, and industry reputation.
Upstream manufacturers and downstream distribution channels are the foundation of the distributor's business. No matter how busy, the big boss must regularly visit customers; business is largely about relationships. This is the fundamental line and must be firmly in the big boss's hands.
Do not easily accept candidates recommended by the second boss; later recruitment should be centralized in the big boss's hands.
Some precautions are necessary, especially since second bosses are involved in core secrets. Therefore, labor contracts (including compensation) and confidentiality agreements should be signed, preferably notarized. Although this is to guard against gentlemen, not villains, it sets a psychological warning line for second bosses. Written confirmation of compensation also reassures them.
In terms of specific job arrangements and authority, clearly define for both the second boss and all employees what is and isn't their responsibility, to avoid employees habitually going to the big boss for everything, causing misunderstandings for the second boss.
Leverage strengths and avoid weaknesses, fully utilize the second boss's advantages, and consider their development and progress, reserving enough growth space to prevent feelings of being misplaced or underutilized.
Generally, after two years of stable work and bringing economic benefits to the big boss, consider giving the second boss shares or allowing them to buy in, to prevent psychological imbalance and thoughts of seeking benefits elsewhere. Note: if the second boss has run the market for two years with good results, they are capable of doing so.
Manage personal business reputation to cut off the second boss's escape route. The author analyzed data on second bosses who started their own businesses or joined new employers and found that 85% stayed in the same city, meaning they remained in the same circle. In the business community, personal reputation is increasingly important. Many shrewd big bosses deliberately or inadvertently promote how much they value and trust their second bosses in the local business circle, which to some extent cuts off the second boss's escape route. If the second boss has second thoughts, they will face a reputation for betrayal and ingratitude, and who would want to do business with them?
Author: Pan Wenfu Born into a private business owner family, managed a family distribution company for many years, and concurrently served as business manager and trainer in several manufacturing companies. Research focuses on internal management of small and medium-sized private enterprises, mainly covering HR management, cost control, management backend setup, and military veterans entering private enterprises. Continuously breaks down over 400 topics related to internal management of private enterprises, maintaining material collection and solution updates.