In small to medium-sized companies (SMEs), where so many decisions can make a substantial impact, the term “2IC” might sound like military jargon. But don’t be fooled—it can be a game-changer for business owners. Short for “Second in Charge,” a 2IC is essentially the owner’s trusted deputy, the person who steps up when the owner and leader is not available, as well as tasked with managing certain aspects of the company, e.g., the owner needs a break, handles day-to-day operations, and drives strategic initiatives. If you’re an SME owner wearing many hats, (sound familiar), understanding the 2IC role could be the key to growing and better managing your business without burning out.
In this article, we will delve into what a 2IC really does in an SME company, why it is important for business owners to really consider the importance of having one in place, and the value this role brings that even the most visionary entrepreneur might lack. Regardless of where you are in your journey, it is a worthwhile idea to examine how a 2IC can transform your operations.
What exactly is a 2IC
At its core, a 2IC is the owner’s right-hand person, often holding a title such as Chief Operating Officer (COO) or General Manager, depending on the business’s structure. In larger corporations, this role might be more formalised, but in SMEs—typically businesses with 5 to 200 employees and revenues under $50 million—the 2IC wears multiple hats, adapting to the company’s evolving needs.
The responsibilities of a 2IC can vary widely based on the industry, including which stage the business is at, but they generally fall into three distinct categories: operational oversight, strategic support, and team leadership.
First, on the operational side, the 2IC manages the ‘nuts and bolts’ that keep the business running smoothly. This includes overseeing daily workflows, supply chains, customer service, and financial tracking. For instance, in a boutique marketing agency, the 2IC might coordinate client projects, ensure deadlines are met, and handle vendor negotiations – freeing up the owner.
Strategically, the 2IC acts as a sounding board for the owner. They contribute to planning sessions, analyse market trends, and help implement new initiatives like launching a product line or entering a new market. Unlike entry-level managers, a 2IC has the authority to make decisions in the owner’s absence, ensuring continuity even during holidays or in the case of emergencies.
Finally, in team leadership, the 2IC bridges the gap between the owner and employees. They mentor staff, resolve conflicts, and foster the company’s culture. In an SME where resources are limited, this role often involves hands-on training and performance reviews, helping to build the team as required.
What really sets a 2IC apart from other managers is their proximity to the top, i.e., They report directly to the owner and often have a broad view of the entire business, not just one section or department. In essence, they are expected to think and act in a similar manner to the owner.
Why Every SME Owner Needs a 2IC
As much fun and exhilaration is involved in running a SME, it can also be an exhausting exercise. Owners start a business because they have a vision of where they want to take the company. This required putting a lot of effort into all the various aspects of the business, particularly when the owner has limited understanding of the issues. However, as the company grows, so do the aforementioned demands. This is where a 2IC becomes not just helpful, but essential.
One primary reason is risk mitigation. There is a likelihood that the owner falls ill, takes maternity leave, or simply needs time off. Without a 2IC, operations can potentially grind to a halt, leading to lost revenue, unhappy clients, and stressed employees. (A business study highlights that SMEs without succession planning are 50% more likely to fail during leadership transitions.) A 2IC provides that safety net, ensuring the business does not revolve solely around one person.
Beyond continuity, a 2IC enables scalability. Owners often are very good at seeing the big picture but have limited experience or know-how or time in the execution. Delegating to a reliable and trusted 2IC allows the owner to pursue opportunities like networking, fundraising, or innovation—activities that drive growth. For example, in a family-owned retail chain, the owner might focus on expanding to e-commerce while the 2IC optimizes in-store efficiency.
Moreover, a 2IC brings objectivity and accountability. Entrepreneurs can get tunnel-visioned, fixated on their original ideas, or being caught up in something new. A good 2IC challenges assumptions respectfully, offering fresh perspectives that prevent costly mistakes. They also hold the owner accountable to goals, turning lofty ambitions into actionable plans and holding them to the company strategy.
When it comes to striking a work-life balance, having a 2IC is hugely beneficial. SME owners often work incredibly long hours, leading to loss of motivation and burnout. Delegating authority reduces this load, allowing owners some downtime and getting refocused and recharged. It is no wonder that businesses with strong deputy roles report higher employee satisfaction and lower turnover rates—everyone benefits from a clear headed and focused leader.
Finally, from a financial standpoint, investing in a 2IC also pays off. While the salary might seem high (typically 70-90% of the owner’s), the ROI comes through increased efficiency and revenue. A Harvard Business Review analysis notes that effective delegation in SMEs can boost productivity by up to 25%.
A 2IC Brings Value That Owners Often Lack
Owners are the ‘heart’ of an SME—their vision, risk-taking, and drive got the business off the ground. That is not always sufficient for the next phase of business growth. and that is where a 2IC shines; they fill the gaps with complementary skills.
Firstly, operational expertise. Owners might excel in sales or product development but struggle with processes like inventory management or HR compliance. A 2IC often brings specialised knowledge, perhaps from prior roles in larger firms, to streamline these areas. For instance, they might implement software tools for automation, reducing errors and saving time, something an owner might overlook while pursuing their own work.
Secondly, emotional intelligence and people management. Entrepreneurs may, as an example, be intense, driven by passion that sometimes alienates staff or stakeholders. The 2IC provides a buffer, handling interpersonal dynamics with empathy. They might mediate disputes or motivate teams during tough times, fostering loyalty that owners, focused on the bottom line, might not prioritise.
Thirdly, data-driven decision-making. While owners often rely on intuition, a strong 2IC uses analytics to back up choices. They track KPIs, forecast trends, and pivot quickly, adding a layer of rigor. In a tech startup, for example, the 2IC could analyse user data to refine features, complementing the owner’s creative instincts.
Fourth, crisis management. Owners might panic or overreact in emergencies, but a seasoned 2IC tends to stay calm, drawing on experience to navigate challenges like supply disruptions or market shifts. This steadiness prevents rash decisions that could harm the business.
Lastly, succession potential. A 2IC is often a future leader, bringing ambition and fresh ideas that keep the business innovative. They might spot untapped markets or efficiencies the owner, entrenched in routines, misses. This value extends to exit strategies—if selling the business, a capable 2IC makes it more attractive, and less risky, to buyers.
When it comes to selecting a 2IC, not every hire will be perfect. The key is finding someone aligned with your, and your company, values. This can be achieved by tapping into personal and professional networks, or executive search firms. Start with clear expectations and build trust gradually.
Wrap Up : Empower Your Business with a 2IC
In the dynamic and everchanging landscape of SMEs, a 2IC is, in many instances, no longer a luxury – it is a strategic necessity. By defining the role clearly, recognising its importance for continuity and growth, and leveraging the unique value it adds, owners can put their effort where it belongs, namely, in growing their business by focusing on the strategic strategies so they can achieve their vision. If, as an owner and leader, you are feeling overwhelmed, consider this option: the best leaders know when to share the load. Investing in a 2IC today could be the decision that secures your tomorrow.
