CEO Notes: Business Entrepreneur
As a budding entrepreneur, knowing when to delegate both responsibility and authority is hard for the owner of a growing business. The question that looms in your mind is: what if they (an employee) mess up?
Just the other day a business owner expressed their fear that by giving an employee too much decision making authority, they might make a decision that would cost the company money or lose a client. This was a business owner who was caught in that never-never land of control vs. autonomy. Where do you draw the line?
I began my career as a typical entrepreneur control freak. And it wasn’t until late in my career that I recognized the difference between being a control freak and knowing how to delegate with confidence. The confidence to delegate and release authority came as I began to understand what I needed to focus on as a leader of a growing organization. Knowing what information to ask for, knowing what information to track, knowing what key indicators were critical for success. Leading is all about making sure that critical tasks get done right and that as a leader, you know what needs to get done and when. Every success magazine will tell you the same. I’m not inventing the wheel here. I’m just telling you how it works.
When you have 20 to 34 employees, you are in Stage 3, the Delegation Stage of business growth and entrepreneurship. (The 7 Stages of Growth identifies different stages of growth based on the number of employees) With 20 to 34 employees the company is no longer CEO-focused. It’s the first time in the company’s history when it can’t be all about you, the CEO. The company has to start developing its own identity. This stage of growth requires a lot out of their leader. This is when the power of the leading entrepreneur must evolve in order to take the necessary steps to move the organization forward. Now the company is more enterprise-focused, demanding that the leader begin to develop key employees into management roles. Without this recognition, a company can grow, but without releasing control, turnover will become your biggest inhibitor to sustainable profitability.
Stage 3 Leadership Rules of the Road 20 – 34 employees:
Rule #1: Delegate responsibility and authority to capable supervisors and meet with them regularly.
Have you appointed a supervisory team and do you meet with them weekly? At these meetings, do you delegate, track and review specific authority and responsibility to each supervisor? Have you secured, expanded and developed a company-wide flash sheet key indicator system? Your managing and supervisory team members want to know that they hold a key important role within the company. By meeting with them regularly it keeps them accountable and motivated to be the best they can be, especially when the meeting with the CEO is on the schedule.
Rule #2: Create a financial reporting and projection system.
Have you organized your profit and loss statement based on revenue groups? Have you developed a budget cash flow system by revenue groups? Have you created a hierarchy of how financial data is shared throughout your company? If not, you should. And you should track and be well aware of financial trends within your business.
Rule #3: Instill a team-based mindset throughout the company.
Have you created a team credo? Have you outlined clear roles and responsibilities for all team members? Do you reward and acknowledge team performance at company meetings? When you do this, it creates a team synergy; a “winning” mentality that motivates team members to be productive and accountable to the other team members.
Rule #4: Overhaul the business model.
Recently, have you challenged all assumptions regarding vision, mission, goals, objectives and strategies of the company? Do you challenge all assumptions about the customer, the competition, the market and your company’s offerings? Have you reorganized the company’s resources to meet the new business model conclusions? Always be willing to make improvements. Notice I said improvements, not changes. Recognize what can be done better, and do it better.
Rule #5: Without fail, clarify and strengthen any and all communication with your employees.
Do you clearly communicate the goals and direction of the company to all employees? Have you established and demonstrated the company’s core guiding values, preferably with input from your employees? Do you reinforce and support effective one-on-one supervisor or employee monthly meetings? You should. Communication is the single most important factor in any successful relationship. Any relationship. Especially business.
By now, you have either figured out that your employees are your business or you are still holding onto the mistaken opinion that you are the only one who can run your business.
My suggestion is to get clear on what needs to be done and start asking for help from your very capable staff. And then trust them to do it well. Just ask any business magazine. One of the many keys to success is building a great team. And the rest will be taken care of.