Letting go as a business leader
Most entrepreneurs start a business because they are technically competent at something, they rarely start a business because they are technically competent at business
- This leads the owner to assume that the success or failure of the business is down to their own ability, i.e., no one can do this as good as me
- The owner becomes the ‘go to’ person for everything, customers, suppliers and employee decision making
- This leads the owner to believe that if they are not at the centre of everything the business will fail
- This is what is termed as ‘the owners trap’ the scalability of the business is limited to the owner’s capacity and capability and this tends to peak when the owner is working 7 days a week
- Many SME owners spend their life in this situation only to realise that when they want to exit and sell the business it will only be worth at best, one year’s cash flow because it is not scalable and is solely dependent on the capacity of the owner
Breaking out of the cycle
To break out of this cycle the owner needs to first understand clearly what it is that they personally want to achieve. It might be to retire at 50, leave a legacy, hand over the business to family. But it is rarely to work 7 days a week and not see their family. Once an owner is clear about their personal aspirations it is then just a case of developing a business plan that delivers these aspirations.
Typically when the entrepreneur started her/his business they had a vision of why they were doing it and what they wanted to achieve, most owners lose sight of this over time, they need to get back in touch with the reason why. Once the owner has a clear understanding of what they want to achieve in their personal life it is then a matter of separating the personal life from the business and developing a vision for the business to deliver personal expectations.
Put your plan into action
Relinquishing control now becomes part of the business plan and it simply becomes a means to implement the plan through the development of people. This is done by carrying out the following steps;
- Share the business vision with the staff and seek their input as to how they can help the business, seek ownership by the staff of the vision
- Start with a blank sheet of paper and decide what roles and responsibilities (job positions) are required to achieve the vision and plan (resist the temptation to create positions around current staff capabilities)
- Create job descriptions, roles and responsibilities for each job position with responsibilities and accountabilities linked to achieving the business vision
- Interview each member of staff for the roles that may best suit their capability, expect around 20% turnover so be in hiring mode looking for new talent
- Look to retain talent, retrain others into taking more responsibility, release those that do not have the skills necessary, recruit to fill the gaps
- Put performance measures in place so that you can frequently check that the performance of staff is in line with the requirements of the job descriptions, praise often and reward good performance
- Relinquish responsibility during the process by setting short to medium term targets designed to move accountability to key members of staff pushing accountability to the lowest level of capability
- Expect staff to make mistakes and support them to help get it right
- Seek one to one coaching to help make the transition
Relinquishing responsibility is a tough challenge for owners, it is easy to understand the hard issues of creating a plan and to describe the process but in my experience, it is more about the soft issues of learning how to motivate people that is the key to putting plans into practice. The owners personal ability to deal with the fear of failure and face up to the demons that created the need for control in the first place will play a major part, realising that personal aspirations will never be achieved without the help of a dedicated and responsible work force.
If you would like more information on how you could scale your business and relinquish control, get in touch and I will be more than happy to provide you with some practical advice. Alternatively get in touch with your local Business Doctor.
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