Biz Tips: Delegate or stagnate
By John A. Haas
Over the years a number of client business owner-managers have said or strongly inferred, "I hate my job!" What's going on?Clearly, all these entrepreneurs have led their organizations to a certain size and financial success. They took the risks, made the tough decisions, put in the "sweat equity," and sacrificed quality time with family and friends, all in order to build their businesses. They have hired talented people and created an organization structure and operating procedures to manage and grow their company. They lead by example - personifying high standards of customer service, quality, a strong work ethic, absolute integrity, etc. They serve as chief cheerleader, business developer, marketer, planner, fund-raiser and decision maker.
While they know these are the roles CEOs need to play, they feel that they are "forced" into playing all these roles, even though they recognize their shortcomings and/or lack of interest. Many owner-managers recognize that by being so integrally involved in all these aspects of running their business, they are "getting in their own way" and limiting their growth potential. So why haven't they delegated?
You Set the Tone
Consider the following two scenarios.
• Some clients tell me their managers don't seem to care enough about the company or about achieving results; they don't feel accountable.
• Others note that, without close monitoring, key managers will go off to pursue what they see as promising and interesting directions. While these may appear logical, innovative and prudent from their own functional perspective, they may have a dysfunctional impact on other parts of the business, and derail overall focus on achieving established business goals.
These examples reflect your company's operating culture, which you, the owner-manager establish (whether consciously or by default). People behave based on what they perceive is expected and desired. If their behavior differs from your expectations, you have not effectively communicated those expectations. You would do well to reflect on how your behavior and management style may encourage these dysfunctional management efforts.
In the first scenario (managers aren't accountable) the CEO's style may suggest that he/she will make virtually all decisions, thereby encouraging managers to "delegate" decisions upward rather than risk being reprimanded or undermined. In the case of the far-flung efforts, I wonder whether the CEO has articulated the vision and goals, developed clear business goals and, very importantly, gotten management "buy-in."
Aligning Interests and Effort
Here are some ideas to help owner-managers delegate with confidence:
• Involve key staff in identifying compelling long- and short-term business goals, including financial ones. Seek input from everyone, but make sure all are on board with the final plan.
• Ask each manager to propose specific performance targets in his/her responsibility area for the coming time period that are realistic and tie to overall business goals.
• Discuss and finalize individual and team goals, to assure there are no conflicts. It's important that everyone can simultaneously achieve goals, leading to achievement of overall business goals.
• Ask each manager to develop and present a detailed project plan for achieving each performance goal, including steps, timetable, resource requirements and milestone events.
• Perhaps most importantly, tie specific monetary rewards to goal achievement through a performance-based incentive compensation plan.
The discipline required to develop performance-based incentives leads to clearly defined goals and integrated individual and team efforts, and make it "matter" whether goals are accomplished. Having incentives in place allow the owner-manager to step back and focus on what they're best at, most interested in and where they're most needed, with confidence that key staff are pursuing the right goals.
John Haas is the founder of Management Strategies Group, a Newton-based consulting organization which helps owner-managed businesses and non-profit organizations better focus effort toward achieving their vision and potential. He can be reached at: 617-964-1020, jhaas@managementstrategiesgroup.com or www.managementstrategiesgroup.com.
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