One of the biggest issues for a high-growth business owner is learning how to relinquish day-to-day tasks, so that they can take a more managerial and leadership role.
Many businesses live right on the edge of capability and disruption from the slightest unforeseen issues can cause the leadership to fall back into the business detail.
There are a number of reasons why this happens, the two most common that I come across are:
- A failure by the leadership team to understand what their role is. The result being they get involved in everything
- Not understanding the difference between a cost and an investment. High-growth companies are profit conscious, but sustainable growth requires proper investment
There are, however, some simple techniques leaders can use to help them avoid these growth limiting issues.
1. Fit for purpose, not perfect
When we start a business we do everything, from washing up to board meetings. As the business grows then we learn that we can’t do everything and so we have to give tasks to other people; we delegate.
This in itself can cause a problem. Why? Because as business owners we’re typically overqualified to do the jobs we’re delegating, which often leads us to have an unrealistic expectation on how certain activities should be performed.
Let me give you an example. A director for a multimillion-pound removal business insisted that he should produce the route planning for his drivers. One day I asked him why he didn’t delegate the task as it was a job that in most businesses would be done by a lower level person. In any case, most of the work was shouldered by the route planning software. His reason was that the people he delegated this job to didn’t do it as well as him. So he saddled himself with a completely unnecessary task for two hours every day.
I went on to ask how much he would expect to pay someone to do the job. ”No more than £25,000,” he said. “And, you pay yourself?” I asked. His reply was “over £100,000 Laurence, and you know that".
“Yes I do,” I said. “So, why are you paying yourself £100,000 to do a job that you’d only pay £25,000 for someone else to do.”
At this point, the penny dropped and he got one of his managers to take over that responsibility. Many times the people who take over a job from you won’t do it as well as you, but they will do it well enough for you not to have to take it back.
2. Question what you are doing
Michael Gerber talks about “getting out of the box”. What he means is, you can’t operate at multiple levels in an organisation at the same time and be effective. For example, you shouldn’t be the sales person, sales manager and sales director. You need to divest yourself of the sales person role before you can properly accept the sales manager role.
My route for achieving this often complicated goal is to ask yourself: “Would I give this task I’m doing to a director of this company?”
From the answers build two lists one under ‘Yes’ and the other under ‘No’. Next, take the ‘No’ list and start to group tasks into common areas (it’s much easier to do this from a list rather than off the cuff during a busy working day).
In a growing company these tasks won’t add up to a whole person’s job, nevertheless, you may well be able to give these connected tasks to others in your business freeing up valuable time for you to spend on more important activities. Rinse and repeat on a regular basis as your business continues to grow.
3. Give yourself a job description
Write down what your role entails and stick to it. This will prevent you from accumulating lots of other tasks which lower your productivity and eat away at your valuable time.
Review it every six months or so and make any changes necessary, trying always to focus more on strategic tasks.
4. See people as an investment!
Many high-growth businesses are under resourced. This is often because owners see new hires as a cost. Much of this is because we don’t look at people as an investment in the same way we would machinery or another physical asset.
The issue here is to understand that they are an investment and they can deliver value considerably greater than their salaries. Their greatest benefit is that they give those in the rest of the business time, a commodity that is in desperately short supply in most high-growth businesses.
Here’s two examples that illustrate what I mean. A high-growth construction business had been plagued by slow payments, but the owner refused to spend £25,000 on a credit control person because he didn’t want to add to his overheads. When he finally relented, the credit controller reduced outstanding debts by almost £400,000 in their first four weeks, eliminating the company’s cash flow issues.
The sole director of a high-growth services business was being overwhelmed with demands on his time resulting in missed meetings and half completed jobs. After a lot of pressing, he reluctantly agreed to hire a personal assistant. His assistant’s organisational skills transformed his ability to perform by managing demands on his time and controlling his diary. He no longer misses meetings or deadlines.
So, don’t be too afraid to try. Sometimes even the best thought out investments fail, but that doesn’t mean you should stop investing. I do realise the difficulty in saying to someone that they haven’t worked out for you, but hiring people is never perfect and the risk of failure isn’t a good enough reason not to hire at all.
About Laurence Ainsworth
Laurence is an authority on High Growth. Since 2011, he has been focussing on high growth businesses and has helped a number of businesses sustain and manage this trajectory.
Prior to leaving corporate life he worked for a business that grew at roughly 30% pa every year for nearly a decade. This provided him with invaluable experience on both the pressures and solutions to managing high growth. Since 2002, Laurence has been providing business advice to the SME space.
He recently published a book Staying Ahead of the Hammer offering his unique view on high growth.