Jacob M. Engel
Author and CEO of The Prosperous Leader. I help CEOs and their organizations prosper.
My mentor, Roy Cammarano, wrote a very insightful book called Entrepreneurial Transitions: From Entrepreneurial Genius to Visionary Leader. When I first read his book, it gave me such clarity about why most entrepreneurs stay stuck and many fail — it’s because they don’t understand how to become a visionary leader.
What he explains is that most, if not all, entrepreneurs start with a great business idea (e.g., a better mousetrap) or a great business investment. But to succeed, they must wear multiple hats at once. They are the genius behind the business, and they need to be geniuses at everything the business does. At any given time, they are the buyer, seller, bookkeeper, IT person, etc., and most importantly, they must show great results with their product or service.
As the company grows, they often realize that they can’t do everything alone, so they hire their first employee of many. Often, it doesn’t work out — mostly because they may not really know what they want from the new hire, so they overwhelm them without providing the proper training and without identifying what skillsets the person needs or even whether they are able and willing to do the job.
Usually, what happens next is that once there are multiple employees, everyone is asking the boss what needs to be done and the boss becomes a benevolent dictator. Benevolent as in well-meaning, yet a dictator nonetheless.
The boss is then inundated with employees asking for direction, instructions and advice. And who else but the boss is able to give such direction, instruction and advice or make decisions?
This is the critical point, or as my mentor calls it, the danger zone, depending on whether the entrepreneur sets the business up correctly or not.
It’s crucial for entrepreneurs to learn the skill of delegation. It’s not abdication, as my mentor always says. Here’s why this skill is so critical:
Delegating is empowerment while holding people accountable for the results. Abdicating is empowerment without any accountability for clearly defined outcomes.
When you abdicate your responsibilities, it often seems great in the beginning, but eventually, you may realize that things aren’t going as well as you thought, and then you might make the mistake of jumping back in.
An Example Of Successful Delegation
I have a client we’ll call Mark who’s the CEO of a fast-growing family business that sells both online and directly to large customers. The product line is very competitive, and the profit margin is very thin. However, Mark has been able to negotiate an excellent rebate with most of his suppliers, and the more business he does with them, the higher the rebate he gets. This is a powerful incentive for the salespeople, but it’s very confidential information, so he shares it only as needed.
Well, his salespeople figured it out and were continuously badgering him to reduce prices when there was serious competition. Mark was spending hours each day meeting with his salespeople and deciding pricing. In addition, when he knew that he was close to getting a higher rebate, he encouraged his salespeople to sell even more.
Mark, however, was complaining to me that he couldn’t get anything done as he was continuously being interrupted. When I asked him what he believes is the most important part of his job as CEO, he said it was everything he wasn’t doing, or wasn’t doing enough of.
He asked me for advice, and when I asked him whether there were a few selected people in his company that could be trusted with the rebate information, he said yes. We then created a password-protected document that had all the rebate information and was updated as things changed.
Mark also delegated the responsibility of communicating and deciding pricing to his key trusted managers, and they all agreed to be accountable for the results, meaning not selling below the agreed-upon margin. He also told the salespeople who they could ask about the rebate information (not him), and we all agreed that periodically, Mark would check the sales orders to see that they’re accurate. It was a real win-win.
The Importance Of Accountability And Transparency
As the example above shows, successful delegation has two key components: transparency and accountability. For leaders, transparency means sharing important information with managers and employees so they can do their jobs without continuously coming back to you with questions or for permission. Managers and employees also need to be transparent about their priorities so that they’re in sync with the company’s overall goals. This allows them to feel that they’re part of the overall mission and that they’re contributing to the goals of the organization.
Accountability goes hand in hand with transparency, and it’s just as important for the leadership to be accountable as it is for managers and employees. If leaders don’t hold themselves accountable to what they promised, why would others be different?
Consider having a weekly management meeting where every attendee, including leaders, shares what five priorities they’re working on that maybe other members of the team can assist with. This sharing gives everyone the chance to ask for help and creates transparency and accountability.
Becoming A Visionary Leader
Roy says, that the ultimate goal of delegating is to free you up to become a visionary leader.
Michael Gerber, author of The E-Myth series (and who helped edit my own book), says, you need to work on your business more than in your business.
Here’s my advice on how to do that:
• Spend your time defining your vision, mission and goals.
• Share them with your key managers and employees.
• Get their buy-in on why it’s important to do what the company is doing.
Remember to inspect what you expect as what you inspect gets respect. If you’re just delegating tasks but not inspecting the results, you’re abdicating your responsibility as a leader. People will pay attention to what you pay attention to.
Think of yourself as the chief coach officer: Your job is to inspire, motivate and build the best team with the best players, but refrain from jumping into the game unless you’re really needed.