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Delegating the Right Way: Part 1 of 2

Cliff Ennico on

One of the hardest things company founders, entrepreneurs and self-employed professionals can do is get out of their own way and allow their businesses to grow without them.

And there is one -- and only one -- way to do that: delegating to others.

No individual can build a billion-dollar business by himself. Doing that requires building systems to run the business and a team to manage the systems. Building a team requires the owners to surrender control and do only those things no one else can do.

So why do so many successful business owners have trouble delegating?

There are many reasons, such as the following:

--They are control freaks who fear others won't do as good a job as they do.

--They truly love doing the task at hand and don't want to give that up (the craftsman syndrome).

--They are happy being a one-person band and don't want to grow their businesses beyond what one person can do.

--They are concerned about additional costs and time getting jobs done.

--They are afraid the people they delegate to will steal customers, or trade secrets or other key assets of the business.

--They consider themselves colleagues, not managers or bosses, despite hierarchical management structures.

Let's be frank: Some business owners are completely happy staying small and in control by doing things themselves. And that's fine ... until the time comes to sell the business and retire. Few people will want to buy a business if 50 percent or more of the customers are likely to disappear in the first few months after closing, and that happens when your customers equate you with the business.

By spending all your time working in your business, even if you do a fantastic job, you will find yourself with little or no time to work on your business (to understand this distinction, read "The E-Myth Revisited" by Michael Gerber).

Here are some of the things you could spend more time on if you weren't so busy putting out fires:

--Marketing and promotional strategies to grow the business.

--Developing new products and services.

--Identifying and cultivating new key customers.

--SWOT analysis (assessing your business' strengths, weaknesses, opportunities and threats).

--Essential activities (more on these below).

--Possibly achieving a better work-life balance.

Some business owners, when hiring their first employee or consultant, want to delegate only those aspects of the business that aren't fun -- the boring, difficult and/or painful stuff. That is not the right way to delegate. Here is the right way:

Before you can delegate to anyone, you have to narrow down the essential activities of your business. Every business has a few -- no more than three to five -- that must be performed perfectly, or extremely well, for the business to function.

They are usually the things that give your business an edge over the competition, that are key to driving revenue and/or help you maintain your relationship with key customers and suppliers.

Sometimes they aren't obvious. One of the essential activities of my law practice is getting invoices out to my clients once a month. This has nothing to do with practicing law, of course, but the simple truth is that if I don't get my invoices out each month, my clients delay paying me and I start having accounts-receivable issues.

If your competitive advantage is turning work around within 24 hours, that's an essential activity. If your business depends on one or two key customers, maintaining those relationships at all costs is an essential activity. You get the idea.

Not everything, however, is an essential activity. I have seen countless businesses fail because the owners spent so much time on nonessential activities (that they mistakenly thought were essential) and let the essential activities slide, causing the business to suffer.

Drafting your own legal documents, preparing your own tax returns and attending trade association meetings, while important to your business, are seldom essential, if ever.

Essential activities are important precisely because you should not delegate them. These are the activities you (and your business partners, if you have any) should perform yourselves because only you are motivated enough to give them the time, energy and painstaking attention they deserve.

Once you have identified the essential activities of your business, which of the nonessential activities should you delegate to others?

In three words: All of them!

That's right. You and your partners should be devoting 100 percent of your time to the essential activities of the business and doing the things necessary to grow the business. Virtually all of the day-to-day activities should be delegated to others, including the stuff you most enjoy doing.

So, now that you know what to delegate, how do you delegate, and to whom do you delegate? The answers in next week's column.

Cliff Ennico (crennico@gmail.com) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our webpage at www.creators.com.

 

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