Entrepreneurs: Delegate now, before it's too late

By Sophia Solanki , written on February 22, 2014

From The News Desk

A business's growth is hinged on an entrepreneur's ability to delegate effectively. You may have the brightest ideas, the best offering in the market -- but without getting the work done, these will mean nothing. It's no secret how the day-to-day management and running of a business soon becomes the only thing you do, and the business growth takes a backseat. The result -- stagnation, de-motivation and in the worst scenario, an end to your dreams.

An entrepreneur chooses the 'life' to do new things, be a visionary and build things he or she can be proud of -- all of which requires time and a very different focus than just trying to sustain and micromanage the business on a daily basis. The only way to stay focused on the growth activities is by delegating everything else. Richard Branson is a vociferous advocate of delegation and has demonstrated its power through the Virgin businesses. Successful entrepreneurs like Liz McKinley of Pinnacle Petroleum and Rafael Soares, Yoguland also have had their share of difficulty delegating, but have figured formulas for making things work. Point being -- you cannot win a war with an army of foot soldiers -- you'll need the leaders and managers to run the show. I also strongly believe that organizations should be built top down -- bottom up team building leaves you gasping for a survival breath.

While most entrepreneurs will agree with the viewpoint here, delegation of authority and responsibility is easier said than done. To be able to delegate, you'll need to trust your employees and hope they share the same enthusiasm as you along with the capability to do or manage the tasks entrusted. In real life, you'll never find the 'ideal' employee who will think, feel or do as you would -- but that's not necessarily a bad thing. As long as the general direction of how things get done post delegation is aligned with the business goals, you should be okay.

The trouble comes when even that is not achievable and the question is of incompetence. This is a hard one, especially as a startup or small business generally would not have the resources to splurge on experienced and expensive managers -- and often what you pay for is what you get. But there is not much of a choice here -- you'll still have to delegate and build processes to grow. So appreciating the difference in working styles and capabilities of your team members, tempering expectations and building an environment to get the best out of your team is the only option.

Liz (CEO, Pinnacle Petroleum), in her initial years of founding the company found it incredibly hard to let go of operational control and ended up getting involved in all key aspects of running the business. At some point, realizing how unviable her working style was, she slowly delegated responsibility by hiring smart, young people and learning to trust them do the job well. The trust paid off and now with a fledgling business under her wing, she wishes she hadn't made it so hard on herself as she did.

So when is a good time to stop micromanaging and delegating? I would say as early as possible -- at any given time, keep looking for things that you can make someone else responsible for and then monitor them to stability. An interesting study by Norman R. Smith and John B. Miner (1983), suggests that the inflection point for introducing managerial diversity and delegating authority in an early stage company is at a size of about $750,000 in assets and ~30 employees. The thing to note here is -- you cannot be a 30 people company one day and delegate everything the next. The process and thought has to start much earlier, possibly as early as when you are just a 7-10 people team.

The next big question is how and what to delegate? A general thumb rule that I've found helpful is that if someone is able to manage a responsibility 80 percent as well as you can, you have no business doing it yourself -- let it go. The idea is to provide leadership and focus on setting up sustainable and dynamic processes. Another good way to figure out what to delegate and what to personally drive is by identifying things that you can add the greatest value through and are aimed at growth. These activities become the core of your focus and remaining all can be fully or at-least partially delegated. A neat little delegation trick I learnt from experience is to do the process in four stages:

  1. Define and hand over the full responsibility to the identified candidate(s) as an experiment
  2. Step back, do not interfere and observe the process for a duration of few weeks
  3. Post that, iron out the kinks, pull back some tasks or give extra responsibility based on the observations of what went right or wrong during the period
  4. Stabilize the process, get the documentation in place and set up reporting time-tables and templates to get ongoing feedback on the delegated process
While some experiments will glide through and stabilize, others will bust at Stage 2 or later. In either case, you would have stress-tested the system and will know its capabilities to build upon it further. People are key when it comes to delegation, so hiring over qualified people, as long as you can afford them, is always a good idea.

Delegation of authority can sometimes also be a double-edged sword - balancing it right is critical to managing employee perceptions. Paul Kanarek, a former Inc. 500 company owner, found his employees demotivated and doubting the leadership after adding a senior management layer to the company. While Paul was looking ahead and delegating responsibility to grow as a company, the senior managers were unable to command the authority and respect he had hoped for. When delegating and stepping back, staying visible through the process and after is important to smoothen the transition. It is also critical to make sure that the new management structure is functioning capably and not altering the entrepreneurial culture, which is often what the employees join an early stage company for.

Delegating is one of the hardest things to do as an entrepreneur (especially when you are resource constrained) and is going to be a mixed bag of successes and failures. I have personally found successful responsibility hand-overs as some of the most liberating and satisfying experiences as an entrepreneur. The benefits are immense. Sometimes it's a call of survival too. Bottom line -- you can achieve nothing alone -- sharing your aspiration, dreams and responsibilities with your team and having partners in success is the only way to make things work. Looking at this list of New Year's resolutions of some entrepreneurs, it's a simple enough conclusion that being a control freak cannot work long term. Effective delegation only can help find the work-life balance and success that every entrepreneur dreams of.

[illustration by Brad Jonas for Pando]