It might seem a bit of a waste to take a step back from your business… you know it better than anyone, right? But as true as that might be, you’ll seriously devalue your business if the day-to-day operation is dependent on you. Guaranteed.
I come across a lot of business owners who have this great sense of pride in knowing EVERYTHING about their business, which makes sense because the business that is there is a reflection of them and their accomplishments. “I’ve done it all, I know every customer, I’m willing to get my hands dirty, I’d never ask someone to do a job that I wouldn’t be able to do blah blah blah,” but there is one thing they forget… if they are the hub and everyone else is the spoke, all they have is one very stressful and risky JOB; not a company that is worth selling or that can run without them.
If everything has to go to you to operate, how can you leave? Is there anything really to buy or transfer?
[clickToTweet tweet=”Most buyers don’t want a job, they want free cash flow. @builttosell @valuebuilder #builttosell” quote=”Most buyers don’t want a job, they want free cash flow.” theme=”style2″]
This doesn’t mean the only way to protect the value of your company is to leave completely, but it does mean that you should begin to shift your focus and priorities to building a company that can run effectively when you aren’t around. Think of it like this: just do the things you WANT to do in your business. If you love sales then that’s fine – just stick to doing sales, and then get a CFO in to handle the numbers and maybe also a CEO to oversee the day-to-day process.
BUT DO NOT BLINDLY LEAVE THINGS TO OTHERS… you should interview and systematically hire and delegate. Coming from experience, just handing something off and hoping someone can do it is not the right answer. Put some effort and work in so you can trust the process and the people you put in place.
Whatever the situation, the principle remains the same: there is serious value in delegation and removing yourself from the hub and joining your colleagues out on the spoke. Read on for seven ways to make this happen:
1.) Start Developing Standard Operating Procedures:
Standard Operating Procedures (SOPs) are simply fundamental to good business practice. Not only does it help remove you from the hub but it also sets you up for potential scalability. Like a sports team might have a play book, a company needs the same kind of guidelines to reference. A sports team knows that if somebody gets hurt they have a replacement ready to fill the vacated position. While no company will carry a roster of ready-made replacements for every position, the playbook concept of knowing exactly what those positions are, how they are performed, and what tools are used, still applies. Once you have a proper handle on that, every member of staff is replaceable… including you!
2.) Align All Performance Incentives and Reviews:
The wrong incentives drive the wrong behavior and the right incentives drive the right behavior. Sounds simple right? Conceptually it is but so many people get this part wrong. Either they overpay and “spoil the goods” or they under pay and witness their key employees burn out or change their attitudes in the wrong direction.
[clickToTweet tweet=”‘Incentives drive behavior… pure and simple’ ” quote=”‘Incentives drive behavior… pure and simple’ ” theme=”style2″]
If someone’s pay packet is directly linked to overall company performance in some fashion then they’re bound to take more of an interest in the workings of the company as a whole, which is exactly what YOU want. This does not mean you should just throw cash or equity at the problem. There are many ways to align all behaviors with key metrics and tools like deferred compensations structures, phantom stock and annual performance-related bonuses, just to name a few.
[clickToTweet tweet=”‘Manage what you measure and measure what you manage'” quote=”‘Manage what you measure and measure what you manage'” theme=”style2″]
3.) Introduce Next-Level Management to Important Customers:
It isn’t just about internal procedure. What if you wanted out of the business and you managed 250 client accounts across the country, but the person replacing you hadn’t met any of them? Always be thinking one generation ahead and involve your junior staff enough so they can hit the ground running in your absence. It’s as simple as having them sit in meetings and gradually handing them client-specific tasks.
4.) Groom Next-level Management into Relationships with Partners:
Instead of taking it upon yourself to tell the rest of your staff what you’ve done in those annual meetings with your CPA, Banker, Attorney, key suppliers & vendors, how about asking them to come with (at the basic / non confidential) meetings? You can still retain control from the standpoint of being the main point of contact, but the opportunity to start delegating grunt work and increasing exposure to those relationships is HUGE! You can always review and challenge their work, i.e. “why does this say this?” “why was this forecast not met?” etc. etc.
5.) Hold an “Ask Me Anything” Meeting
I am giving this credit of this idea to from John Warrillow, the Author of Built to Sell and Owner of The Value Builder System™
We did it in the early years of our company Imaging Path, but like many things, we fell out of a good habit. This kind of meeting is where your employees or customers get to “ask you anything” without an repercussions. Don’t worry, it’s not a roast 🙂 BUT make sure that they are comfortable asking any question, zinger, or anything you can think of. This is a way for you to peer inside your own company’s soul and then address whatever it is that may be standing between you and having a company that is self-sufficient.
6.) Trust your staff, but don’t blindly reward loyalty:
It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.
—Steve Jobs, Founder, Apple Computer
As Jobs said, a company has to trust its workers to do the job they are supposed to do (everyone knows he was not always good at executing this, but you get the point). This must be tempered by a firm and non-sentimental judgment of their suitability for that job in the first place. Many companies get themselves in trouble here. With the well-intentioned idea of promoting from within and empowering their staff, they wind up promoting to incompetence. Only trust your staff AFTER you are sure they’re right for the position, not before.
7.) Plan a vacation where you’ll be completely off the grid:
You might think you’ve done all of the above but the only true test of your hub and spoke-proof company is what happens when you aren’t there at all. Almost no business owner can ever bring themselves to do this, but they really should because of just how much a company can learn about itself when it is made to adapt in this way. And you get a nice holiday out of it too!
Not only will you be able to see the rewards of your hard work but you should be able to enjoy one hell of a vacation! AND I promise you when you get back and your company has not burned to the ground, that next vacation will be 10x better than that first one!