In the early stage of any start-up, the entrepreneur has many roles. They are not only the managing director but also the human resources director, office manager, chief accountant and bookkeeper, head of sales and, if necessary, the cleaner.
But a growing business requires an entrepreneur to delegate and for many small business owners, it is a difficult step. After all, the success of the business has largely depended on the entrepreneur’s vision, skills and ability to wear many hats at once.
But experts say there is no choice if they want the business to grow. When the business gets to a certain size, you simply can’t be across everything. It’s a case of delegate or die. If you don’t delegate, you don’t grow.
Management consultant Kevin Dwyer from the Change Factory puts it bluntly.
“I have seen these businesses where they might get to 100 people but they can’t grow beyond that because the MD, the CEO, or whatever his title is, the owner of the business, refuses to delegate,” Dwyer says.
“So they shrink back to 65 because they can’t control the space and breadth of what they do.”
“There is a limiting number at somewhere between 20 to 50 people. You would find it difficult to grow beyond 50, in some cases beyond 20, if you don’t delegate. You can’t be across everything that’s happening.”
“If you got a contract, or made an acquisition and you grew to 120 people, if you didn’t delegate you would find yourself unable to cope. So you make errors, because you skim across things instead of giving them the attention they should get. You will be late on things.”
“Both the time and width and more importantly, the mental bandwidth is just not great enough.”
Dwyer says entrepreneurs get to a point where they have to ask why they are in business, and what the purpose of that business is. They have to ask themselves whether delegating is really that painful.
“My advice to small business is to delegate,” he says. “You can run a business where you want all the business to be in your own image, and everything is done your way or you can run a business to achieve a goal and know there are many paths to get there.”
“As long as those paths don’t cross the values you want the organisation to have and as long as they don’t cross into areas of business or strategy you don’t want the business to have, then the diversity of people and talent is the only way to grow.”
Business coach Ashley Thomson says that delegating effectively is the key to business success.
“I work on the theory that the key to success is laziness,” Thomson says. “You have to have a lazy streak in you so that when you get something you say: ‘Who can I give this to? How can I get rid of this rather than do it myself.’”
“The people that struggle the most are the control freaks who feel they have to do everything themselves the right way.”
Experts, entrepreneurs and business leaders say there are 10 rules to follow in delegating.
Director of Connect Furniture Joe Bruzzaniti says that delegating does not come naturally so it is important to have the best people with you. The more talent there is, the better the choices you have when it comes to selecting someone to do the job.
“There is a deeper question there about knowing what you need,” Bruzzaniti says. “But if you get that right and have good people around you, you are in a good position to delegate.”
Zelko Lendich, managing director of egg producer Farm Pride, says he specifically head hunts talent that he can delegate to. As a result, he looks for people from narrow industries where there are not too many around with technical skills, but who have a reasonable breadth of knowledge about his industry.
“I am a believer of in-house development. So if they are immersed in the company culture and the industry, you are developing skills, whether it’s in operations, or accounting or whatever.”
Recruiting well gives you more choices.
Bruzzaniti says that early on in the business when the entrepreneur is still feeling their way, it’s best not to delegate. The trick, he says, is recognising when it’s time to start doing it.
“In the beginning with an entrepreneur if you are setting out on your own, it’s about getting a handle on everything and learning really quickly.”
“With a start-up, when you are doing everything for the first time, there is a billion unknowns and so it makes sense that the entrepreneur is close to the ground. You can’t delegate too soon and you need to understand the core principles of the business.”
“Once you get a handle on that, then you are ready to grow, and that’s the growth point where the introduction of people and the delegation comes into its own.”
“There is a time and place where it makes more sense to hold the reins more tightly in the very early stages. But then, it becomes really damaging if you do that in the later stages.”
Thomson says entrepreneurs can’t afford to leave it for too long. There are warning signs telling them they need to start delegating.
“You know it’s too late when the business starts to stagnate and you start to see that there is staff turnover in excess of what it has been in the past,” he says. “They are the signs you need to look out for.”
“Generally I find the best time to bring in a general manager is when you start to lose contact with a lot of the original team that were reporting through to you.”
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