Meadow CreekNews

The Delegation Dilemma

Filed under Business Management, Small Business, Venture Capital and Start Ups on December 3, 2008

One of the most common difficulties facing small business managers is dealing with the concept of delegation. Delegation is a vital element in ensuring the efficient use of scarce resources. In a small business the most vital resource is the owner or manager. Unfortunately, the lack of delegation can overwhelm that resource and decrease not only the effectiveness of the owner, but all of the company’s assets. The effect of this inefficiency is to hold the firm back from achieving its potential. Once the problem is understood it is much easier deal with. This paper addresses the issue in the context of not only the small business, but the one-person organization.

Delegation is the process of transferring responsibility for completing a task, whether a physical activity or decision making to another party. The most common barriers to delegation are:

  • Reluctance to give up control on the part of the owner.
  • Lack of confidence in the available staff.
  • Absence of staff to delegate to.

The reluctance of the owner to delegate authority or responsibility may come from several sources.

  • Lack of prior experience in delegation.
  • Habit of doing everything and making all of the decision when the company was first founded.
  • Misperception that delegation means giving up control.

Many small business owners do not have prior management experience and, therefore, have not had coaching and training in management techniques. Delegation is sometimes perceived as a sign of weakness. Delegating is thought to indicate an inability to make decisions or lack of sufficient energy and commitment to keep up with the needs of the business.

Quite to the contrary, delegation comes from an appreciation of the importance the owner has to the business. Recognition of this single fact should drive the owner’s desire to effectively manage his or her time so that their efforts can be focused on the most important aspects of the business. Control is maintained by:

  • Establishing clear limits to authority for others.
  • Defining expected results, measuring performance and following-up achieved results.

The most difficult impediment to success can be summed up with the adage that “old habits die hard.”

Once the commitment to delegate decision making or executing tasks to others is made, identifying the individual to delegate to is the next step. Often times the lack of highly qualified professionals on staff becomes a convenient excuse to not delegate. Here is where most small business people can begin to realize the real opportunity that delegation has to them personally and financially.

Only the most organized people manage to spend their working day focused on high value added activity. Most of us spend far too much time doing mundane and repetitive tasks out of force of habit or lack of desire to spend the time to show someone else how to do it. As a business owner, your time is worth a lot of money, not only to you, but your family and employees as well. They are depending upon you for their financial security and you owe it to them to do the best job you can. It’s your business and there are actions and decisions only you can make. You need to get out from under the pile of paperwork and get to work on those things that are really going to drive the growth of your business by adding meaningful value to your customers.

If you are paying bills, you are not introducing new products, creating billable hours or planning serious business initiatives. You are doing a task that someone else can do for you for far less money than your time is worth to your business.

At this point, many of you will say you are a one person show and there is no one to delegate to. You may be reluctant to hire an additional person for a variety of reasons:

  • There is not enough work to fill one person’s time.
  • You do not want to deal with having to manage a staff member.
  • You have a home office or can’t justify renting additional space for someone.
  • You do not have the extra equipment that would be required.
  • You do not want to incur a significant fixed cost of having full-time staff.

There are alternatives to using your own employees. Outsourcing is not the exclusive domain of large corporations, nor does it mean sending work half-way around the world to be done by people you will never see. You can turn many of the day-to-day activities you are currently bogged down with over to third parties. This will free-up your time to do higher value added activities like growing your business or spending more time with your family.

There are several steps in this process in order to make it a profitable investment for your business.

  • If your business does not have a Business Plan, develop one (Many will say even at this point that there is not enough time to do this. If so, just go to step 4)
    Include in your Business Plan the executable actions required to make it a reality and the timeframe in which they should be done.
  • Take an inventory of the activities you spend your time on at work.
    Determine which activities require your involvement and those that don’t.
    Decide on your business priorities and how you would invest your time if had more of it.
    Think through the process that you go through when you are doing those tasks that you will delegate or outsource.
    Select the person or company that you will work with to document that process and turn the responsibility over to them.
    Decide on performance measures that you will both track to ensure that the tasks continue to be done efficiently.
    Execute the plans you now have time for.
  • Each element above will be addressed in other white papers by Adaptive Business Systems. We at Adaptive Business Systems will be happy to assist in any phase of this process.

Richard Gabel

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