If You Want To Get Your Company To Run Without You
Why Is Delegation Important?
Before we get into how to delegate effectively, let’s start with a quick summary of why delegation is a critical skill for any business owner.
Being able to delegate well means your company can thrive without you personally overseeing the details. This freedom allows your company to grow without you as a bottleneck while the quality of your work life improves as you no longer have to spend your time fighting fires and answering mundane questions. Best of all, your company is worth more.
As you can see in the chart below, those companies that can sustain a three-month absence of their owner are more than twice as likely to receive a premium acquisition offer compared to companies unlikely to survive the loss of the owner:
The 4 Degrees of Delegation
Delegation is clearly important, so why do so many small business owners fail to delegate tasks effectively?
The problem comes down to thinking of delegation in a black and white fashion. Instead of thinking of delegation as binary, think of delegation as having four degrees, where each degree offers your employee more decision-making autonomy and authority.
The First Degree of Delegation: Follow My Lead
The first degree of delegation is where you trust an employee to follow your instructions.
You create a Standard Operating Procedure and ask that they follow the steps you outline in your instructions.
This kind of delegation is suitable for common tasks where you’re clear on what you want done and how you want someone to do it. For example, you may delegate the task of entering a new contact into your company’s CRM platform.
The Second Degree of Delegation:
Research & Report
The second degree of delegation involves giving an employee a broader scope of responsibility to research the range of options for completing a project or task.
You’re trusting an employee to do their own analysis and bring you a short list of options to consider.
This kind of delegation is ideal when you don’t have the answer to a specific challenge and you’d like to see the breadth of possible options.
The Third Degree of Delegation:
Do It & Report
The third degree of delegation involves extending decision-making authority to an employee.
You trust your employee to make a decision, but you’d also like to be kept in the loop to coach your employee if you start to question their decision making.
This kind of delegation makes sense when you have provided your employees with a Standard Operating Procedure and you trust your employee(s) to think like an owner. It also helps if the stakes of a bad decision are relatively low.
The Fourth Degree of Delegation:
The fourth degree of delegation is used when you trust an employee to completely remove something from your plate.
It is best used when you have provided an employee with a Standard Operating Procedure for completing a task and the impacts of a bad decision are relatively manageable.
It can also be appropriate to use the fourth degree of delegation if a task is something you know little about and would be better handled by someone who is more knowledgeable.
If your goal is to build a business that can thrive without you, you need to master the art of delegation. Start by assigning a degree of autonomy you want your employee to have, and then outline a time-based or financial budget to work within.
Finally, encourage employees who get stuck to come to you with questions you can simply answer yes or no to, and you’ll find the number of problems that end up in your lap will diminish. All the while, you’ll be building a more enjoyable and valuable business.