Steve Preda

Steve Preda

30 Apr, 2018

If you are, or ever wanted to build a business, the art of delegation is a critical skill to learn.

But is this really true? – you ask. Can one not build a fully automated business with technology, that needs no people to employ?

Possibly.  But I would challenge you to show me a business that keeps adapting to today’s rapidly changing environment and evolving without people to do that continuous strategic adjustment work. Perhaps AI will be able to replace big picture thinkers some day, but that is the world of the Terminator, when humans have lost their dominance over our planet. For the time being, strategic thinking remains to be our domain.

Theoretically, you can develop a product yourself and sell it to a big company to scale.  But I am not aware of a single example when the owner of a one-person company made a significant payday.  The most likely reason being that the proof of concept must include a large number of users that are difficult for  solopreneur to amass.  Further, If no one else knows the inns and outs of your product, then you are bound to be tied to the business even after it is sold.  There is no getting around delegation if you want to create a business.

Delegation is also the engine of leveraging yourself.  By delegating tasks and responsibilities, you are freeing yourself up to doing higher value activities which will allow the business to grow and create more value.  You are only growing as an individual by stretching yourself, which will be uncomfortable and sometimes painful.  The pain comes from having to do something you are not yet good at, while giving up the comfort of doing work in which you already are an expert, by delegating it to someone who will be stretching and initially will likely not do a great job.

If everyone is stretching, the organization is growing.  Of course the amount of stretching going on must be managed, to avoid injury to the business. (For more on this, see a video I recorded about Jim Collins’ 20 Mile March concept.)

When delegating, you can choose to delegate the process, the outcome, or a combination thereof.

Delegating process is preferred, when the person you are delegating to has limited experience and/or a limited desire to figure out a better way.  Such employees will welcome a blueprint which they can follow, so that they do not waste time having to figure things out and can rely on executing what has already proven to work. This is the way most franchises are managed and this system is great for people who are good at following processes, without a compulsion to reinvent the wheel.

The other way to delegate is to delegate the outcome.  This is an empowering approach to people who always want to tweak and improve things. This method will foster innovation and buy-in from curious and driven people, who want to create, as much, or more than they want to implement.  You have to be careful however, to manage R&D time, so that execution not suffers delays or escalation of costs beyond what you can afford.  This approach works great with people who will be willing to tinker with the process even on their own time, to get better solutions to progress their reputation or for the pride they take in their work and their ingenuity. One of my former partners in my investment banking firm, Robert Janos Nagy was the epitome of product innovation and process improvement. Over the years, Robert helped us significantly upgrade the quality of the information memoranda we produced at MB Partners.

Be careful with delegating Outcomes however, to people who require a high degree of structure and process. To those, delegate process, but specify the desired outcome.

For the best results, combine the above approaches.  Provide your champions a blueprint, but empower them to improve upon it, as long as they achieve the outcome you seek at the available time and expense budget.  To create the right blueprint, the Entrepreneurial Operating System will be an excellent guide, which preaches the 80:20 rule for creating and testing a handful of simple processes that your staff can learn and habituate and that will stand the test of time.