DILEMMA: I'm finding it increasingly difficult to keep track of everything that takes place in my small, but growing company. In what areas should I be delegating day-to-day running to a manager and how can I set up an effective hierarchy of authority?
ISSUES: The number-one issue has to be you. Are you thinking like an owner? How ambitious are you for the business? It is important to get these things clear before you consider what you are good at, what you have time for, what's missing and so on.
The job of the smart owner is to make sure that his board or management team has the right strategy and the right resources to implement it successfully, to run the business smoothly and to comply with all the necessary regulations.
The most important resources are human and financial.
Nowhere does it say that you, as the owner, must run every aspect and know all the details. Delegate the operational flow in three key areas: sales, finance and production/distribution.
Clarify what you need to achieve your ambition. It will then be easier to determine whether you already have a team to which tasks or functions can be delegated or you need to go outside. If the latter, what will be the role of managers you bring in? How will you attract them and how will you monitor them without interfering?
- Think first as an owner and second as a manager.
- Be clear about your objectives. Do you want to grow a serious business or have fun with a nice little earner?
- Be even clearer about your role and what you should focus on.
- Figure out what you need in your top team and check whether you've got it within before you look outside. If you have, then go for a gradual delegation of functions rather than instant abdication.
- Delegate as much operational stuff as you can. Keep hold of the strategic and resource allocation decisions.
- If you decide to recruit, make it your top priority. Think hard whether to use search or selection. Be clear about the spec.
- When new employees arrive, overdo the induction and define your respective roles clearly. Agree to review them after a month.
- Decide what details matter and monitor them vigorously. Set clear parameters for responsibility. Align objectives and rewards.
- Expect people to whom you delegate to screw up every once in a while - it's only natural. Don't undermine them, but do fire serial mistake-makers.
Patrick Dunne works with 3i.