Business Growth — Stage 3 — Delegation Takes On A New Meaning
Delegation is Stage 3 in The Stages of Growth methodology and follows on from the Ramp Up stage. Companies are in this stage as they grow from 20–34 employees. New dynamics arise that test the leadership capabilities of the leader as the company grows and it’s critical to understand that what worked in the past may no longer work.
As a Stage 3 company, one of the most significant changes that occurs, is that the leader can no longer control the organization entirely on his or her own. The leader now needs to delegate work and decision-making authority to others.
The key objectives at the Delegation stage include:
- Moving the organization from a leader-centric to an enterprise-centric one.
- Creating a manager/supervisor layer within the organization, that provides training and empowers them with decision-making authority.
- Creating a productive environment by defining clear expectations, supporting the team to reach those expectations, and rewarding them when the expectations are met.
- Focus first on People, then Process, and finally Profit.
How To Manage The Change
The “rules of the game” change significantly at this stage, as the organization moves from a leader-centric to an enterprise-centric one. Failure by the leader to adapt to this change, will result in them hitting the wall and their organizations will become stuck.
Stage 3 is the probably the most dramatic for the founder/owner of the business, with regard to their ability to manage the change. Insisting on doing things the same way, greatly increases their risk of ‘entrepreneurial burnout’ due to the inability to effectively delegate work and responsibility.
As a Stage 3 company, the leader needs to recognize that the organization has grown beyond their span of control. The organization has become enterprise-centric and must learn to function without the leader’s input and decision making in every facet of the day-to-day running of the business.
One of the common things we notice in Stage 3, is that work gets delegated to others, but without the necessary supervisory empowerment. Supervisors are simply expected to do the work. Then if something goes wrong, you’ll often hear the leader say “What happened, they didn’t do it the way they were trained” or “They didn’t do it the way I would have done it”.
The leader must address this gap by focusing a significant amount of energy toward what we call the Manager “face of a leader”. This new emphasis and shift to the Manager “face” can be difficult for the leader, especially if they lack the skills or have little experience as a manager. Learn more about the Exceptional Manager Program which empowers management teams with the mindset, skills, and tools necessary to produce high-functioning teams.
Some of the Non-Negotiable Leadership Rules for Stage 3 are:
- Make sure every employee understands their positions and roles.
- Delegate both responsibility and authority to 3–5 capable managers and mentor them with regular meetings.
- Clarify and strengthen communication with all employees.
- Differentiate components of Business Development by separating Marketing, Sales, and Customer Service into three distinct teams.
- Revamp the company’s Business Model to optimize margins, refine revenue groups, and adjust customer segments.
- Establish a 3-Year Strategic Plan and a 1-Year Operational Plan.
Focus on the People
The additional headcount increases the complexity of the organization and the leader must delegate responsibility and authority. Handing over is one of the toughest things to do for a typical entrepreneur. But these changes are necessary as the organization moves through Stage 3, it requires hard work, diligence and a willingness by the leader to ‘let go’ of many things they felt comfortable doing. The leader now needs to start focusing on themselves as a Manager.
In Stage 3, the organization requires a leader that mentors the team, fosters a collaborative environment of trust and respect, and upholds high standards of success. The leader must now also shift their Face of a Leader to 60% Manager, 10% Visionary and 30% Specialist.
Coaching remains the primary leadership style with Democratic and Pace-setting as secondary and tertiary styles.
Up until this stage, the owner/leader, which we’ll call the CEO, has had to juggle managing, leading, and performing the work. But the juggling now has to stop. It also becomes important that the company begins to act more like an independent entity, separate from the leader, making it much more tangible and measurable. This is the first time that the leader needs to rely on their leadership skills to run the company instead of their technical skills. It is also the first time the leader is not involved in the day-to-day operations of the company.
Once the art of Delegation has been mastered, it’s time to move onto the Professional stage.
Here are links to the articles published on the other Stages: