Delegate, delegate, delegate...
These are the favourite words of almost every business coach, every business podcast or even that Instagram influencer you started following hoping to get “what should I do with my business” advice.
Undoubtedly, delegation is how you grow a business. Moving from person to process and from an individual to an organisation is “the journey” any business has to venture on.
But what most of these business gurus fail to say is, how to bring direction to that delegation. What can be delegated, when and how. Most importantly, why delegate something at all.
I have observed a couple of SMEs who struggle to understand this very puzzle and here’s what I have noted down so far.
Stage 1: The Founder’s Trap
Most first-generation businesspeople start here. They are the heart, limbs, mind, soul, everything for the business. The founder’s trap, the term coined by Dr. Ichak Adizes in 1990.
They may have some people who can be called their team, but they’re followers. The founder is needed in every process that the business has.
From acquiring customers to serving them, from finding vendors to dealing with them; the founder is the decision maker and doer, just assisted by a few people. Every bill needs their signature, every meeting note needs their approval.
What results is, a team that is incapable in the absence of the founder and a founder that cannot imagine taking a day off.
I can vouch for this because I have operated from a hospital bed while I was admitted for COVID.
But, many founders grow from this stage to the next, only to realise it’s not as easy as it was in the last business book they read.
Stage 2: Crisis of Autonomy
Most founders elevate themselves up to here. A business starts looking like a business rather than self-employment, people around the founder can be called a team.
The people are knowledgeable and capable enough to run most day-to-day operations without the founder’s active involvement. They can coordinate with vendors, assess customer requirements, maintain books and mostly carry everything a team should.
But, there comes a classic case of ‘not letting go of the control’. Larry Greiner talked about it in 1972 in his research paper “Evolution and Revolution as Organizations Grow”.
Founders pass the responsibility to the team but keep authority to themselves.
The team can decide the client relationship or how to maintain a vendor roster or how to market the business but they cannot do anything without convincing the founder.
Eventually, the team stops trying. They don’t do what is right for the business but they do what is acceptable to the founder.
Very few founders can go from here to the next stage, where they relinquish their insecurities.
Stage 3: The Surplus Capacity
This is the most beautiful and most critical juncture in a founder’s lifecycle. They exercise delegation in a real sense.
The team is allowed not just to perform their duties but to take decisions for the betterment of the business. The founder is not required in every meeting or their approval is not critical to routine matters. The team knows the path and walks the path, without needing the founder to carry the wagon.
The founder is not obsolete, they’re still needed in critical moments, to provide direction, to fix situations only the founder’s business acumen can.
Finally the founder can take a week off, and can be at peace as the business is in the right hands.
And as Edith Penrose stated in “The Theory of the Growth of the Firm” in 1959, the newly unlocked capacity does not automatically mean the growth of the business.
Stage 4: The Ornamental Founder
This is where delegation has done its job. The team runs the business, and the business no longer depends on one person. That part went right.
As founders aren’t essential on every discussion table, their presence is no longer requested. Rather, their uninvited presence creates an environment where the team feels uncomfortable, unable to discharge their duties with full potential.
More often than not, founders at this stage start creating work that is not required, taking meetings about the meetings, creating solutions for nonexistent problems and in the process, they look desperate to stay relevant.
And here comes Noam Wasserman’s “The Founder’s Dilemma”, a Harvard Business Review dated 2008. He argues that, as the business evolves, the operational role of a founder is gone.
At this stage, the company requires a founder to look at the bigger picture, bigger markets, bigger risks and bigger opportunities. The team takes care of today’s business and the founder is expected to prepare the business for tomorrow.
Evolve or Erode
This is rather a good problem to have for any founder, unless they themselves become a problem for the business.
A founder who cannot move upwards along with the team will reach the threshold faster than the team will. The founder executing and deciding everything has to die in order to give birth to a founder the team needs.
Unlearning old skills and learning new ones is not optional anymore. Founders who refuse to go through this process, to accept bigger responsibilities and to outgrow their own old version will eventually be obsolete.
Either the company will grow stagnant before trembling or team members will find their way out of the stale leadership.