The fourth in a series of articles from our guest contributor, Cambridge Judge Business School, discusses 'the Founder's limit' and the impact it can have on growth companies.
In order to grow, you have to let go
As Will entered his office that morning on Monday at 7.30am his shoulders dropped. His assistant had laid neatly on his desk his schedule for the week ahead. Every single slot seemed to have been booked. As he took a closer look, meetings were scheduled one after another. All of them were internal meetings, rarely involving someone external. No reflection time and certainly no time to allow him to do what he liked best: grow the company!
His 8am meeting was as always his 1-to-1 with Frank, the company COO. Will vented his frustration about his packed schedule, only to find a less than sympathetic ear from Frank. Frank challenged Will’s need to be involved in ALL the core processes, leaving a startled Will to sadly agree to the observation: not a single area of the business would proceed without his contribution.
How did Will get there? How do so many SME CEOs who have grown their businesses from a small unit to a successful larger organization, like Will, end up spending all their time in the business, and no time at all on the business? Unfortunately, Will’s situation is common in growth companies: a phenomenon well known as “the Founder’s limit”. The charismatic person who starts it all up, but then does not want to, or does not know how to, relinquish control. Such insistence on control very quickly leads to the inability to handle the complexity of a growing business; CEOs end up dropping one ball after another, and driving the business into crisis.
Often enough the proposed remedy is “to let go.” But what does this practically mean? Here are some key steps to help you let go.
1 – Define your leadership style and align your behavior
Delegation starts with a clear statement about one’s leadership style. If CEOs need to get others to step up to the challenge they need to convince them to come along the growth journey. Good leaders are usually authentic but they also are adaptable. Good leaders are also able to contextualize their actions and sometimes inspire, but other times command. How each one develops such a mix of approaches is highly personal, but one needs to live by its leadership style.
2 – Identify what you need to let go
How one lets go starts with what they let go. A useful exercise to declutter one’s tasks horizon is to develop a tasks map: describe on paper all the tasks that you are involved in and map them against how crucial they are to the business and how much personal enjoyment you draw out of them. Identify which ones of these tasks you need to keep or stay involved in either because of relevance to the business or because of personal interest or enjoyment.
3 – Build a strong motivated leadership team
As CEOs realize that they have reached the need to delegate, they come to a loss. They always struggle with whom to delegate to. Oftentimes, the existing team is either operating at top limit themselves or are lacking the leadership ability or even the skillset necessary to take over some of the delegated tasks. SME CEOs need to build leadership teams through hiring new members with complementary skillsets, or by investing in the development of their existing capable and motivated employees who will do things that CEOs themselves cannot do.
4 – Adopt effective standardized practices and systems
SMEs are also hindered by a common tendency to always reinvent the wheel. Starting with the CEO, the leadership team must take a step back and standardize: identify which processes and tasks are repetitive and they could benefit from the adoption of existing best management practices or technological support systems. Is every new sale really that different and the CEO should be involved? Or can it be templated and performed through the same exact steps? CEOs need to lead the way of standardized ways of doing things, which allow handling more volume without them personally calling all the shots. The effective use of these processes and systems has been shown to enable SMEs to successfully scale up.
Letting go is often a painful course to pursue. Painful from a personal standpoint but also from an organizational viewpoint. But unless it takes place through a systematic set of process steps it may result in both pain and loss; a loss in momentum, a loss in sales, a loss in key staff members, all losses that SME cannot afford. So SME CEOs should ask themselves: could it be that the block to growth is me not letting go? If you want to grow you need to let go!
Co-authored by Prof Christoph Loch, Dean of Cambridge Judge Business School (CJBS); Hanadi Jabado, Executive Director of the CJBS Entrepreneurship Centre; and Prof Stelios (Stylianos) Kavadias, Academic Director of the CJBS Entrepreneurship Centre Cambridge. 07.11.16