Small businesses frequently reflect the personality of their founder. Many sole proprietorships are built from the ground up by dedicated entrepreneurs, who control every aspect of the fledgling company. Yet, as a business grows, it becomes too large for the same ‘hands on’ approach to be effective. More customers, a larger staff, massive budgets, increased paperwork, changing technology and more complex operations dilute the personal touch an owner can impose on every decision. Eventually, a crisis point is reached. A choice must be made. The company can either:
1. Stay small and manageable, by sacrificing growth and potential.
2. Spin out of control, as growth exceeds a single manager’s ability to oversee it all.
3. Delegate authority, with a team of managers handling different areas of the business.
Although only Option 3 leads to viability and growth, it is not unusual for small firms to choose Option 1, or default to Option 2 by refusing to choose at all. It is especially difficult for family businesses to survive the transition to thriving, medium sized-companies. Most do not survive the generational transfer. When personality takes precedence over productivity, companies falter. This concentration of power may make an owner or manager feel better, but too often, it is the employees who suffer. Owning a company does not require owning every business detail. Sometimes the hardest thing you can do, but the best thing for the business, is to let others work with you.
“Don’t be a bottleneck. If a matter is not a decision for the President or you, delegate it. Force responsibility down and out. Find problem areas, add structure and delegate. The pressure is to do the reverse. Resist it.” – Donald Rumsfeld (Statesman, Secretary of Defense, 1932-)
