Q: I run a small company and bring in about 30 percent of the business myself. Is it worth my time to get upset when my employees order expensive pens? It seems silly to fuss over small office items, but at the end of the year, even that can make a difference.
A: As the CEO, you need to be spending your time making the biggest difference possible in the things that are most important. In the short term, it sounds like that means pulling in 30 percent of the sales. Are the pens the difference between survival and failure? If so, put your attention there. But my guess is, you've let this day-to-day annoyance distract from your real job: building your business--a very different job from front-line salesperson.
Building an organization means marshalling your team to own the firm's success. Your driving question must become "How can I enroll a team in the business?" rather than "How can I make a sale?" As an entrepreneur, expect to step in and do front-line work when needed. But moving from entrepreneur-plus-assistants to a true business means helping your employees understand your vision for the business and then training and supporting them in whatever it will take for them to own the vision and make it real.
Because growing a business means delegating responsibility and authority, your job is hiring, developing and delegating to your people so they take over the daily work and you can concentrate on the big picture. Even on days you're mired in the details, always keep asking, How can I develop a team that runs the business? One powerful answer is using your vision to enable delegation.
Start sharing your vision, so employees can use it to make decisions. Scott Cook, founder of software company Intuit, shared his vision for Intuit as a financial-services giant with every new employee. Twenty years after founding the company, it became the billion-dollar business he imagined, in no small part because everyone understood where the company was going. The shared understanding let them choose products, markets, strategic alliances and business development opportunities that led relentlessly toward Scott's vision.
People need more than just vision, however; they need the skills and knowledge to do their part in making the company successful. If your sales associates don't understand the cost/benefit analysis behind purchasing frivolous pens, then don't expect them to make good purchasing decisions. The short-term fix would be a rule about what they can or can't buy. A better fix would be helping them understand the financial ramifications of purchase decisions and enlisting them to design a cost-controlling system.
Have them think carrot and stick--how to reward themselves for responsible spending and how to penalize themselves for irresponsible spending. If they design the solution, they'll help implement it and educate new hires in how it works. Your job becomes teaching them the financial principles they will need to design a system--budgeting, profit, cash flow, etc.--and helping them design measurements so they know if the system works or needs revising. This takes longer than just saying "Don't buy pens over $10," but over time, they will become able to solve problems by building business solutions, not just blindly following a rote policy.
If you find yourself thinking "They aren't insightful enough to take that responsibility," you might find you're wrong. When a leader asks people to step up and surpass their limits, people often surprise themselves by doing things they never thought possible. (There's real science behind this. Social psychologists have documented the Pygmalion effect, in which people meet the expectations of those around them--good or bad. Click herefor a brief overview.)
So don't sell them short. Besides, what's the alternative? Spending your time pulling in 30 percent of the sales and worrying over pennies? You deserve better than that. By making them your partners in a common goal rather than tools in doing your work, you'll build a business rather than just run a store.
As an entrepreneur, technologist, advisor and coach, Stever Robbins seeks out and identifies high-potential start-ups to help them develop the skills, attitudes and capabilities they need to succeed. He has been involved with start-up companies since 1978 and is currently an investor or advisor to several technology and Internet companies including ZEFER Corp., University Access Inc., RenalTech, Crimson Soutions and PrimeSource. He has been using the Internet since 1977, was a co-founder of FTP Software in 1986, and worked on the design team of Harvard Business School's "Foundations" program. Stever holds an MBA from Harvard Business School and a computer science degree from MIT. His Web site is a http://www.venturecoach.com.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.