5 Steps to More Smoothly Delegate Decision-Making
If you're building a successful, growing business, you are most likely adding staff. To continue to grow to a fully evolved midsize business -- one where others manage the employees and make the daily tactical decisions -- you will need to delegate.
However, like most business owners, you probably started out making all the important decisions. How do you transition decision-making to others? It is a process. You will need to train others to take on more authority and make good decisions. We recommend the following five steps to build an organization where your employees can make decisions and operate independently.
Step 1 -- Build the proper infrastructure.
Important: It isn’t safe to delegate before you have done this. The proper infrastructure consists of three things:
- Hiring the right people -- You can’t safely delegate if you don’t have the right people to delegate to In most small organizations, this means hiring people with potential and spending the time to mentor and train them.
- Document processes -- When documenting your processes, you literally write down how you want things done. Yes, this is boring, mundane work and no one is going to pay you an extra nickel because your processes are well documented. However, documentation is the best means for communicating how you want things done when you can’t be there. Skip this step and you will likely pay a price.
- Developing robust metrics -- You need to get regular reports that quantify the performance of your business. Financial statements are a necessary part of these metrics, but by themselves they are insufficient. You need operating metrics that tell you how things are going in almost real time.
Once the proper infrastructure is built, you are ready to delegate. However, your employees may not be ready to be thrown into the deep end. Follow the steps below to ensure they are ready for the new challenge.
Step 2 -- Employees provide recommendations.
If your organization is typical, employees bring you problems and you solve them. As a first step toward independent decision-making, insist that your employees bring you a recommended solution with the problem. You still make the decision, but you have the opportunity to coach your employees whenever your decision is different from the recommendation they brought you.
By the way, we find that leading your employees to a different conclusion by asking a series of questions is a far more effective way to train them than by simply telling them they are wrong. Another useful way to train your employees is to give them rules of thumb to follow as they make decisions. For instance, we worked with a company that had a goal of being the easiest company in its industry category with which to do business. The rule of thumb was to find the solution that would make things easiest for the customer.
Step 3 -- Employees make the decision, informing you prior to implementation.
Your employees are now making the decisions, but because they bring them to you before implementation, you can change any decision if it is going to run the train off the tracks. Here, we would caution that you do not countermand your employees' decisions except in the most dire of circumstances.
After all, you delegated that decision-making authority, so don’t take back that person's authority. If you have to change your employee’s decisions with any frequency, you have moved to this step too quickly. Go back to Step 2 for a while to give the employee more practice.
Step 4 -- Employees make the decision and implement it, and you're notified after the fact.
Don’t go here until you agree with essentially every decision your employees make. If at this step, they make a decision with which you disagree, it may be too late to recover. Our advice is that you not go to this step all at once. For example, you might say that the employee, without your approval, can implement any decision with less than a $10,000 impact. But you want to be involved in any larger decisions before implementation.
Step 5 -- Employees operate independently, while you monitor the results.
The final step is that you don't require notification at all. You simply monitor results and ask questions based on the metrics you see. Again, you may want to set dollar limits to determine decisions in which you need to be involved prior to implementation. However, to give managers complete authority over a division or department, you will eventually need to get to this step.
Delegating decision-making authority is a tricky business, but these five steps will help ensure that you "let go" as smoothly as possible.