A friend of mine recently called and needed to blow off some steam. His organization grew out of a passion discovered by accident. He jumped on his passion, started a nonprofit, and the organization took off. “We are at $2 million in budget and I have figured out that I don’t have the right people. A consultant waltzed in and told me to hire an administrator at a six figure salary immediately – lives depend on what we do. I am not sure I can jeopardize our programs by putting out that kind of salary. I don’t want to be in the place of hiring someone and then letting them go in six months because our revenue projections were not quite right.”
Sound familiar? This founder’s story is not unlike any other founder who has experienced the exhilaration of watching their blood, sweat, and tears turn into a vibrant, howbeit, gangly organization. At the same time the founder experiences a sense of legitimization and affirmation in the risk they engaged they also face burnout in trying to keep things moving in the right direction. Their original employees don’t have the skills and competencies needed to keep up with the new demands for structure and systems. If left unaddressed the founder ends up feeling like all they are doing is chasing their tail.
Business entrepreneurs, non-profit founders, and church planters all go through this very predictable stage of organizational development. It is important to recognize that founders are simultaneously their organization’s greatest asset and greatest liability! Founder’s who use an excessively autocratic style become toxic to their own organizations creating the pathologies that ultimately deal a death-blow to the organization. In a fast growing organization like that of my friend the crucial question is, “Will you mentor future leaders in your organization?”
The challenge is making the time. The hardest transition for a founder has two aspects. First, a founder must learn to delegate activity so that there is enough of a margin to spend time developing others. Second, the founder must recognize when it is time to hire a different kind of person.
Delegating effectively is not simply handing off tasks. Why? Fast growing organizations typically run with time coefficients that are driven by ego not planning. “I want this done yesterday” is the predictable demand. The result of this ego driven time coefficient is that delegation occurs on a bungee cord and delivery and service suffers. Every task that is not accomplished at light speed is pulled back by the increasingly irritated founder. Add to this that no one can do the task correctly. How do founders escape this trap? There are three critical skills every leader must develop: define your working values, be consistent in delegation, and recognize when you need a new kind of employee.
First, name the values from which you actually work. Take the time to name what is important in how tasks get done. For example: I value cost effectiveness, excellence, and ambiance. I want those around me to be attentive to all three when they make purchasing decisions not just one or two. I value teamwork, assertiveness, and responsibility. When people go to work around me I expect them to give me their best insights and their best work. I can’t see everything in the market place and I don’t possess omniscience. However, early in my career these values were implicit and not explicitly a part of my thinking. As a result I became frustrated with the performance of my employees whose work had to be redone because they failed to meet my expectations i.e., my values. Write out your values and talk with your team about them and show them how core values inform daily decisions about how tasks are done. For more information see http://wp.me/pYuoc-dL.
Second, be consistent in your delegation. This requires that you understand the levels of delegation and use these levels specifically to (a) carry out more work and (b) develop the capabilities and capacities of your current team. Avoid the three cardinal sins of poor delegation: (1) Over management – delegation on a bungee cord. This results in stunted skill development and poor decision-making down line. (2) Under management i.e., sloppy delegation without boundaries – also possesses a fuzzy scope. This results in frustration. (3) Scapegoat or Surprise accountability – you did not know the assignment was yours until just before it is due. This results in anger. Remember to match individual follow-through ability with the tasks being delegated. Remember the less competent an employee is the more directive you need to be. Conversely the more competent the employee becomes the more supportive you need to be. Expect your team’s competency to increase.
So, what are the critical components of good delegation? (1) Delegate to clear outcomes and expectations. Use specific verbs for outcomes: plan, implement, or report. (2) Delegate to clearly defined time frames. Timeframes must be realistic to the task. (3) Delegate using the appropriate level of delegation i.e., proper to the skills of the volunteer or staff member to whom you plan to assign the task for example:
- Level 1: Measure and report back or Research and report findings
- Level 2: Research and present options based on findings
- Level 3: Research, recommend a response and report back before doing
- Level 4: Act and report on the results
- Level 5: Act with no further communication
Third, recognize when to take the leap and hire that administrative professional. Fast growing organizations share a common behavior. They are opportunity driven and not driving opportunities. This means becoming less intuitive in how the organization is run and more systematic. What indicates that it is time to hire that professional manager? Is your organization rapidly growing and is it characterized by: Self confidence – Founder indispensable; Eagerness – High energy; Sales v Marketing orientation; Seeking what else to do; Sales beyond the ability to deliver; Insufficient cost controls; Insufficiently disciplined staff meetings; No consistent salary administration; Leader surrounded by claqueurs; Increasingly remote leadership; Leader’s inflated expectations; Unclear communication; Hope for miracles; Unclear responsibilities; Internal disintegration; and a Workable people-centric organizational structure? Then you are at the turning point.
My friend above was a little surprised to hear me agree with the consultant he rejected. “You do need to hire a capable administrative person,” I said. “Everything you have described to me fits the profile of an organization that is moving toward its own adolescence. If you don’t begin to make the shift now, your organization will become toxic and you will burn out.”
My friend is about to begin a powerful and difficult journey. There is more to this transition than simply finding the right person for the job. That is important. But, for the founder the transition means three big changes.
First, a different kind of leader is needed, one who can bring systems, policies, and administration to the organization. This requires a different set of skills and way of seeing the organization. The organization does not need someone like the founder it needs someone who can complement the founder’s style knowing that the two perspectives will conflict at times. The manager cannot be stronger than the founder but must be able to disagree and engage in the kind of fierce conversations needed to bring about a new level of operational discipline.
Second, recognize that the organization will experience goal displacement i.e., a shift from more is better to better is more occurs. Accounting functions begin to look at profitability and long-term funding rather than only the sales or donations generated. In for profit organizations pricing and product lines become more predictable and profit is as important as cash flow. Founders generally think that cash flow equals success when in fact the company may be going broke. This is equally as true for nonprofits who have yet to integrate operational controls to decide whether their administrative and program dollars exist in a healthy ratio.
Third, recognize that conflict during this period of change is predictable and normal. During this period a temporary loss of vision may occur – that is normal. A shift occurs that makes the organization sovereign rather than the founder sovereign. Policies are made then challenged. The point is that the organization becomes a reproducible system it has the ability of moving to a new level of effectiveness in its mission.
What can go wrong? In this critical transition failure looks like a loss of mutual respect and trust among those who have formal and informal control of the decision-making process. The temptation is to return to a time when the company was smaller and flexible. The founder can fire the new manager. Yet if this occurs the organization does not revert to the past level of fun. Instead, it enters a time of uncertainty and self-doubt. The other risk is that the organization my lose its sense of mission and purpose and engender an environment of rule following in which the entrepreneurial drive disappears entirely.
If you understand your core values, if you exercise good delegation, if you recognize the need to diversify the leadership of your organization and develop leaders in every function of the organization, then you are in a good place to take the next step and move to a different level of success in what your organization intends to carry out. And so, my friend has begun his journey to a different way of working. How about you?
 Ichak Adizes. Corporate Lifecycles: How and Why Corporations Grow and Die and What to Do About It. (Englewood Cliffs, NJ: Prentice Hall, 1988), 48-55. Adizes’ book is a must read for Founders in all types of organizations. The more his concept is understood the easier it is to predict organizational transitions and apply the right organizational strategies at the right time.