Delegate – Unlock the Maximum Value of Your Business

Owners of small to medium sized businesses often find it hard to delegate management tasks. This is especially true of founders of the business.

Here is a critical truth: to the extent you are engaged in management of the business, you are decreasing the value a buyer will pay for the business. A buyer wants a business that runs itself, not one that depends entirely on you and other owners. Full delegation of management responsibilities is not just a way to reduce your stress; it's part of Prior Diligence, a strategic move to unlock the maximum value of your business through a successful sale.

How can you implement delegation of management? It requires a structured, multi-step approach that shifts responsibilities from you, the owner, to your capable business team.

The first step is to audit what management work is done by owners over a period – perhaps a week, or even for a month. Identify the tasks that are urgent but not important – repetitive, non-strategic tasks such as routine administrative work, scheduling, or data entry. Also identify the important but not urgent tasks – strategic planning, monitoring of operations, and leadership activities – which are ownership tasks.

Review the personnel available for delegation in terms of willingness to accept additional work, current skills, and potential for growth.

Initially delegate urgent but not important tasks to the right individuals to successfully accomplish the tasks. The delegation must be a clear communication of the task and the expectation of performance. If the task is not described clearly, the performance may not meet the expectation of the delegator. On the other hand, if the performance desired is not clearly defined, it will be difficult to recognize the success of the accomplished task. The description of the delegated task should include quality standards, non-negotiable details of desired procedure, the action that defines accomplishment, and the specific time for completion. To avoid micromanaging or hovering, set regular milestones with specific metric standards that will indicate progress and be instances of mutual communication to prevent misunderstandings or failure to complete the task on time.

Ensure the person receiving the delegation communication has the necessary authority (access to systems, permission to spend up to a certain amount, and decision-making power) and resources (tools, budget, and training) to complete the task without needing to constantly revert to you. If the task is new to the person receiving the delegated task, provide coaching or written procedural instructions as to how to accomplish the task.

Where there are problems, the communication protocol should require the delegated party to offer a proposed solution to the problem presented.

The delegation process is not complete until the task is finished and reviewed. Once the task is finished, meet with the employee and provide feedback. Praise effort and recognize accomplishment. Provide constructive guidance on what could be done to improve performance and accomplishment in terms of the specific task delegated and the goals of the business plan. Ask for feedback from the party having accomplished the delegated task to help you improve your delegation process.

Utilize the success of this task accomplishment to build confidence and trust for both the delegating party and the party accomplishing the delegated task. As the individual demonstrates competence, gradually increase the complexity and scope of the tasks you delegate to the employee, transitioning from delegating a single task that is urgent but not important to delegation of an important function (for example, from running one report to being responsible for the entire monthly reporting process).

The steps to implementing effective delegation of management tasks from a business owner to an employee of the business are: audit the tasks completed by an owner in a period, identify the tasks into two categories – urgent but not important and important but not urgent, review the personnel to receive delegated tasks for skills to accomplish the task and willingness to accept the delegation, delegate an urgent but not important task with clear communication, establish milestones to measure progress and signify times for communication, recognize accomplishment of the task with feedback recognizing effort as well as accomplishment, and receive feedback on your delegation process.

You can be the owner who successfully delegates managerial responsibility to employees and thereby increases the probability of utilizing the Prior Diligence strategy and Dynamic Planning to receive the maximum value from your business interest. Complete information on the Prior Diligence strategy and Dynamic Planning is available at the Owning a Business Substack (rickriebesell.substack.com).