By: Jim Roddy, VP of Marketing & VAR/ISV Business Advisor at the RSPA
To help VARs and ISVs delegate effectively, the RSPA is creating a series of blog posts that will dissect delegation into tangible, digestible actions. Access Part 1 of our series here (The 5 Steps to Effective Delegation), Part 2 here (Systems + Controls = Maximum Delegation), Part 3 here (10 Decisive Delegation Actions), and read Part 4 below.
- RetailNOW 2021, July 25-27 in Nashville, will host the breakout session “Best Practices for Gaining Real Traction Toward Your Goals and Business Growth”
- the RSPA Academy EXCELerate eLearning platform features the self-paced course “Effective Delegation”
- for one-on-one guidance from an experienced RSPA Business Advisor, email us at Membership@GoRSPA.org
What makes being the leader of a growing business an odyssey is that you have to develop yourself – become more than you were when you started – or you get left behind. Let’s break down the three stages of that journey and the related required skills:
Startup Stage | Founder
- You need to be good at Level 1 labor: sales, operations, accounting/finance.
- Your activities personally touch the customer and your vendors.
- Don’t waste time writing detailed policies, procedures, and guidelines; you should embody and display best practices in your everyday actions.
- What you bring to the business is the next customer, a good product/service deployed, a client problem resolved, and accurate invoices created.
Expansion Stage | President
- You are the department head of Level 1 workers; you are now in Level 2.
- This stage still involves customer and vendor contact.
- Now is the appropriate time to establish policies, procedures, and guidelines. Write down established best practices so the people working for you can perform to standard.
- Do what it takes to ensure that the people who work for you are making the next sale, deploying quality products/services on time, resolving client problems, and invoicing accurately.
Established Corporation | CEO
- Department heads work for you; you are a manager of managers. You are now in Level 3.
- This position requires no contact with customers, vendors, or Level 1 employees. Some successful CEOs keep working with these constituents, but many successful CEOs do not.
- As new policies, procedures, and guidelines need established, it should be done by someone under you.
- Once you have dozens of employees working for you, you need to become an executive – the CEO. This position requires skills unrelated to sales, operations, or accounting. Every ongoing job must already have been well delegated.
- If you spend your time on details too small, it is at the expense of more important issues. When left undone, those bigger issues will harm the growth of sales and profits.
Let’s repeat (and bold for emphasis) that final bullet: If you spend your time on details too small, it is at the expense of more important issues. When left undone, those bigger issues will harm the growth of sales and profits.
Getting bogged down with day-to-day details – the work you did as a Founder – is often times the leading factor that stunts the growth of VAR and ISV organizations. Yes, a new install needs completed but it’s also important you establish installation best practices and train employees to perform those tasks to standard. It’s also important to close the sale on a new restaurant that opened in your town, but somebody besides the company’s leader needs to be capable of that job.
The Duties of a CEO
What are the duties of the Chief Executive Officer, a Level 3 manager of managers? Management pioneer Henri Fayol, who we quoted in Part 3 of this series, designed the Management Pentad: plan, organize, direct, coordinate, and control.
More specifically, the CEO is responsible to:
- Make payroll
- Increase or decrease staffing levels appropriate to sales and profits
- Provide direction especially with important one-time initiatives such as launching a new product line, entering a new market, opening a new office, acquiring another company, and undertaking a cost-reduction drive
- Plan, organize, direct, coordinate, and control the company’s finances including cash, investment, borrowing, and capital allocation
- Clamor for increases in dividends, productivity, customer satisfaction, and product quality
- Instill confidence in company management from the organization’s five constituent groups: customers, suppliers, employees, stockholders/investors, and the local community
When I was a young company President trained on these duties by our company’s founders, I scratched the following notes:
- Are we thinking far enough out?
- Do we have the labor/skills we need?
- Have enough labor for everything in your current business -plus- all the initiatives you’ll encounter in the next 12 months -and- maybe more.
My honest answers to those first two questions were a hard “no.” The team we had was excellent, but they were already stretched handling our current product and market set. That made our current month’s income statement stronger – we weren’t carrying “extra” labor – but it also closed off additional avenues to growth (new markets, new products).
When we chose to invest in additional staff, trained them, and delegated Level 1 work in these new areas, our sales and profits grew significantly. Instead of only trying to squeeze 2% or 5% more out of our current customers, we tapped into lucrative areas we had previously only hoped to penetrate.
Leverage Your Dreams
Business leaders can leverage their ideas, dreams, and efforts by providing a vehicle for others to realize their dreams. If you care about only your dreams, you will likely attract only laborers to your organization. If you can provide a conduit for your partners to accomplish their dreams – while accomplishing yours at the same time – you can get there.
Hire employees who have ambitions and aspirations similar to yours, train them, and delegate to them. You will be able to help each other because you’re on the same journey.