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Organizational Add

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The workshop speaker opened his presentation to a group of small business owners with a challenge: "If a bomb exploded right here, right now, who would replace you as the leader of your company?" Most admitted they had no clear successor, and the few who had one expressed substantial concerns about his/her ability to grow the company. Even though my company was over 15 years old at the time, I was in the majority that didn't know who their successor would be. My company would have fallen apart if I got hit by a proverbial bus.

It was a jolting wake-up call! Like many business owners, I was involved in every aspect of my company from accounts payable to project management to business development. I dreamed about the cash I would get when I sold the company, but I had done little to build an organization that was capable of succeeding without me. When I returned to my office that afternoon, I emailed the top people in the company and asked: "If I got hit by a bus on the way home today, what part of our operations would be your biggest problem tomorrow?"

We compiled the issues in a written plan. In addition to expected concerns about my relationships with key customers, bankers, and strategic partners, they were worried about:
  • Lack of written procedures for project and financial management,
  • Written personnel policies that were outdated and not followed,
  • The ad hoc nature of decisions about pricing, hiring and salaries,
  • Erratic business development priorities and actions.

In short, my company suffered from a severe case of organizational Attention Deficit Disorder (A-D-D): employees jumped from one of my priorities to the next without knowing why or being given consistent guidance. I frequently blamed others for not reaching our revenue and profit goals, but organizational A-D-D was the real cause. I had been doing everyone's job except for my own, which was to plot the company's strategic direction and get out of the way.

After a year of intense effort to address my managers' concerns and implement changes, I was surprised that the company's growth rate and profits both increased. The managers expanded client relationships, and made more effective project management and financial decisions. In addition, I was able to reduce my work to four days per week in the first year, and to three days per week after the second year. Employees joked that the company operated better then when I was working full time! That may or may not have been true, but clearly the company was stronger because it had written procedures and managers had leeway to run the business - and it commanded a higher value when it was sold.

It may seem paradoxical, but your company would be more valuable if it could operate without you. Any one individual, even someone as plugged-in and skilled as an effective CEO, can exercise a limited span-of-control and cultivate just a few relationships. If you feel you must be involved in every decision, you're the governor that limits the speed of growth because there aren't enough hours in a day for you to make every decision. Therefore, sustained growth requires business owners to transfer operational responsibilities to their staff, thus freeing themselves to open new markets, win new clients, and increase the company's street value.

It's probably true that no one can do most jobs in your company as well as you can. After all, you founded and built the company, and are undoubtably the most visionary, experienced and skilled person on the entire staff. But if your company depends on you for survival, it's not worth very much without you and there is no way you can leave. Ask yourself the following questions: Whose job am I doing today? Who should be doing these things? and How can I stop doing them and give responsibility to that person(s)? Successful owners ask themselves these questions regularly, and use the answers to change their behaviors and build their staff's capabilities.

In today's rapidly changing global economy, it isn't your people's arms and legs that produce success, it is their hearts and heads. Your employees need to be led more than managed. When urgent but unimportant things divert your staff's attention from strategically vital tasks, organizational A-D-D may be the cause. The cure is for you to refocus the team's purpose and get out of the way! Learn more about building a company that can be sold for top dollar in the book "Expensive Mistakes When Selling a Company" - see http://www.57mistakes.com 
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