How to Walk Away From Your Business…and still collect a paycheck!

Most business owners invest a tremendous number of hours in their business. From the day to day activities to making high level strategic decisions, there is never a shortage of work to be done. So how can you possibly walk away and still collect a paycheck? The more responsibility your management team takes on, the less you have to do. Of course giving your leaders more responsibility requires that you have highly capable leaders with enough capacity to take on more. And while it’s true that those leaders can free you up, you also have to be willing to let go. If this sounds enticing to you, read on!

Strengthening your management team

Assess them!

Whether you do a formal assessment or a back of the napkin look at your team, you need to be honest with yourself about what you’ve got. You need to evaluate their competencies, skills, attitudes, and the key behaviors against what it takes to make your company profitable. Do they have it? If so, are you using it? It’s amazing to me how often I find a highly talented underutilized resource doing 1/10^th what they are capable of! What roles and responsibilities can you give them that will maximize their effectiveness?

If your team doesn’t have enough of what you need, where are the gaps? You know what it takes to run your business – you’ve been doing it for years! You know the gaps that would show up if you took an extended vacation. Can you develop your employees and close those gaps? Could they be capable one day?

Hire or Develop?

My experience is that in most business owners are loathe to let anyone go who has been a good loyal employee, even if they don’t have what it takes to contribute more to your business. And unfortunately, most owners don’t have a budget to add more employees to their payroll to round out the gaps. They need a manager who can take on more. These are tough calls and there is no right answer. If you think you’ve got employees who have the potential to grow into a key management role, the investment in developing them is well worth it! If not, your loyalty may stand in the way of your ability to step away from the day to day.

Let’s plan to work with what you’ve got.

Build Bench Strength

When I talk to owners about building bench strength, I usually hear something about how they want to send their employees to training, but … ‘they can’t free up the time, or it’s too expensive, or I can’t find the right training, etc..’ Training can be highly effective for development, but it’s not the only approach. Why not consider how much they will learn through immersing them in broadening experiences. For example, send your key employee to spend a day or two with a non-competitive similar agency. The exposure to other work processes, culture, and methodology can be incredibly enlightening and pay tremendous dividends. Or give them a special project that forces them to engage with your business differently. Or support their participation on well-respected local or national non-profit board, or encourage them to apply for a seat in a Chamber of Commerce Leadership Program. All of these are powerful broadening experiences that will benefit your employee and your business. Of course, you must ensure they have a clear set of objectives and outcomes going in to these experiences, and you’ll want to debrief with them afterwards to make sure they get the learning you expected.

When you think about developing your people in this way, they will seize opportunities that you may not even know existed and reach potential you may never have recognized in them.

Let go.

So you did it! You developed your employees and they are doing a great job! Now it’s time to let go. You need to give them enough space to do what they are capable of doing. It doesn’t mean you abdicate responsibility, but it doesn’t mean that you tighten your grip, either. Will they make mistakes? Absolutely! Should you set up boundaries so the mistakes are not a catastrophe for the business? Absolutely! So what will it take for you to release a little bit? Maybe it’s up front meetings to discuss strategies and plans? Maybe it’s agreeing upon a set of boundaries or criteria -- within which they can make a decision -- and outside of which they need to involve you. Just be aware of a natural tendency you may have to negatively judge any action or decision they recommend, just because it’s different than yours. Your job is to help them learn, and to learn from them! They just might have a better idea!

Enjoy Baja … or Tahiti… or your house at the beach.

You’ve done well. Your business remains profitable – or maybe has become even more profitable. Your management team is running the show. You can check in periodically, give them a pat on the back, and maybe eventually, they’ll become your new owner.

Are you willing to face reality?

When you’re dealing with the day-to-day challenges of running your business, it can be difficult to keep the perspective you need to manage for the long term. That’s where a board of directors comes in. Formal or informal, these advisors can provide guidance to help your business be profitable and sustainable. They bring an objectivity to look at your business, industry and environment and help evaluate whether the people and strategies you’re putting in place are having the desired effect.

Most privately held companies don’t have a board of directors or even an informal board of advisors. This can put their leadership at a disadvantage. Sometimes the owner can get so close to the business that they focus on the day to day and lose sight of the key strategies and competitive landscape. Conversely, they can get so focused on the changing demands of the industry that they aren’t focused on the deliverables they need today.

Boards can be a powerful way to provide the fresh set of eyes that you need. You can seat a formal board of directors or an informal board of advisors.

When you create a formal board of directors, you are essentially paying someone to take on fiduciary responsibility for your company. The board is responsible to the shareholders to make sure the company is not being mismanaged and to help build shareholder value. Your expectation should be that they will reinforce and guide you in what is best for the shareholders in the short and long term, and hold you accountable to take action. If you are the only shareholder, an informal board of advisors may suit you better.

Informal advisory boards often are not paid. They are hand-selected people you like and respect, but there’s no expectation that you will necessarily take their advice and no real consequences if you don’t.

Yes, consequences. A formal board of directors can take action -- recommending changes in leadership, hiring external consultants, or driving changes in strategy or structure. They’re not going to get deeply involved in managing your business, but they can have a significant influence over what transpires at the top level. When it comes to succession, a board can also be that objective third party that pushes you to start planning for the future. They’re tuned in to whether you are potentially putting the business at risk by putting off the inevitable, and they may recommend or bring in the right resources if you won’t.

So how do you form a strong board of directors for your company? Start by identifying the skill sets that you would like to have represented on the board. It may be someone with financial skills who’s comfortable analyzing your P&L and balance sheet or playing an audit oversight role, someone who is retired from a career in your industry who brings deep industry knowledge, or someone with human resources or marketing expertise that bring valuable perspective on key issues or opportunities.

With skills identified, scan your environment for respected, credible leaders who are willing to put in the time to help your business be successful. Finally, take the time to bring them on board, orient them to your business, and share with them your expectations and how you expect them to contribute to your business success. One final note: If you are going to set up a formal board with fiduciary responsibilities, it might be wise to involve your attorney to make sure that you are setting up the appropriate structure, expectations and systems for success.

Happy hunting!

Photo by Unique Hotels Group

When Talking Isn’t Enough: How To Hold An Engaging Conversation

What would you say if I told you to quit talking to me? In fact, I want you to quit talking to everyone. What I want instead is for you to engage with others. Engagement occurs on a different level than talking to or talking at someone. When we engage, we transform our experience of ourselves and our experience of others. Let’s look at three levels of conversation and discover what it means to be engaged.

3 Levels Of Conversation

Level 1: Level 1 conversations are about exchanging stories. I tell you about my day or week and you respond with your own story that complements, outdoes or reminds you of mine. Sometimes the intent is to validate you and your experience, as in, “Oh my gosh! The same thing happened to me!” Other times we go for the attention grab: “Oh, that’s nothing! Listen to this.” While rich in information sharing and often energizing, Level 1 conversations don’t require a high level of emotional engagement.

Level 2: Level 2 conversations circle around common interests or beliefs. We hash out the latest political scandals or vent about work. In these conversations, each party seeks commonality and support of their worldview. For this reason, Level 2 conversation frequently morph into advice-giving sessions. However, engagement begins as we tap into our core interests and beliefs in these conversations.

Level 3: Here’s where the real work gets done. In level 3 conversations, we are discovering—and appreciating—the uniqueness of the individual. These conversations have more depth, more vulnerability and require deep listening for thoughtful replies. It’s not enough to share a story, though a story might be exactly what is needed to communicate understanding. It’s not enough to discover common interests or beliefs, though we likely will. Instead, we go further and make a commitment to listen and create a safe environment for others to share who they really are, rather then the person we want them to be.

Not every conversation needs to be a Level 3. In fact, that would be exhausting! A quick round of stories at the water cooler or a lunch date to gripe about the boss is fine and often all that’s needed. But look for opportunities to hold Level 3 conversations. It may be with someone you’re mentoring, with a vendor or client with whom you seek to establish a relationship or with a colleague you feel has ideas and opinions—even if they differ from yours—worth exploring at a deeper level.

These conversations take work. It’s hard to let go of judgments or stop our minds from racing to what our reply is going to be and instead be fully in the moment and listening to the person in front of us. In the long term, however, Level 3 conversations are where the deepest of friendships and business relationships take place and grow.