Business Owners Offer Tips on How to Delegate and Get Employees Involved
Your Company introduces a weekly column by TEC Worldwide, an international organization of more than 7,000 business owners, company presidents and chief executives. TEC members meet in small peer groups to share their business experiences and help each other solve problems in a confidential round table session. The following questions and answers are summaries of discussions at recent TEC meetings in Southern California.
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Q It has been brought to my attention that I tend to run my company with an iron fist. I understand that today’s employees prefer more enlightened leadership, yet I have a hard time allowing them to participate in the decision-making process. After all, this is my business and I like to run it a certain way. How can I learn to let go (a little) and give my people more authority and autonomy?
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A You have just identified the No. 1 killer of entrepreneurial companies--the founder’s inability to let go of total control.
As long as you insist on calling all the shots, your company can only grow to the limits of your capabilities. Once you hit the wall, which will happen a lot sooner than you think, the business has nowhere to go except into the tank.
You’ve already taken the first step by acknowledging the problem. When it comes to letting go and delegating real responsibility to your people, however, it may help to understand the evolving role of CEO.
Until recently, the primary task of the CEO was to make decisions. Today, however, successful CEOs need to engage in a number of increasingly complex roles that have to do with creating a positive, challenging work environment that brings out all the skills, talents and abilities of their people.
These roles include:
* Developing and communicating the vision, mission and strategy. In successful organizations, employees know where they are going and how they will get there. Your job as CEO is to create the road map and keep people focused on the ultimate destination.
* Developing organization-wide problem-solving skills. In a world where entire markets can vanish overnight, people at all levels of the organization need to know how to solve problems. To develop this skill in your work force, stop barking orders and start asking questions that elicit their best thinking.
* Building a culture of continual learning. The Internet and new technologies have stripped away most of the traditional competitive advantages, leaving your work force as your primary market differentiator and your greatest competitive weapon. Maintaining that competitive advantage requires building a culture that supports ongoing growth and development for all employees. Keep in mind that cultural change always starts at the top.
* Developing change management skills. In today’s world, change has become the norm rather than the exception. Your ability to purposefully and proactively manage organizational change (rather than letting it manage you) will play a large role in determining the success of your enterprise. By focusing on these and other critical elements of the CEO role, you won’t have time to make all the decisions anymore. Not only will you grow and develop as a leader, but your company and your employees will benefit as well.
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Q I’ve been considering revamping our compensation program, and I’ve heard a lot about pay for performance--some good, some bad. What’s the skinny on this increasingly popular management trend?
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A An often misunderstood buzzword in today’s corporate lexicon, pay for performance should more appropriately be called “pay for PPR”--performance, productivity and results. After all, if the performance doesn’t help to achieve your organizational goals, what’s the point in paying for it?
Regardless of what you call them, however, well-designed and implemented pay for performance plans create a model that guides on-the-job behavior, reduces the need for supervision and encourages creativity and initiative while simultaneously reinforcing company profitability.
That’s a lot to ask of any plan, which explains why so many of them miss the mark by a wide margin. However, following certain principles will greatly increase your chances for success.
According to the Los Angeles-based compensation firm Meek & Associates, which polled more than 300 CEOs regarding their use of incentives to reward and reinforce performance, the four most successful incentive plan practices are:
* Linking incentives to the company’s business results.
* Tying the plan to performance.
* Communicating as frequently and as much as possible.
* Involving employees in the process.
The quickest way to derail a pay for performance plan? According to the survey:
* Lack of alignment with the business strategy and objectives.
* Insufficient communication and feedback.
* Using discretionary measures.
* Setting unrealistic goals.
Pay for performance plans don’t lend themselves to cookie-cutter solutions. To have any chance at success, your plan must take into account the unique circumstances of your business, your work force and your corporate objectives. At the least, these fundamental concepts should provide a good starting point.
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If there is a business issue you would like addressed in this column, contact TEC at (800) 274-2367, ext. 3177. To learn more about TEC, visit https://www.teconline.com.
