Updated: Mar 28, 2021
Today, I want to cover a topic that is so common to small business owners, it comes up as a coaching topic with over 90% of my small business owner clients. The topic is “stop working “in” your business and start working “on” your business.
I graduated in 1987 from Colorado State University with a degree in Mechanical Engineering. I worked as a field engineer for four years until I got hired as a sales engineer with Honeywell in 1991. I had worked in dual capacities selling and engineering with Honeywell until in 1997, I started out on my own. I grew a company called Ennovate Corporation to 30-employees and annual revenues over $10M; and then sold it in 2013.
Today I coach small business owners… so my official title is Business Coach.
It doesn’t matter what the conversation is, at some point, I’ll say, “I’m an Engineer”. This is the heart of who I am… and probably always will be.
Sadly, this rigid identity seemed to cloud my ability to grow my business. You see, I took pride and joy in doing engineering. Like it or not, when you have 30-employees, this is the last role you should be doing in your company. Even if your company is an engineering firm.
This same challenge exists for most of my business owner clients. They were great at whatever skill they had. In some cases, they were great salespeople. In other cases, they were skilled carpenters. Still in other cases, they were great engineers. To transition from being great at your profession to be a great business owner, you ultimately must let go of your identity as an expert and allow your people to be experts.
As I type these words, I know how distasteful this may sound to most of you who love what you do. You say, but Jeff, “I love engineering… or I love being a trial lawyer… or I love being an electrician.” All I can say is that if you truly love these roles, don’t start a business.
There is the one exception. If you want to run a practice where you are the expert professional and surround yourself with assistants to handle your administrative work, sales and marketing, then you will only be limited in growth by how many partners you want to take on. Most dentists, lawyers and some engineering and architecture firms do this quite successfully. That’s how they get business names like Simpson, Lawson & Sons. In their defense, many states have required that some licensed professional firms are owned by a licensed professional.
Back to the topic at hand.
When I realized that my business wouldn’t grow, if I didn’t empower my employees to run it, I created a goal. The goal was that we would have a key client who didn’t know my name.
Let me explain. When I started my engineering firm, I did everything. I sold projects, I designed the projects, I supervised the construction of the projects, I would even provide warranty and service support after the projects were completed.
Early on, I knew I needed to outsource portions of my work to grow. The first outsourced position was construction management. I hired construction managers to manage the work after it was sold and engineered. I then outsourced engineering as I hired engineers to design the work. I then outsourced marketing. The last part of my business to outsource was sales. I had hired salespeople, but always felt compelled to be present on important sales meetings and presentations. In many cases, customers would refer to me be name instead of my company’s name.
My employees laughed at me at first when I said that my goal was that new clients would never know who I was. After sixteen years, it finally happened. We acquired a $3M customer who didn’t know who I was, and I was super excited.
Why? Because I felt like my company was a genuine business. I felt I had grown something independent of myself. I could take a long vacation and know that my business would survive. In fact, I was now training my managers to grow in the same way that I had.
One more thing. This sense of accomplishment was so much greater than creating an innovative engineering design. So, even though I still consider myself an engineer, I had graduated to something that I felt was even greater… an entrepreneur. But it couldn’t happen until I fully let go.
Enough about me. Let’s talk about how you can create success that is much greater than you in your business.
Lesson #1 – You must want it. As I’ve already said, “You have to want it.” If you love your profession and have no desire to create a business with your profession, then get a job. There is no benefit you will receive in starting your own business; and you will limit anyone that you hire as an employee to be your assistant. Who wants that?
Lesson #2 – Create a Compelling Vision. The vision I created for myself was that customers would not have to know me to do business with my company. To do that, I had to create an organization chart. I had to consider what my office space would look like to house all my employees. I then created a financial plan, marketing plan and sales plan that supported that vision.
Lesson #3 – Backfill Your Skill. Your first step of growth is to replace your expertise. This means you need skilled professionals to execute each facet of your business. In my case, there was an administrative facet, an engineering facet, a sales facet, a marketing facet, a construction management facet, and an ongoing service facet. I hired individuals to take on each one of these roles. In some cases, I made bad hires and had to back-track, but ultimately, I had people who I felt could confidently execute each facet of my business without me.
Lesson #4 – Grow Your People. Having skilled people to do the work is a great start. However, to continue your growth, those people must now let go of their expertise to some extent and lead other experts. It’s not natural to be a leader. In fact, it’s not even natural to want to be a leader. Most people gravitate to leadership positions because they want a bigger paycheck. In some cases, they may want more control or power.
In my case, I needed a sales manger to manage my sales team. If you’ve ever been in sales, you know that sales managers and salespeople are two different types of people. If you don’t know this, you’re in for a rude awakening. I needed an operations manager to manage our construction managers. I needed a business manger to manage my administrative team. These groups became departments in my company.
It may interest you to know that most of my leaders were not necessarily experts within the departments they managed. They knew that their value was in leadership, not in expertise. To grow leaders, you can’t simply promote your best employee to this position. It’s tempting because you think such a promotion is a reward for a job well done. If you want to reward good workers, give them a bonus or a raise, but don’t automatically think they are the best person for a leadership position.
Lesson #5 – Let go. This is the most important lesson I’ll convey in this podcast.
There’s a common guideline to empowering your people. You first do a task while the junior person watches. They then do the task while you watch. Finally, they do the task on their own.
There are two resistances to this process. The first is the person you’re training. They’re very comfortable when you’re there to guide them or are always available to advise them. It’s very uncomfortable for the trainee to do a task on their own. Granted, some employees want to be left alone, while others seem needy. So, different people will react differently to empowerment. Regardless, eventually all of your employees will have to be independently competent for your company to grow.
The second resistance is you, the trainer. You don’t fully trust that your trainee is ready, no matter how ready they are. You may not trust the trainee’s character. Maybe you think they’ll succumb to some sort of temptation to cheat or cut corners. If you’re good at what you do, you may even think that your trainee will never do the job as well as you can.
While these feelings are often not justified, lacking skill and character do exist in the workplace. So, to fully let go, you need to have an easy way to verify that work is being done well on behalf of your company.
Lesson #6: Use Metrics. For you to verify that your company is doing quality work that is resulting in profit for the company, you need to measure what you delegate. If you don’t measure, there’s almost no way that you can know the people you’ve trusted, are doing the job you want and need them to do.
Each function has different metrics. Here’s what I used for my teams.
In sales, closed sales amounts at a specified gross margin was the measurement. Because we had 6-month to 1-year sales cycles, I also measured achievement of specific milestones in our sales process. Many call this the sales funnel.
In engineering, there were two metrics. This was because engineers participated in sales as well as final engineered projects. So, the first was combined with sales in how much work was being sold. The second was the complaint rate from operations. If engineers didn’t design well, our operations folks who had to install their designs would let you know.
In construction, they were measured on overall delivered profitability as well as the timeline that was allowed for construction.
No matter what your industry is, you can find a measurement that allows you to ensure your people are diligent in their work without micromanaging them.
Lesson #7 – You still have a job. Many of my clients are reluctant to let go, because they feel useless. After all, if their staff is doing all the work, what job is left for them to do? Should they sit in their office and play solitaire on their laptop?
As the leader of your company, it is your job to work “on” the company. Think about your company as a car. Each component of your car needs to work well for your car to perform well. However, this car is a little different in that it is a growing car. If your car could do the quarter mile in 10 seconds to start, to grow, you’ll need to do the quarter mile in 9 seconds or drive a longer distance at the same rate.
As the CEO of your company, your job is to create plans on how to improve the performance of your company. This could mean expanding product lines. It could be branching out into other geographic territories. It could be re-organizing to improve efficiency. It could be partnering with other companies to provide innovative bundled services. The sky is the limit to what you could be doing, if you aren’t micro-managing your people.
Lesson #8 – Why grow? This is a great question. After all, you could just play solitaire in your office; or take a very long vacation; or retire. Why invest any time and effort thinking about growing your company?
Change is the one constant in our free-market economy… as it should be. Whether you choose to change or not, the world around you will change. Your employees will get restless and want to grow their career opportunities. Your customers will be searching for the best value whether it comes from you or your competition. And, your investors, if you have investors, want a financial return that doesn’t happen unless you grow the value of your company and their investment.
Lesson #9 - Reduce Your Workload if You Grow. If you grow right, you will also notice that you will put in less hours at work, and more time at home, on vacation or living the life you truly desire.
I hope you’ve learned a few things about how to stop doing the work of your company and start working “on” your company. Or what I call “Letting Go”. If you’d like to learn more about Mechanics & Mindset Business Coaching, please visit our website at www.mmbizcoach.com.