Baby, You Can Drive My Company
It could be called the founder's quandary: how do you delegate key functions and yet maintain control?
Lori Booker, who founded $2.4-million CBR Public Relations in Maitland, Fla., in 1984, faced that question early last year. After CBR experienced a two-year growth spurt, she realized she had to relinquish day-to-day financial control to her two vice-presidents. That was the only way she could focus on her company's long-term goals.
But letting go wasn't easy for a punctilious founder like Booker, who would review every single press release and billing slip before it left the office.
To help with the transition, Booker turned to her unofficial advisers at her networking peer group, The Entrepreneurial Achievement Model (TEAM), in Orlando. The group recommended a financial adviser whom it kept on retainer -- a resource that, courtesy of Booker's TEAM membership, would come much cheaper than a Big Five consultant. The adviser showed her how she could monitor the financial performance of her newly autonomous vice-presidents by using a simple software modification.
Instead of doing a pricey systems overhaul, Booker needed a simple package that could link upgraded versions of her existing programs. So for $25,000 all told, she upgraded and merged her billing and accounting programs. The modification let Booker separate the financials for her two divisions -- each headed by a VP -- and allowed her to evaluate the VPs based on their divisions' performance.
The VPs, in turn, became responsible for their own bottom lines. Booker called longtime clients, used to dealing just with her, to explain the changes. "I said we were trying to grow, that I'd be less hands-on," she says. Booker also encouraged the VPs to be up front with clients and to approach her when they were in doubt about any financial or management issues.
The overhaul worked. The VPs have seized the reins when it comes to hiring or to creating new project teams for their divisions, since data on costs per employee and profits per team enable them to justify such expenditures to Booker. CBR has hired seven employees since the switch in management structure. "They no longer ask if we can afford something," says Booker. "They say, 'I think we can afford something, and here's why."