Freeing up valuable time to work on long-term objectives for a business is a constant struggle for owners. Inc. 500 CEO Mary Naylor shares advice on gaining the necessary reflection time you need to get your business to the next level.
Every business owner I have talked with perpetually struggles with the quandary of how to transition from working "in" the business to working "on" the business. How do we get ourselves out of the day-to-day issues of personnel problems, billing adjustments, proposal writing and the actual delivery of the service or product? When do we crossover to spending the majority of our time working on strategic planning, new product and relationship development, and thought leadership?
Over the past 18 years of running my two businesses, I have struggled to find a way to strike the balance between the hands-on operation of the business and the reflection time required to lay the groundwork for future growth. I have tried many different approaches to become, what I call, the ultimate CEO -- one who can extricate herself from the daily grind to work on developing new strategies to push the company forward. My many attempts have included scheduling a personal "off-site day" for strategic planning, retaining a CEO coach, attending countless seminars, and forming accountability groups with other business owners.
While I have yet to arrive in the promised land of working "on" the business, the lessons I have learned from others and my own experiences, help put the ultimate owner's goal within reach. There is no magic formula for success, but rather a practical set of steps to spending more time working on long-term strategic plans for your business.
Reaching the next level
Most of us know about the stages of growth a company progresses through as it evolves. From early or start-up stage, to emerging growth, to mature company, each stage has a unique set of indicators and requirements. In order to grow your business, the primary responsibility and goal of EVERY business owner is to push and advance your business to the next stage.
To reach the mature company stage, the company must have the necessary infrastructure and team members in place to operate without you. Yes, operate WITHOUT you. If the company would fold in your absence, you're not there yet.
What is the key for moving your business to the mature stage -- the point where you truly are working "on" the business the majority of your time? The ability to transition from one growth stage to another is all about obtaining "leadership leverage." The more day-to-day duties and roles that you can delegate or eliminate will move you closer to obtaining leadership leverage. That is, you are leveraging your invaluable time as the company leader to focus almost exclusively (at least 80% of your time) on performing activities that create the most future forward value for your company.
Think about your best days. You are involved in big deals, new products, new relationships, etc. You are making high-level decisions. The more of these you can make on a monthly, weekly, daily, and ultimately, hourly level, the more your company will grow.
Know your hourly rate
The first step to achieving leadership leverage is knowing what your time is worth. Several business owners I know use their hourly rate to monitor how they spend their time. Your hourly rate is not your salary divided by the number of hours worked. Instead, it is amount of money you want to make or your revenue target divided by 2080 (52 weeks times 40 hours a week).
If you spend your days doing $15 per hour work, standing at the copier and collating proposals, it will be impossible to grow. Remember, leadership leverage is about continually increasing the hourly dollar value of the activities you're involved in. As a company expands, so should value of work you are involved in.
Three keys to leverage
Here are three steps to leveraging your time so that you are working "on" the business instead of in it.
Analyze what your time is worth. As mentioned above, take the amount of money you want to make or your revenue target. As an example, let's say your revenue target is $5 million in sales. Divide this number by 2080. This means you need to be involved in activities and/or decisions that have a value of $2403 per hour! Just this fact alone should make you run from the copy machine as fast as you can.
Analyze how you spend your time. I have participated in Dan Sullivan's Strategic Coach program for the last eight years. As part of the program, I completed a form called the "Activity Inventory." With this inventory, I tracked my time and activities in 30-minute increments for a couple of weeks. While I knew I had some underutilized -- and wasted -- time, I was shocked to see that 60% of my time was being sucked up by trivial and unproductive work.
Prioritize your list by importance to your business. Once you have analyzed how you spend your time, work to reprioritize and delegate the tasks that are trivial and unproductive. Easier said than done. I discovered I had the most success when I delegated or eliminated two to three tasks per month. Having a systematic delegation plan is the best approach.
It takes longer to get yourself to working on your business, but you will have better cumulative long-term results. When you look at each task, ask yourself what hourly rate you would pay someone else to perform the same task.
Time really is money. The sooner you begin working on your business, the sooner you'll profit from the planning you've allowed yourself the time to do.