Cheryl, a business coaching client, ran a $1.5 million per year glass company. She worked hard, typically 70 hours a week, and she was scared to death to empower her team to "own" functions and responsibilities within the business.
"David," she said, "I've tried that before. I delegated to my team and asked them to run their respective areas of the business, and after 6 months my business was a mess. Sure we had grown, but our margins had shrunk, customers weren't happy, and I hated the stress of waiting to see what would go wrong next."
In Cheryl's world, the reason her experiment with "empowerment" didn't work was because she gave up control and her team just wasn't capable enough to do things as well as she could.
So her solution was to just grab back the reins and take charge of the company in a firm manner.
And it worked, to a degree. She improved her margins and grew her profits. But then she hit a plateau where she was stuck--for several years. What was worse, she was working harder than ever, stretched thin and unable to even think about growing any more for fear of things coming crashing down again.
What had she missed? Was it really a choice between "stay in tight control of everything but accept long hours, heavy stress, and a ceiling on your growth" or "delegate responsibility but know that something bad will happen"?
What Cheryl didn't understand is that the problem wasn't that she let go of control, but rather, the real problems her company suffered were a direct result of how she let go of control.
She merely handed control over a team member, with no way for the business to make sure that the staff member she delegated authority too was doing a great job. And when things went wrong, she reverted back to that traditional owner-reliant mode of running her business.
She had set up a false dilemma. You don't need to be in control; you need your business to be in control.
What's the difference? When you are in control, you need to be present daily to exercise that control. When your business is in control, it operates with a solid foundation of systems, processes, and procedures to address the business's needs, not just your fears and limitations as the owner.
Controls are the intelligent processes, procedures, and safeguards that protect your company from uninformed or inappropriate decisions or actions by any team member.
When you build a business versus a job, you want your team to have the authority to get tasks done without running everything past you. You need them to exercise their judgment and use their discretion.
But you also need to empower them with the feedback, ground rules, and double checks they need to do their best work. This is where business controls come into play.
Building strong internal controls is not about you, the business owner, being in control, but rather enhancing and giving control to your business. The best controls make the default behavior the right behavior. And they empower your team to get better results with less effort by giving them immediate feedback and a more defined playing field.
Controls are not about you being a traffic cop hiding in the bushes to leap out and give an unwary team member a speeding ticket, rather, you want your controls to be more like a speedometer or cruise control system that helps individual team members autonomously do better work. Your controls, which are really just a specialized subset of your business systems, help your team members do better work.
Further, good controls also empower your managers and leaders with immediately clear and actionable information on how to coach and redirect your team, by letting them know what's going on in an area at any given moment.
In fact, this was one of the biggest reason Cheryl got into such trouble when she simply handed authority over to her team. She didn't realize that letting go of control wasn't an on/off switch--let go completely; stay in control completely--rather it was a dimmer with which she needed to progressively ease ownership of functions to her staff, with each key function with a structure of system and controls to it.
She had no feedback process to let her business, including the individual performing the work, her managers supervising the work, and her as the C-suite leader supervising her managers, know if things were being done the right way, at the right time, getting the right result.
Had she had better controls and structured systems, and eased her delegation of authority and control over to her team in a more intentional and strategic way, she would have avoided most of the chaos and expensive mistakes that her business suffered when she ceded control.
If you want to learn more about how to systematize your company and introduce sound internal controls, I'm about to teach a new webinar that will focus in large part how you can do both so you build a scalable business.
If you'd like to join me on this special webinar training, please just click here to learn the details and to register. (It's free.)