Why Delegate?

Let's start with the axioms:

  • Value (cash) is obtained from a business when it is transferred.

  • The cycle from the entrepreneur beginning the business to establishing a stable business capable of generating maximum value to the owner is the transition from an owner who is a doer (essential) to an owner who is a manager (replaceable).

  • To get maximum value, the owner-manager cannot be an essential part of the business when it transfers.

  • An owner-manager of a business must be able to delegate or the owner-manager will not receive maximum value for the business interest when it transfers.

  • Transfer of a business could occur at any time upon the occurrence of certain contingencies (such as the death of the owner-manager).

A test question for the owner-manager: what do you do in a crisis? Do you say, “I have to get more involved;” or do you say, “I have to review what my employees are doing.” If you are not delegating, the first answer will be your answer.

If you are not delegating, the reason is control. Delegation scares owner-managers (usually entrepreneurs – the primary doers) because they have not learned how to measure performance and review employees. The reality is that learning how to measure performance and review employees is not easy, but it is a skill set that most entrepreneurs can learn with desire and application. The fear of losing control keeps owner-managers from learning how to measure performance and review employees.