Many entrepreneurial businesses start with just one person-the entrepreneur. In the initial stages of a solo practice, the business owner fulfills all of the business functions.
The metaphorical "wearer of all hats," a solo business owner is the executive decision maker, the manager, the expert and producer, the rainmaker (and sometimes, the accountant, receptionist, lackey, chief cook and bottle washer). When an entrepreneurial firm grows beyond two people, a new consideration arises: organizational structure.
Generally speaking, there are two key areas to consider when evaluating the definition of your organizational structure. The first is what you will focus on and the second is the definition of duties and responsibilities among your team.
DIVIDE AND CONQUER
A firm of one to three people has little structure. Communication is simple, and tasks are easily divided. As a firm grows and determines that more people are needed, employees are often hired, with a "little-of-this and a little-of-that" approach to defining positions.
When we audit a business to evaluate its performance relative to "best practices," we always ask each staff member a simple question: "What one thing could the firm do to improve your ability to perform your job?" Interestingly, the answer I receive about 80% of the time is, "I'd like a job description that defines exactly what I'm supposed to do."
When I share this with firm owners and managers, they are often bewildered. The question arises: How can someone who has been doing a job for some time ask for clarification about what their job is?
Often, we see firms with staff members performing duties horizontally (everyone does a little bit of everything) rather than vertically (doing those things clearly assigned to them based upon position, skills and need.) How do you divide up labor in a growing business, in order to create positions that work together and form an organized structure?
It can be difficult for a business owner to let go of tasks that he or she has done from the beginning of the business, but in a growing firm work can easily become overwhelming. In order to make a business work most effectively, the entrepreneur needs to focus on his or her areas of greatest capability within the business, or what I like to call your unique abilities.
Identifying those functions that you do that add the greatest value to your business can give you information about what you should be doing each day, and also information about what tasks need to be distributed into the job descriptions of other employees. In order to leverage your time and talent better in your business, you must define what your unique abilities are and create a model that allows you to spend most of your time on these activities. Our simple formula for measuring your success: The more successful you become, the fewer things you will do.
SORT IT OUT
In order to categorize the tasks that our clients (as an owner and/or producer) perform, we developed a simple sorting tool. As our model, we use the example of a coin sorter that sits on your desk: You drop your pocketful of change in the top, and the sorter divides up the quarters, dimes, nickels and pennies into different "value" categories.
You need to sort your daily tasks in the same way, by their values. Using the change analogy, take an activities inventory. This is a very simple exercise, but it can give you great clarity and focus as you develop a support structure for your firm. Understanding that four quarter tasks equal one dollar and that 10 dime tasks equal the same dollar, we encourage you to focus only on quarter tasks, thereby increasing focus and revenue.
To sort your tasks, take a sheet of paper and divide it into four sections. The first section will be your Quarter Inventory. In the quarter section, list activities that you are best at, enjoy the most and which generate revenue or grow the business in a way that you are uniquely good at. These are your unique abilities, your area of highest value to the firm.
The second section will be your Dime Inventory. Dime activities are activities that you are excellent or good at, but that do not directly generate revenue or grow the business. Since these are not unique abilities, they are potentially activities that can be taken over by other employees, or outsourced to a firm or independent contractor.
Look over this list. For each item in the Dime Inventory, how can that task be delegated to someone else? Can you contract a bookkeeper a few hours a week to do accounting? Can an existing employee take over the task? You may not be able to delegate every task in your Dime Inventory right away, but look for current and future opportunities to limit the dime activities that you do.
The third section will be your Nickel Inventory. Nickel activities are activities or tasks you perform because you have not delegated, do not have someone to delegate to, feel you can do more quickly yourself or think that no one else can do as well as you. These are tasks that can be difficult to give up, but that you must delegate them in order to optimize your time. Make a plan to delegate each item in your nickel inventory.
The fourth section is your Penny Inventory. You can probably guess that you should not be doing any penny activities at all. These are activities that you know are a poor use of your time and steal directly from your ability to focus on higher- level tasks. Yet somehow you still do them, constantly complaining about it in the process.
Penny activities are your highest priority to get rid of. Make a rule that you will train someone or hire someone to do these tasks right away, and create a system that allows you to feel comfortable turning penny tasks over to someone else.
ACT ON IT
Once you have completed your Change Inventory, take an in-depth look at all of the tasks that should ultimately be delegated out. Ask yourself these four questions:
* What is stopping you from doing what you do best?
* How can you get back to doing what you do best?
* What is the likely result of your being able to focus only on your unique abilities?
* What two things can you do in the next 30 days to shift your focus to your unique abilities?
Make a list of action items that you will implement in order to leverage your time and talents better. Prioritize your actions and schedule items that you can accomplish in 30 days, 60 days and 90 days. Remember, implementation is the key to accomplishment, so make the time now to give yourself more time in the future.
The end result of this exercise will be a more efficiently running business, with tasks distributed in a more meaningful way. As an advisory practice owner, your goal should be to continue limiting your tasks as your business grows so that ultimately you have a very narrow busniness focus while retaining a strategic overview of your firm.
Stephanie Bogan is the CEO of Quantuvis Consulting (Stephanie@quantuvis.com). For more information on Human Capital, visit www.quantuvis.com and order part 3 of our Best Practices Study Series: Human Capital Study Findings Report.