The Delicate Art of Delegating

Delegation is a thorny issue for many bosses who prefer to do the job themselves. But a good leader gets more satisfaction when able to get others to do tasks at expected high standards.

The worst thing a boss can say is "It's going to take me two hours longer to explain this to my employee than if I just do it myself."

Then you justify this to yourself: The quality and standard is better, plus the job is done. But what about the employee? Where is their challenge, their opportunity to grow?

The owner of a teen computer camp shared with me his frustration over his staff and their botched efforts at doing the job. How could he motivate his team to work at, or close to, his level? If the boss had used a little bit of emotional savvy, he would have seen the employee physically deflate, her spirits sinking faster than when the judge told Paris Hilton she had to do time, again.

What this approach to delegating misses is that a few hours of rigorous coaching will save hundreds of hours over the next year, freeing up time for revenue- generating tasks and for taking more responsibility yourself.

A reputation for teaching is gold. Star performers gravitate toward companies that train skills and push them to embrace scary tasks that challenge. Bill Gates, despite his questionable haircuts, set an outstanding performance level for programmers; this itself attracted talent. But Gates was able to balance the creative tension of setting the standard by encouraging the programmers to meet – and overshoot – expectations.

As the boss, your role is to instill the highest standards of performance and adherence to a shared vision of excellence. Only then can you up the ante and really let go. If you are having problems delegating, mull over these three questions:

1. Am I recruiting in the same old places, in the same old way?

I read a business plan for a nail manicure franchise and was astounded by the suggestion to hire university students part time. That's when it hit me that many more people are going to university and ending up in low end jobs. To help their graduates, universities have terrific job posting internet services. The teen tech camp owner hired students from Waterloo's co-op program who were thrilled to work in a tech environment rather than flip burgers (or paint nails).Make it a rule to hire people who are smarter than you. In the interview, talk about the high level of work expected until their eyes pop. The stars will be excited by the expectations, and you don't want the ones who say "no" anyway.

2. Have I really defined my standards?

The process of delegating is as fragile and complex as weaving a spider's web.How are you going to teach your skills and level of expectations? How can you illustrate how the end result should look? How can you make sure employees get the job done – building a web to catch the flies – even if it's not quite how you would have done it yourself? With an early-stage business, such as the teen tech camp, there may not be enough in place to show how to do the job. Asking employees to come up with their role and the end result that they think is expected is one way to build up a training culture.

Another tactic: Don't underestimate the role of storytelling and myths in building the results you expect. For centuries, little children have been told fairytales to prepare them for "real" life. It works. Business magazines are full of tales of how an employee ran through a burning building for their client. Get one of these stories in your culture too.

3. Am I prepared to let go?

Ask yourself this: Do I really step away when I delegate?

Once I've set the standards, do I really let go? Alarm bells should go off if you hear your employees saying, "We know you are just going to change everything we do anyway."

Working with managers and being one myself, my experience is that disasters happen when I have not been clear about the end result and I keep popping my head in randomly, interfering with the process.

My most successful delegation happens when I am forced by a hectic work schedule or other priorities to step away and truly let go. Sometimes, you do need to go to that remote salmon fishing camp in Nova Scotia without internet. Give your employees an interference-free week. You may be surprised.

Private Equity Not All Bad

“I'm part of the big hollowing out of Canada, I'm afraid," an investment banker told me at the tennis club last week, giving me his sad look. "I've been working on the BCE and Alcan deals, which are such a shame for Canada, but I suppose it has to happen." Then he dashed off for his doubles match with a jaunty jog (probably at the thought of his year-end bonus).

Is this hollowing out cause for alarm? What does it mean exactly for Canadian business entrepreneurs? Is this the end of Canada and should all entrepreneurs head for the exits? Not at all.The issue has been raised due to recent high-profile cases involving large American funds spotting a company that has missed business opportunities. These funds believe they can do more with the business than the current management team. The goal is to gain ownership through control of shares, then smarten up the business, and, finally, sell it for a profit.

Pirates, you say?

Maybe – but it's all perfectly legal.

What's not being said is that some Canadian management teams are missing the ball and not operating at a global standard. For some Canadian companies, a shakeup is exactly what is needed. You don't see RIM (the Canuck company that brought you the blessed Blackberry) having Jolly Roger types lurking around. That's because RIM's management team spends a great deal of energy working at what it takes to be a world leader in the wireless communications market – the key word being world.

For Canadian entrepreneurs, there will be a great deal more hollowing out to come, particularly in the smaller manufacturing industries. Letting go is hard to do, but many thoughtful Canadian business owners have grasped the idea that they can venture outside of Canada to set up plants and offices. These entrepreneurs are discovering that there are partners willing to help, such as the smaller private equity fund management teams. Smaller private equity firms, which are currently unfairly tarred with the same brush as larger firms, bring more than cash; they bring a rolodex of international contacts, global skills, and forward-thinking strategy.

Many private equity players already have shared ownership in a variety of manufacturers willing to change. McGregor Socks is such a case: After nearly closing its doors forever, it now has factories in faraway China, knitting up Canadian-designed creations. McGregor's core competencies shifted from manufacturing to design, managing the long supply chain, and keeping up relationships with stores. Besides, why couldn't it be the supplier, using China as a manufacturing base?

It was a private equity fund that supported this vision and put up the capital. The firm already had experience and contacts in China for McGregor. Although it took a great deal of pain for McGregor to make these tough changes, the company's dark days faded, and another excellent Canadian brand survived – and continues to fill store shelves (look for a pair next time you need socks).

By the way, my tennis playing, Master of the Universe, big swinging dick investment banker friend works for a global finance company. Nearly a decade ago, his Canadian finance company sold ownership to foreigners in order to go under their umbrella, with its attractive global brand. Horror of horrors! This finance fellow was part of the hollowing out of Canada! And what has been the result over these past 10 years? Within Canada, this company has experienced stupendous growth, creating many more Canadian jobs with high end salaries, and, at the same time, importing knowledge and the ability to serve a great deal more clients working between countries.

A recent article in The Economist supports this fact – that private equity is actually about adding value to economies rather than moving jobs off to foreign shores. OK, but what about the hollowing out of Canadian culture?

Well, my investment banker friend was apologizing for doing a good job, so that seems pretty darn Canadian to me. But selling out to foreign "pirates," besides adding lots of points on his platinum British Airways card, also brought him (and his staff) an amazing exposure to diverse management and financial practices, and an open-mindedness to global business – not to mention a few extra bucks in every one of his employee's pockets. Don't you think it's time Canadians embraced those points too? Aargh…bring on the pirates.

Are you An Entrepreneur?

Business starts by mucking around in the garage, at the kitchen table or, these days, perhaps on Youtube. When some entrepreneurs discuss their career, though, they often have one lie, “If I had known how hard it would be I would never have started.”

Top entrepreneurs do know, but they do it anyway.It is hugely popular to talk about being an entrepreneur, having your own business, not selling out to the corporate master that sucks your soul.Yet, what separates the winners from the losers? If you want to be an entrepreneur and run your own organization, you may want to answer these questions:

What’s your idea of achievement?

Are you doing the business because you know you’re good and you demand achievement or are you doing it to have a nice lifestyle?Many people really want a 9-5 type of job so they can play in the jazz band on Mondays, go to their kid’s soccer game, volunteer or whatever.That’s absolutely fine and there’s room for that both in organizations and for the self employed. But not at the top.The recent death of Anita Roddick, founder of the Body Shop, reminds me of how her passion for products made without using animal testing and to benefit communities really did drive her business. In the end, her passion brought her money — not the other way around.

Could you do better working for someone else?

Many entrepreneurs with a great set of skills do not get to apply them because they are running around paying bills, writing PR releases, and filing for patents themselves.Engineers can create the best technology that never gets bought by a customer because it is simply too risky to award the project to a small, untested company. They would achieve more by going under the umbrella of a larger business that can protect their inventions with patents and take it to market faster through the sheer power of their brand.

How are you with cash flow?

In your business plan (here’s hoping you’ve got one) you make assumptions about money coming in and flowing out. Like a renovation project for your home, think about the pithy advice, “double the contractor’s estimate of the time and the cost.” That applies to business plans too. Don’t feel sheepish; nearly everyone has to use that formula when starting up their business.Entourage, the HBO show, features Ari Gold, who runs his own agency in Hollywood. Ari is the poster boy for entrepreneurs. He goes home to his wife, who constantly hounds him. “When are you going to make money? You said it would be breaking even by now.” Even as Ari closes a mega deal for his movie star, he still has to wait for the payment, and the cash flow gap is painful for him but entertaining for m3. You do not want to sweat into your favourite suit the way Ari does, nor do you want your spouse spitting mad at you. When you walk away from the $100,000 job, cash does become king.

Are you doing this for your ego?

Many top entrepreneurs put in seven days a week for 20 - 30 years in mundane businesses ignored by the media. The book The Millionaire Next Door researched the profile of these self-made business people, confirming that most were not in a glamorous industry such as Porter Airlines with their fabulous Pink Tartan designer uniforms adored by the media.

Does money matter?

Yes it does. You must charge for your work as you need to pay the bills. Otherwise you are not an entrepreneur, you are playing. The toughest skill is to convince someone to put their hand in their pocket and hand money to you. There are many government and business people who never experience doing this and underestimate how hard it is to achieve. Top entrepreneurs get clients to pay again and again for more and more.

Canada depends on entrepreneurs with passion (craziness) who put aside their predictable salary and 9-5 job to hire others and see if they can throw their lot into the global fray.

Let’s give entrepreneurs some respect.

Escape the Tag of Small Business

Small is never a good word to use with the male of the species, unless you are Steve Jobs announcing another Ipod.

Words do count.

Sensitivity around words is why “Developing Country” became the phrase to use rather than poor country. Small Business needs a similar re-branding because it just gets worse with terms like “micro-lending” (code for lending to females). Next on offer could be “teensy-weensy lending” or “children-around-her-ankles lending.”

A big mistake owners make is to allow the “Small Business” tag to box in their ideas to two years ahead, max. Have you noticed how sheepish owners become when describing their big dream if their office is their basement and there is one employee? What they need to say is why their product or service is staggeringly different from all the others. They should say it boldly and often to their customers, their families and that one employee, and soon it will become the DNA of their business. They should also keep in mind that many an extraordinary business began at the kitchen table, Martha Stewart and Body Shop being two obvious examples. Here in Canada, there’s Victoria Sopik who created Kids & Company childcare, now a national company, and the three parents in Kelowna who started Club Penguin and sold it to Disney for $350 million (that’s right, million. Say it again with an Austin Powers accent.)

Ralph Lipschitz started with a line of ties but he talked the big dream even to his first customers. He described ‘aspirational’ living; he sold the Ivy League lifestyle and the lift from this original concept has carried for 40 years. The woman or man buying a product from Lipschitz’s company instinctively knows that it hints at an aura of old money.

Ironically, although Lipschitz was from a poor neighbourhood (also Calvin Klein’s old hood) he had a soul of refined living which emerged through his brand – Ralph Lauren. Even as a teenager, Ralph drew comments about his choice of expensive suits. He had passion and took that to get inside the heads of his most desirable customers, the Ivy Leaguers. What would encourage them to spend money? A shirt that looked as though it had seen the rugby fields of Eaton?

You bet.

Under what brand name, Lipschitz or Lauren? Ralph got over his own origins and was never sheepish about his vision. All Small Business owners need a daily dose of Ralph’s chutzpah!

The big vision and the nails down the blackboard, excruciating attention to detail are what separate the winners from the losers. Ralph Lauren excelled at both. If you check out the movies of Robert Redford, you might suspect that Ralph was a serious stalker because there’s the Ralph Lauren catalogue: The Way We Were – Robert unattainable in the Ralph Lauren Ivy League line; Butch Cassidy and the Sundance Kid – Redford all manly in Ralph’s Chaps casual jeans and cowboy boots.

It’s as if Ralph were a lepidopterist, capturing Robert Redford in his net and pinning him like a butterfly under his magnifying glass. All the details involved in the different seasons and places of the wealthy and beautiful in these movies were transferred by Ralph Lauren into accessible products. Now suddenly, you no longer need your own grandfather, complete with Boston pedigree, in order to have the perfect cashmere sweater made in Scotland. You can buy it from Ralph Lauren and, as a bonus, it does not come with that annoying mothball smell. Now the great unwashed masses can choose to adopt the Harvard look and play dress up, blend the educational classes and cross the cultural divide, just as Ralph Lipschitz did. And, boy, did the customers buy the big dream!

Take a leaf out of Lipschitz’s book. You are not just a small business (with one line of ties), you are so much more.

Green Does Not Make It At The Till

Were you to count the copies of Naomi Klein’s book No Logo that sold globally, you would think that millions of consumers would be switching to green’s top values – curb your consumerism and if you have to buy, shop green. It’s easy to paint business as the only anti-green boogieman but surely the government (municipal, provincial, and federal) also plays a role. Must government only set rules, impose carbon taxes, freak out oil investors, and make doing business generally more difficult?

Part of being green is caring for the environment and for indigenous people. Tsonga Shoes became “green” and manufactures in an 80%-unemployment-riddled area of South Africa. On-site childcare and educational facilities were established in order to encourage the mostly female workers to create micro businesses and sell their shoes to Tsonga for a living wage. It was working well until, as all manufacturers around the world are discovering, consumers started responding to cheaper goods from China.

Tsonga management visited China to look into combining manufacturing locations and were astounded by their discoveries. The massive, half-empty shoe factory they visited had marble floors. Stunned, they asked the manager how he had raised the capital to build such a place. He told them the Chinese government had paid for the factory. Workers came from hundreds of miles away and stayed in dormitories for stretches of up to a year.

“How can we compete?” asks Russell Lindsey, CEO of Tsonga. “We can put a story about our Zulu shoemaker and her child in each shoebox, but ultimately, the consumer won’t buy Tsonga if cheaper shoes are available.”

Indeed. Are those No Logo readers in fact rejecting Wal-Mart’s cheap goods for Bono’s sustainable (but pricier) line EDUN. We seem to have ADHD consumers this side of the world who, once they enter a store, ignore Naomi’s advice and stampede for the latest lead-painted Barbies from WTO members, such as China.

How does our government help our businesses compete and how do we reconcile the fact that green is difficult to achieve when competing with China’s support of their own manufacturers?Our government talks of Toronto following London’s traffic access restrictions. A good idea for London, but Toronto has much fewer travel options in its infrastructure and few trains to link our cities. Indeed, our transportation seems to be planned by Monty Python with Hamilton’s train track from Toronto stopping 16km away from the city, while other trains pass through without stopping. A functional train for passengers between Hamilton and Toronto would reduce a wretched two-hour trek to 30 minutes.

Attractive enough to leave the car behind – you bet!Instead, our government’s priority is the bun fight about inter-provincial transfers.

It’s hard to believe that Canada is one country. And who suffers? Entrepreneurs. With so much inter-provincial paperwork, it’s death by a thousand cuts. Take a lesson from business: Centralized IT departments charged each division service fees so as to share costs. In reality, however, division heads ended up arguing so much about the fairness of the system they eventually turned to outside IT companies to get the job done. Outsourcing became the norm and boomed.

Perhaps we could outsource government action for basic transportation services because there is more argument about payment for services than green action. Indeed, it’s time for the government to create joint public-private partnerships with green as the goal.

Canadians balk at these sorts of private-public partnerships despite their success in other countries. Mike Harris’ Superbuild project demonstrated how business backs a project if the government provides initial financial support. When ROM received a $30M commitment from Superbuild, Frank Potter, chairman of ROM’s fundraising arm, said, "This lead investment from the Ontario government will be leveraged many times over by the private sector.” Potter’s words were prophetic as the private sector followed the government, contributing the bulk of cash and project stamina.Let’s go beyond idealism and get down to action.