Don’t just delegate. Empower your employees!

Don’t just delegate. Empower your employees!

Many business owners understand that getting a capable team of professional employees is one of the main ingredients required to scale-up their businesses. Well, hiring such employees is the easier part. The part which family businesses find hard is making the capable ones stick around with the organization and deliver results.

Today, I want to use a real case to discuss one of the most common problems that frustrates competent professional employees when they join family-owned businesses. Is the same problem occurring in your business right now? Read on.

Mr Alok Agarwal (name & business changed) runs a successful electrical manufacturing business which has grown manifold during last 5 years. Mr Agarwal is clear about his business vision and strategy. He has put some of his family members in key positions besides hiring professionals.

A month back, Mr Agarwal hired a capable professional Chief Operation Officer (COO) to run the company so that he can get free from day-to-day operational responsibilities and devote his major time to business growth. However, when his newly appointed COO took any new initiative such as introducing a new system or procedure, some of the family members of Mr Agarwal and old serving employees resisted the change. They often sabotaged the COO’s initiatives by influencing Mr Agarwal to intervene which made the COO demotivated and frustrated.

Though Mr Agarwal had a sincere desire that COO should be successful in the organization, he had not given him requisite decision-making freedom. Similarly, at the time of joining of COO, the reporting relationship was not clearly spelled out thereby allowing some family members and a few old serving employees to approach Mr. Agarwal directly with issues. In short, Mr Agarwal had delegated operational responsibilities to the COO but had not empowered him with decision making freedom & authority.

Most business owners of SMEs would agree that to scale-up they should sooner than later need to get a capable team of professionals onboard the organization. But at the same time, many of them refrain from giving operational freedom and decision-making authority once they hire professionals. In my opinion, these are contradictory goals as any professional wouldn’t be able to contribute to business growth with their hands tied (i.e. no freedom and authority).

I think that one of the main reasons business owners retain the decision making authority with them is because they fear the professional manager will deviate from vision or make existing things worse. However, retaining the decision making authority often leads to business owner becoming the bottleneck of his business as well as frustrate a capable professional manager. A more effective way to ensure that the employee delivers positive results is by setting strong feedback and performance management mechanisms.

Coming back to our case, we helped Mr Agarwal to see the cause of the problem and then advised him to set clear expectations about the role of the COO along with granting requisite authority required to effectively carry out that role. A reporting structure was also created and announced in the organization. Further, we helped Mr Agarwal bring discipline in his working style which included regular status, performance and feedback reviews with his COO and other key employees. These changes enabled Mr Agarwal to stop entertaining his relatives and old serving employees on areas for which he was no longer primarily responsible as well as give the COO much needed operational freedom.

After reading this article, does a capable employee (like the COO in the above case) who is being given responsibility without any real authority come to your mind? If yes, what do you think could be done about it?

Please let me know you thoughts by commenting below.

Thanks to Chitaranjan Gupta & Anand Patil for their valuable feedback.

Disclaimer: Component images used were found using filter ‘free to use or share’ in Google. Original Superman drawing by Alex Ross. All rights belong to respective owners.

Comments

  • Family members and old employees creating issues for capable people is indeed a very common problem in family businesses in India.

    Aakash KulkarniAugust 14, 2013
  • Deepak Ji, I agree to this articles as I have seen systems failing at my clients end mainly because of delegation without authority. In fact, your education series is an eye opener for a business owner who is serious about scalability in his business

    Amit Samani, Practising Company SecretaryAugust 14, 2013
  • Deepakji your article addresses the root cause of many small and medium companies who get stuck in such vicious management circle. It reveals a major drawback of the Leadership. I have come across many companies who despite they having a system, they tend to fail on account of poor Leadership quality.

    Kailash Ashar, Principal Thought LeaderAugust 16, 2013
  • Pertinent points raised in your article – these are burning realities in most family run enterprises.

    These issues exist even in mid & large corporations with varying degress.

    I wish to elicit the reasons for this malady – which in my view could be:

    1. the fear of letting go off the power to control
    2. the fear of failure
    3. individual ego

    The anology of agricultural land being let out is a good example of real empowerment wherein the land owner necessarily refrains from interference as it involves toiling in the field – the paralells may be inferred on merit.

    Regards

    Deepak Prahlad Agarwal

    PS: The views expressed are purely personal & have no resemblance to any individual, group or organization.

    Deepak Prahlad AgarwalAugust 16, 2013
  • thanks for another write up it is very good to have it .i think COO should have all the power ( operating +financial ) with out that he or she can not take good decision towards the co.he can always discus the imp matters with owner or MD then he or she will exicut the order or any new thing to be implimented . so their will not be any second thought for that matter .i practicallt does that in my co so their will not any problem to me or to a staff or higher management .

    DR SUNIL JOSHI CEO ALLIANCE HOSPITALAugust 16, 2013
  • All your articles including the present one touch the key issues an organisation could face.It also gives the solutions to it.

    Seema RautAugust 17, 2013

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