This article originally appeared on Forbes.com.
“To grow, or not to grow?”
If Hamlet had been an entrepreneur in the 21st century instead of the prince of Denmark in the Middle Ages, this question would have been on his mind.
One reason many small businesses remain small is that owners choose to keep their organizations owner-led and owner-executed, meaning they continue to handle a lot of day-to-day operations and remain the sole managerial decision maker in their organization. While this approach is most comfortable for many business owners, it impedes growth and can damage the value of the business.
Last year was a banner year for my company. Profits were up, people were excited and we were closing a lot of new business with increasingly larger clients. My business partner and I were working 70-hour weeks, but our company was healthy. And yet, something was different with this new growth. What had always driven our success in the past (us) was currently holding our company back. If we were going to continue to grow, which meant keeping our employees engaged and customers satisfied, we had to start adding professional management to do the things that we had done in the past. We had to consider the value we brought to the business and focus on eliminating the activities that didn’t drive that value. We had to grow as leaders and make the scary transition from owner-led/owner-executed to owner-led/professionally-executed.
We knew this transition would feel like a loss of control and would require a hefty time and cash investment without the guarantee of success. It wasn’t easy. However, our decision has allowed us to mitigate risk, as key dependencies are spread among multiple people. If we were hit by the proverbial bus, we’re more confident that our business would not only survive; it would remain valuable.
How did we do it? We hired a few key professionals who had more experience than us in several aspects of our business. We appointed leadership to the strategy side of our company and we promoted the strongest leader in our creative department into an official leadership and management role. Then, we stepped back and we gave all of them as much support as we knew how.
The difference has been astonishing, and there have been some important lessons in this transition that I wish we had known in advance and prepared for.
- It’s going to take a LOT of cash. When we started hiring people to do the things that we had previously done for the company, a few things started to happen. We wondered if we could find someone as good as we were to do the work. We did, and we were blown away at how much they cost. As a business owner, what salary would you require to do what you do for your company if someone was hiring you? How much would someone better than you demand? When we shifted our thinking this way, we realized that what seemed like a lot was actually fair for the market. Furthermore, the people we hired are worth every penny.
- Your personal self-worth will be challenged. If you’re like us, what you do for your company fills you up because it’s something you don’t think many other people can do, especially not as well as you can. When you start to let go of some of these responsibilities, it’s going to feel weird and it will create a void. For example, I was used to always being “the idea man” in front of our clients. Suddenly I had to learn to take a back seat during the sales process and promote others into the spotlight. When they started having more success than I had, we realized the power of having professionals and specialists who can focus on executing specific job roles, as opposed to an owner who wears all the hats.
- There will be confusion. Employees and clients of a small business often get used to going to the owner for the answers and direction. As you start to hire professional managers, it’s important to direct employees to seek advice and guidance from the new leadership. This can feel awkward. But if you are the only one who has the answers for everything, you won’t ever have empowered leaders in your organization who aren’t you.
- You are investing in people and systems before you actually need them. When you start to hire professionals, you are investing in your business. You will be hiring a level of talent to get you to where you want to go, not to satisfy an immediate need. So, the people you hire have to be more advanced than your business is currently, and you are going to be paying for those people and the systems they create before you actually need them.
You are going to doubt your decision. As an owner, with any key decision in our business, I often wonder whether the investments (gambles) I make are going to pay off. I can cite countless investments and initiatives that have failed, yet I know that if we want to scale our business, then I must promote and develop people in our organization.
While at first these challenges proved difficult, after 10 months into this transition, our client satisfaction scores are the highest they have ever been. Employee engagement and development are blazing and our company continues to grow at a healthy pace. My business partner and I have stopped working 70-hour weeks. Making the transition from owner-led/owner-operated to owner-led/professionally-executed hasn’t been easy, but it’s made it more possible for our business to succeed than we ever imagined when we began.