How does your role as a business owner differ from that of your employees? Is it that you take greater risks in exchange for a higher income? Is it that every urgent task that’s left unfinished by your colleagues, lands on your desk? Is it that you dedicate your weekends or evenings to handle said tasks?
The founders of successful, growing businesses dedicate most of their time towards developing their companies while entrusting operational tasks to their colleagues. In this article, I will discuss how they identified the factors within their own companies that have prevented them from fully exploiting the growth potential of their company so far.
How many times in the past month have you felt that you had enough time to accomplish everything you wanted? Was it once, 5 times, or all 30 days? Most likely none at all?
The reality is that the majority of owner CEOs face an ongoing scarcity of time. They often find themselves lacking the necessary hours to dedicate to the crucial business development and strategic tasks that are vital to the future of their companies.
It’s quite possible that their available time is also consumed by operational tasks that are connected to running their company. Like many other business owners, you may find yourself predominantly “working in the business,” leaving little room to dedicate the necessary energy to “working on the business” and its development.
Often, the 24 hours of a day come to an end with services and goods delivered, a replacement found for an absent colleague, or an issue resolved with a partner. However, it’s equally likely that the day ends without successfully expanding the production capacity of one of your company’s most successful products or responding to a partner inquiry that could lead to significant order growth.
I recently had a remarkably productive conversation with the owner of a mid-sized trading company, which employs approximately 70 individuals. During our discussion it became clear to me that this individual consistently sets aside sufficient time for the development of the company, while minimizing their involvement in day-to-day operations.
Instead, they dedicate a substantial part of their time to business development and financial negotiations. The company is effectively managed by a carefully selected team of colleagues, and despite the founder’s evolving role, the growth continues dynamically, just as it did before.
The real cost of time devoted to “running the company”
Naturally, the aforementioned business owner didn’t always allocate his time so consciously. He used to work early mornings and during weekends. However, the pivotal moment in his life happened when he realized that pushing his successful and growing company beyond a certain point would require more than just non-stop effort. He understood that having sufficient energy and time to focus on developing the business, rather than solely operating it, was crucial.
I’ve come across companies where this realization arises at an annual revenue threshold of 3-5M EUR. I’ve also encountered successful entrepreneurs who hit this “ceiling” at ~20M EUR in revenue. At this point , they realize that the time and money invested in developing their workforce, and optimizing operations are not mere expenses but also serve as a guarantee to create additional time available to themselves.
We all wish – myself included – we didn’t need to go over documents and letters over and over again. Instead picture having one or two competent individuals on our team who can ensure materials, goods and services are delivered with high quality and it is enough for you to just quickly review the work.
This level of operational efficiency can only be attained through conscious development, commitment, and strategic investment. A professional corporate environment can become a reality by seizing business development opportunities swiftly and converting them into real company value.
The greatest drains on your time.
To take the first step towards addressing the above challenges, it’s crucial to recognize the everyday phenomena within your business that can disrupt a company owner’s time management. Below, I have collected some of these factors that often become routine for owners over time.
- In organizations with 15-20 employees or more, the lack of time for leaders can be attributed to inadequate task delegation, vague definitions of responsibilities associated with each position, and the incompetence of colleagues occupying those positions. Throughout my 20 years of experience, I have yet to encounter a leader who effectively manages a well-organized and carefully selected team yet still finds themselves needing to work nights or weekends.
During a SmartLeap workshop, it is not uncommon to find that all or most members of an overwhelmed management team are not in appropriate roles. If you are genuinely committed to improving your time management as a leader-owner, I strongly recommend evaluating your direct colleagues. Remember, if your subordinates are unable to fully carry out their own tasks, the unresolved issues will inevitably land on your desk.
- Recently, I have come across another noteworthy scenario in two different companies: both owners had teams of 8-10 direct subordinates. This is twice the size that a leader with good management skills can effectively handle. While you have undoubtedly built a successful business in recent years and have outstanding abilities in various areas, it’s important to acknowledge that you cannot do everything.
As a general guideline, I consider seven subordinates to be the upper limit (which remains manageable in operational situations), but when it comes to intensive growth, a smaller number would be more appropriate.
- Another phenomenon that often presents itself is when the owner feels the need to personally approve every contract, invoice, or agreement, be present for every production line repair, and ultimately maintain direct control over everything. This occurrence is so prevalent that I coined a term for it: CDWA, short for “Collecting Data by Walking Around”.
There are numerous factors that contribute to this behavior, including issues of trust, the competence of colleagues, and the ability to let go of hands-on control.
These are crucial to address during the development process, as their primary impact is impeding progress. As long as the owner is involved in everything, whether justified or not, it is impossible for them to tackle strategic matters that are vital for the company’s growth and success.
The first step towards creating “owner’s time”
Based on the above, it becomes evident that as an owner, you have the opportunity to allocate more time to the crucial activities needed for your company’s development by establishing solid organizational foundations and addressing any deficiencies related to specific positions.
To initiate this process, create an organizational chart that outlines the structure of your company, particularly at the level of your direct subordinates. Determine how your business can operate most efficiently. Identify the various functional areas and departments. Who should directly report to the CEO? At this stage we are focusing on the organizational units rather than specific names.
Once you have this chart, assign the names of individuals who are currently best suited to fulfill each role within the units. It is often during this exercise that the owner-CEOs realize that they are personally overseeing the leadership of numerous areas, despite having managers assigned to those roles.
This step allows you to gain clarity on the existing organizational structure and pinpoint areas where you may be shouldering more responsibility than necessary.
For the final step, evaluate your colleagues using a “+” or “-” sign to assess their suitabilty for their positions. By completing this exercise, you will achieve two important outcomes: first, you will gain insight into the ideal structure that would be effective for your company (identifying the right “places”); second, you will determine whether your current employees are the right fit for these positions (identifying the right “people”).
At this point, you have created an opportunity for decision-making; you can now see the current state of your company and your own position more clearly. If this evaluation reveals shortcomings, it will be necessary to take action and move forward by implementing changes.
This process empowers you to make informed decisions about your organizational structure and staff, enabling you to optimize your company’s operations and create a more efficient and effective framework for growth.
