How can a company grow (and thrive) without its founder at the helm, actively involved in the day to day operations of the business?
According to Scott Fritz, serial entrepreneur, investor, business mentor and coach, and author of the 40 Hour Work Year, the key to a company’s success and profitability actually depends on the founder’s will and ability to get out of the way.
In fact, Scott insists that the less involved you are in the day to day operations and decision making processes of the company, the higher the company’s productivity and ultimate valuation will be.
But of course, Rome wasn’t built in a day and neither is a successful, scalable venture. Scott walks us through his decision making and process building methods, and outlines what it takes for a successful entrepreneur to go from what he calls “being in the business” to “being on the business.”
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First Things First: The Art of the Focus Filter
So how does a busy and in demand investor, mentor, and entrepreneur decide who to work with? Very carefully. Before even looking at a pitch deck or listening to a proposal, Scott asks himself a very basic and fundamental question: will this bring me joy?
This isn’t the KonMari method for business; it’s the first of three dealmakers (or breakers) that Scott considers before agreeing to take on an investment or coaching relationship:
The concept of joy, especially in business, is defined differently for everyone but here are some of the questions to ask in order to figure it out for yourself:
- Am I going to enjoy what I’m doing?
- Is this something I’m going to get value out of?
- Will we enjoy working together?
- Is it compatible with my quality of life?
There are many long days, weeks, months, and years before many entrepreneurs reach the 40 hour work year, so choose wisely.
- Make money – decide what your value is and how to price it, and then insist on getting paid
- (Actually) do deals – once the joy and money factor have been locked down, Scott looks at the viability of the deal. Is there an actionable plan in place to move forward?
First, stop thinking of yourself as a boss and start thinking more like a mentor and coach. What are the areas you think you’re the strongest in and how can you build on those strengths? How can you empower your teams to take ownership of their roles and invest their creativity and best efforts? (Hint: reward generously and often).
The Ownership Paradox and the Road to the 40 Hour Work Year
In order to go from employee to owner (in mindset as well as practice), you have to be able to put distance between yourself and the business, and trust that your team is competent and capable of doing it without your daily involvement.
So here’s how Scott breaks down some of his own 40 hour work year:
- About an hour to 90 minutes every month reviewing strategy and essential KPIs
- Two days of executive team meetings every year to create what he calls the operating strategic plan, set the top five priorities for the coming year, develop content, go over budgets and forecasts, and conceive the company’s “white paper pitches” on new services and programs for the coming year
- A day at headquarters meeting with partners, going over the top five priorities and benchmarks from the previous year, and meeting new hires
Tips and Tricks for Getting to the 40 Hour Work Year
As Scott points out, thinking small will keep you small. When setting out to transition himself from an active to a passive role, Scott created another list of critical questions:
- Is this doable in 18 months?
- Are the sales teams and systems solidly in place and running smoothly?
- Do you have a right hand that can steer the ship without you for three months or longer?
- Do you have an executive team of at least four to six key people that can oversee the rest of the company and report to the COO?
The Decision Matrix
How do you decide how to prioritize the decision making process in order to successfully transition responsibility to your leadership team when the time comes? Create a list of line items that detail key decisions that need to be made at different intervals, from weekly to yearly.
Ready to Delegate? Start with Your SOPs
Knowing how and when to delegate can be one of the biggest challenges for an entrepreneur. Making the transition from wearing all the hats and making all the decisions to ceding control to a second in command or a team can be difficult, but it’s one of the most important (and necessary) steps a company owner will take. From hiring vendors to signing checks, if you’re involved in the day to day, you’re in the way.
But like any difficult business decision and procedure, the proof is in the process. In order to know how (and to whom) to delegate, take a look at your existing SOPs (standard operating procedures). Pro tip: if your company has been lax in documenting standard operating procedures on a departmental or organizational level up to this point, this is a great time to see who is doing what, how they’re doing it, and what percentage of their time and resources are being allocated to certain tasks.
This can be as simple as a spreadsheet that tracks every department head’s responsibilities and how much time they’re spending on each task This helps with documenting process, creating and refining your SOPs, and identifying inefficiencies.
The last thing you want is for people to spend a significant amount of their time and company resources on menial and tedious tasks that can be systematized or automated. More time equals more opportunities to be creative, and for employees to actually engage with the business in a meaningful way, adding value to everything from your products and services to the customer experience.
Build a Culture of Intrapreneurs
It’s a topic that will come up countless times in any serious conversation about growing and scaling a company, but the key to revving and keeping the engine running comes down to your talent pipeline. Hiring and retaining good people is one thing; getting them to deliver value is another. That’s where your “intrapreneurs” come in.
“When your organization reaches a certain critical mass and you hire the right people, the last thing they want is to be micromanaged. Good people need to feel challenged and the freedom to be creative,” says Scott.
At the end of the day, there’s no silver bullet and success is a cumulative process. To reach your own version of the 40 hour work year, start with an actionable plan to transition yourself out of the business, and strategically hand over the reigns to the right people.