Here is How To Delegate Authority Effectively For Business Success
By Ron Brock and Dave Gilreath
To Delegate Authority is a major key in Building and sustaining a successful business and it can be challenging. Still, when you consider all the other challenges that come with managing a company or business, there’s only one way to make sure they’re all addressed effectively: Don’t try to do everything yourself.
If there’s one thing we’ve learned since starting our firm, it’s that delegating authority and discretion to employees works. Problems are solved more quickly and thoroughly, allowing us more time to deal with other matters, such as marketing and the firm’s general direction.
To make delegation work, an organization must have a culture that prizes trust above all else. If you’ve decided someone is the right person for a job, you have to trust them; you must give them the freedom to do things the way they want. Of course, we offer guidance here and there, but overall, many decisions are up to the staff. They’re the ones who must deal with the day-to-day consequences if something is broken, so it’s only appropriate that they be the ones to fix it; it’s their baby. You just can’t micromanage and be effective. Control freaks are never respected; they erode trust and sap motivation.
A good example was when we changed IT providers recently. It’s hard to make a change in this area because you come to rely on this software or that hardware. As owners, we’d become accustomed to dealing with the same provider for many years. Staffers tend to have a fresh perspective, and that was the case here. We delegated this decision and ended up with a good provider–a solid one with enough size to assure responsiveness.
For delegation to work, it must be backed up by the right organizational values, including:
- Hiring carefully. A key reason we feel comfortable delegating authority is that we hire people with this in mind, making hiring decisions all the more important. To paraphrase Shakespeare, a company is a stage, and the men and women who work, players. In running a company, you’re like the director of a play. You must cast the parts (the jobs) correctly; hires must be well-suited for the roles they’re to play. We hire slowly to make sure they’re a good fit, and we usually fire fast. If something’s not working out, you need to take care of this quickly. Otherwise, your staff is perennially populated by non-performers.
- Communication. The most important thing between co-workers is clear communication. You can’t over-communicate. We re-iterate the important points–day in, day out. When things matter most, we dispense with emails and talk on the phone or, when possible, face to face. This may be old school, but it’s more effective because e-mails can be misconstrued and don’t allow immediate feedback.
This is especially true when trying to resolve conflicts. When we get wind of a conflict between staffers, we get everyone together in a room and address the situation, cutting through differences to get them to agree or, at least, compromise. This can be uncomfortable—some will back down, requiring us to draw out differences—but it usually works.
With clients, regular communication should include showing or reminding them of what a good job you’re doing for them. We’re certainly not above thumping our chests. Indeed, this is often necessary to make sure that clients, who may have heard the boasts of a competitor, have a fully informed basis for comparison.
- Creating motivation. It’s important to maintain a work environment that’s conducive to motivation so people don’t dread coming to work or feel they have to look over their shoulders. This means giving people the freedom to do their work and interact with co-workers toward goals. To be motivated, employees must feel comfortable and this is often achieved by an informal environment. A great example of this can be found in our company, As business partners, they frequently wander into each other’s office with the greeting,
“Hey, I’ve got a stupid idea here and want to see what you think.”
One thing that confers comfort is having compassion as employers when special needs arise, such as family crises—instead of sticking to the handbook on personal days. Employees always remember employers’ expressions of compassion, so this is instrumental in building trust and motivation. Atop salaries, we offer incentive compensation—and this is essential. But no less important to employees is knowing that you’ll be there for them, especially in difficult personal times.
- Creating a comfortable work environment. This pays dividends on a number of levels. One is that this helps us bring in good people in what we could call chain hiring. We hired a guy from a large brokerage five or six years ago, and since then, most of the people we’ve hired since then have come from the same firm because they’ve learned about our work environment from their former colleagues.
We have a pool table, a shuffleboard table (the scene of friendly tournaments), and we always have soup available in the kitchen–which creates a nexus for productive chats (especially in the winter, when it’s too cold to go out for lunch), and we have a casual-dress office.
These values are highly attractive to people who prefer not to work in a rigid, sterile, by-the-book environment. Feeling it’s a burden to come to work can wear people down over the years. Looking forward to work can build them up.
Ron Brock and David Sheaff Gilreath founded Sheaff Brock, an Indianapolis-based investment management firm, in 2001 with about $60 million in assets under management. The SEC Registered Investment Advisor firm now has 30 employees, does business nationwide and was managing approximately $1.0 billion in assets as of the end of 2017.
The two partners share responsibility for setting investment policy, allocating assets and selecting securities for the firm’s managed portfolios. Brock has more than 30 years of experience in the financial services industry, starting with Prudential Bache Securities and later with Morgan Stanley/Dean Witter. Gilreath, a Certified Financial Planner, has more than 35 years of industry experience, beginning with Bache Halsey Stuart Shields and later with Morgan Stanley/Dean Witter. He is a columnist for ABCnews.com.