10 Things to Get Your Company to Run (better) Without You
Why did you start your own company?
Were you sick of working for idiots, or you thought you could do it better? Did you think you could make more money? Or the big one: you wanted to "be your own boss", have more control and time in your life?
My favorite author on this subject is Michael Gerber who wrote E-Myth. He points out one of the best "entrepreneurial myths" of starting your own company. You start the company, but have a new boss, he's maniacal, with you 24/7, he can be a real bastard, is unrelenting and tough to the point of being unfair. The new boss is, of course, yourself. For many, this is difficult to deal with and overcome.
You're the owner, why not take advantage of it?
There are plenty of burdens to owning your own company. You're personally responsible for the finances, its success/failure, the big clients, security issues, all the stupid government rules and regulations/taxes and of course, your employees. All of this can be both overwhelming and exhilarating. BUT why not take take advantage of this position to create a better life for yourself? Why don't you work less hours? Why aren't you doing more of the things you like to do, and less of the crap you hate? Why not travel the world, work from the beach or while skiing all day?
All of this is possible if you institute a few small but challenging changes. I promise if you follow my advice you'll be able to change your life and get the dream, which is to own your own business AND have a life.
My story - I never work more than 35 hours a week.
It's the same old story. I used to run a business that dominated my life, made me unhealthy, ate into my marriage... blah, blah, blah. Then a great thing happened, it failed, ouch! When I started my second company I set some basic rules up front, then developed a system, that over the last 14 years that has enabled me to make great money but kept ME running my business, NOT my business running me. If you're interested, my second company has 40 employees, sells more than 50,000 products a year in 50 countries and 80% of all employees work virtually and in 13 years not one employee quit the company. We are the most appreciated and respected brand in our industry segment. In addition to that company, I've since started and run three more companies. And, yes, I never work more than 35 hours a week.
Without further ado, here are the 10 things that will get your company running and thriving without you.
• Save money, personally.
• Hire Adults.
• Results based work.
• Empower and let your team operate without you.
• Flip the 80/20 to 20/80.
• Limit your hours.
• Use the Golden Rule.
• Make a commitment to be efficient using technology.
• Remove urgent/time/deadline driven tasks.
• Get Big Enough to Hire $100k Qualified Professionals.
1) Save Money, Personally
So simple, so difficult, so important.
The only way you can have peace and make decisions that are best for yourself and your family is to save money in your bank account (not your companies'). Having money in your company bank account OR relying on the potential enterprise value of your company is NOT real money. Saving money may feel daunting, but it's necessary and you owe it to yourself and your family to make it happen.
At a minimum you need six months of expenses saved to feel real freedom. Many of the things I outline below take time, and time is only an option if we have a cushion and can pay life expenses while the business is either growing or you're shifting to spending less time in the day to day operations. For me, I will always hire someone to do things I hate or am not good at, which, not coincidentally, are usually the same thing. I do this not from a profit motive but a lifestyle motive. This can eat into profits in the short term, and having money saved to cover expenses in life make this possible. But in my experience these kinds of decisions almost always lead to more profit.
But the real freedom comes when you have at least a year of expenses saved, your house is paid off, and a significant retirement account is building. Once you achieve this, everything changes. You look at every deal, every employee, and every situation differently, because you don't "need" any of them, every ounce of desperation is extinguished. You start making decisions of how you spend your time based on what you want to do. The bottom line is you make better decisions, the "right" decisions.
2) "Hire adults" - People that are Comfortable and Thrive Working on Their Own.
Imagine a 15 year old dog, hair is slightly grey, it moves slowly but when you throw a stick it fetches. This is NOT adult behavior, it's actually puppy behavior. This happens because a domesticated dog is 100% taken care of, and therefore never fully matures into an adult. The same is true for humans and unfortunately there are a lot of people that frankly have not grown up, because they've been catered to their entire lives or they never took full responsibility for themselves. They can be delightful people, just don't hire them!
Of course hiring people is extremely important but I require three things when hiring. 1) Humility: This is most important. A person can be extremely confident and driven but yet still humble about what they don’t know, and always want their work to match their value. This person works hard, accomplishes things, THEN asks for a raise, not before. 2) Thrives working by themselves: The key to building an organization that does well without you, is how much everyone cares when you’re not around. That is the key. I ask a series of questions that target this subject. (more about getting employees to care in the "Golden Rule" section) 3) Mature enough to discuss difficult topics and, don’t take things too personally. I always criticize someone in an interview, like the format of their resume, or anything and see how they respond.
3) Results Based Work.
Stop focusing on the amount of effort and start focusing on the result.
If you've never heard this concept before, it's a real thing. There is a real methodology behind it. You can read about it more here (I have not read this book, but it's the most popular on the subject), but I'll give you the basics and get you on your way. It takes some time getting used to this management style, but once you get the hang of it, it's the ultimate way to surround yourself with productive, independent... and happy teams.
Instead of focusing on when and where someone works, like 8, 10 or 12 hour days, you sit down with each employee/manager and together work out and agree to an equation of how much each person is expected to get done and in what time frame. It includes revenue for sales people, projects or metrics for marketing, and project deadlines for engineers. All discussions from that point on are about either what they have accomplished, or if they are on schedule to accomplish the goals. And much less about how long they worked, how hard they worked, or all the little things they did all day (all those things want to make me puke).
The biggest challenge is calculating how much "results" everyone should produce in certain time periods, but trust me, even in areas you lack expertise (in my case engineering) you will either figure it out over time or you can use trusted managers to help set the expectations.
Here is my favorite example to illustrate my point. Ultimately I'm a sales guy, I love sales and revenue and very strictly use a results based system, and can frequently be heard saying, "no A's for effort". I simply don't care how many emails or voicemails someone sent in an attempt to close a sale, I only care if they got the deal. If you're focused on results or actually reaching an executive to close a sale, you won't send an email every day, or call them 5 times a day. You'll call them before 8:00am or after 5:00pm because THAT is when they answer their phone and are NOT in a meeting. You stop focusing on the effort, and start focusing on the result. It changes how time is spent. It may sound harsh, but quite the opposite is true. For the right people, it's actually liberating and exhilarating only to focus on results.
4) Empower and Let Your Team Operate Without You.
Well, of course! But stick with me for a second. This is actually the hardest one to accomplish, but the next two sections will help you accomplish this technique. There are three reasons managers and owners don't do this well, and all are personality traits. They don't think someone else can do it as well as themselves, they don't have the patience to allow someone to learn something and finally, it takes too long to train someone to do what you do and you "just do it" instead. The best advice I can give for all these, is GET OVER IT, and start letting people do stuff. There are so many books on the subject that I'm not even going to suggest one.
Believe me, I know it's not easy but, I promise, if you hire the right people and use a results based work system, it will pay off in time. One of the keys to letting others do stuff is to understand that because someone does something differently, that doesn't mean it's worse. I've learned over time that allowing someone to process and complete something differently can be really cool and educational for me.
5) Flip the 80/20 to 20/80
This one is easy and is more of a mindset or a goal, and a way to think about moving yourself out of roles. In all the areas of work you do 80% of the job and others do 20%, set a goal to flip that.
Let's use the example of doing design project for an ad. Let's say you're handling all aspects of the project directly; copy, goals, design and budget. Instead you have a meeting at the beginning with the team and discuss everything at a higher level, but set a budget and some basic goals. Then let the magic start. Your team goes off and comes back a week later with three ideas. In a short meeting you brainstorm the best one, then meet one week later to review the final work, just tweaking small things and you're done.
The key to this rule is you're not removing yourself; you're reducing your involvement from 80% to 20%, but still making the most important decisions and staying out of the small details. I do this all the time, but most interaction is online through an online communication or project management system.
6) Limit the Hours You Work, Create Strict Boundaries.
This is so important and I want to punch people in the face that don't do this. The number of hours worked is very misunderstood and often used as a badge of honor. The only badge I give these people is a badge of stupidity.
Being successful while living a balanced, free life is about being effective, efficient and productive, not about working long hours. I could bore you with 14 paragraphs on this subject but instead I'm going to recommend one "classic" business book, ask that you watch a video and give you an experiment to try. '
First the book: 7 Habits of Highly Effective People (note the word "effective"). Now the video, Watch this. Funny story, I performed this skit for my company years ago, it went well and I think everyone got the point. Several months later I was visiting an office in Portland and saw the glass tank I used for the skit full of sand and beer cans, I was amused and kind of flattered they would keep it around.
Your experiment. Try stopping work at 5:00PM every day for 3 weeks (you must fully commit). In your 3rd week start observing how you are spending your time during each day, I bet you're spending more time on the big things, and avoiding the little things. This is the key to working effectively.
7) The Golden Rule: Treat people well.
Get employees to care and you'll maximize productivity.
The best way to think about motivating people or getting the most out of people is getting them to care. That's right, just care about what they are doing. When people care, they will do anything and will achieve the most. Take the extreme example, parents "care" about their children and likewise put in an enormous amount of effort and resources to make them the best they can be.
Think about what makes you care about something and what makes you NOT care about something. It's tied into the golden rule, or treating people the way you want to be treated which includes, respect, creating a challenge, proper compensation and listening to people. Ask anybody that is not happy at work and they will tell you the same thing. My boss doesn't respect me or listen to me. I'm bored at work. They take advantage of me or they don't pay me enough.
The one specific tip I'll give you, is to consider providing a company wide profit sharing program. Nothing aligns everyone more, creating effectiveness at work and "caring" than employees knowing we are in this together!
8) Commit to EFFICIENCY Through Technology
You cannot build a scalable, highly profitable business that runs efficiently without implementing modern tech tools. I started my first company in 1999 and remember getting orders online, printing those orders, putting them in the accounting Inbox for manual entry into Quickbooks. This isn't the only reason that company failed but was representative of many inefficiencies that kept it from generating a profit.
Now I obsess about using technology or creating a better way to do everything, I automate everything! When I come upon a task that I know is repetitive, I automatically think about a way to implement a system that will streamline or automate that task.
Take customer service, it's the best opportunity to save time and you simultaneously help employees and customers. A majority of product or service issues are repetitive and therefore can be fixed. The key is your organization, not the technology. It's imperative that a feedback loop is setup between the front line customers service team and both the product development and the backend infrastructure team. If an issue starts to repeat, you first create an FAQ with very specific instructions on how to solve the problem (most companies end there) but more importantly the issue gets moved into a priority for the product development team or engineering team. The issue needs to be fixed so it doesn't happen again.
This entire process is done through technology, NOT MEETINGS. I also find it useful to set up incentives for employees to think about how to solve the issues before they happen, and reward those that come up with the best solutions. I'm not going to get into the details of how to use technology or the specific workflow here, but if the customer service team is using Zendesk and the company is using Jira for issue tracking and Slack for communication, this all happens in a wonderful integrated loop, that creates a trail, explanations, task lists and feedback loop.
Like anything, efficiency and the use of technology to remove repetitive tasks allow you to one day work from the beach or ski slope, but it has to be made a priority.
Here are my favorite tools (I strictly use online or SAAS based tools);
- Quickbooks online
- Dropbox (less important now that I have Slack and am using Google docs more)
- Google docs and the entire Google ecosystem.
9) Detach Yourself from Urgent/time/deadline driven tasks & stuff you don't like doing.
When my company started to grow I committed early to constructing a company that worked for me and my partner, or fit certain life goals we were trying to achieve. Most of the goals were about freedom of choice, and spending more time with family. I was starting to hire people to handle the growth and therefore could decide what they did, and what we did not.
Make the following two lists: Stuff you like and don't like doing & list of tasks that were associated with urgency, time requirements and deadlines. Hire people to do those tasks.
For example customer service needed to be available every day from 8:00 - 5:00pm, so it's a "time" driven task. That was the first to get off my plate.
When you publically make announcements about products, you create a pretty serious deadline for product release. The project manager lives by deadlines, like product releases, this was the next person to be hired. And good projects managers thrive on this intensity.
From time to time there are crisis's, which always requires urgency. I kept an eye out for those and made sure I wasn't first line on most things that were on fire. I created a layer between most tasks associated with urgency, time or deadlines and my own responsibilities.
Within a couple years, my weeks were much more calm and I was able to spend more time considering larger growth opportunities and growing the company in more macro ways.
10) Get Big Enough to Hire $100k Qualified Professionals
When we were around $2 million per year I realized two things, there's a lot more to do on a daily basis but also I couldn't afford to hire $100k per year professionals to work around me. I use this threshold, because anybody that has a proven track record to get stuff done, is typically in this range (or higher).
I went through three stages of hiring that ultimately lead to me only working two hours per month. I consult with a number of companies that hit that $1M level but can't get beyond it, it's like a ceiling threshold. This happens mostly because they are mostly run and driven by an individual not a group of amazing people. There is only so much a person can do.
Hire your first $100k professional
The first stage is generating enough profit to hire your first $100k FULLTIME professional. It can be in an area that you're weakest or an area that will have the biggest impact on company growth, like marketing or engineering. It's tough finding the right person, and you may need to go through a few hires but once you get the right person, it changes everything. In the first state, as profit grows, you add a few more $100k professionals in the most important areas of the company. With each hire, more high level work is being done without you.
Get out of day-to-day operations.
In stage two, you should consider hiring someone to run day to day operations, typically a general manager. Trust is a huge factor in hiring this person, and therefore should be someone you know, or is known by a friend. Running a company is a 1,000 little things, it's critical you remove yourself from the first line of most of these tasks and instead spend time with your general manager guiding on a more macro basis and setting policy and philosophy, not specific micro decisions.
Having a general manager handling HR, operations, customer service, project scheduling and deadline management should elevate you to yet another level. I was able to focus on even largest company opportunities to grow the company even more. I ended up purchasing four companies, adding large licensing agreements and closing several significant and lucrative partnerships. I did all these things, while my company was running well on a day to day basis and I started working on my own schedule and not many hours.
Hire the big guy (or girl). CEO
Once we were big enough to have several $100k per year people running departments and had several years of day to day operations handled by a GM, were decided to look for a real CEO to take over everything. This is the ultimate decision, which is certainly full of potential pitfalls but once you've seen the benefits and possibilities of the company running and growing without you, it's a natural step. And when I say, "natural", I'm referring to my entrepreneurial spirit that isn't designed to run stuff, I'm more interested in starting and growing things.
It's been two years since I hired the CEO, and it's amazing. He cares so much about all the little details and the staff. And he's grown profit by nearly 40%. I write all this to tell my story, to give people a guideline to follow but most to say it's possible and can happen.
You must start!
That was a lot but you're already doing a lot. You just need to pivot some of that time towards these things and, in a few months, you'll see why I only work 35 hours in a week, coach all my kids sport teams, donate numerous hours to charities, have dates with my wife, take trips without a computer and counsel dozens of companies on how to achieve business success and a balanced life together.
You make of ton in investment in your company, how about making an investment in yourself!