You can be Richard Branson or you can be J. K. Rowling.
Growing a business from “owner scaled” to “enterprise scaled” is a process of erasing your name from every box on your organizational chart until you have only one job. What varies from business to business is which box you claim as ‘home’.
In the majority of businesses (think Branson’s Virgin Group) your ultimate home will be something like Owner or Founder & Chair. You oversee your enterprise and benefit materially from it but have little to do with the day-to-day running.
There are a minority of enterprises where the model is different. In these (think J. K. Rowling’s world) the role of the founder cannot be made ‘non-operational’. Great chefs, musicians, writers, certain consultants and others ARE the business. The Rolling Stones as a band are not separable from the Rolling Stones as a business; you cannot remove them from the enterprise and continue to make money (residuals aside). No one but J. K. Rowling could be the author of the Harry Potter books. J. K. Rowling can’t delegate the core product: the writing.
The process of moving from the Current Cycle into the Deep or Enterprise Cycle is the same in both cases however. In the beginning (the Current Cycle) the owner occupies every place in the imaginary organizational chart of the business.
Ultimately (one of the reasons why I call it the “Ultimate Org Chart”) we want the owner with only one job: boss/chef/CEO/Chair… but mostly just “Owner”.
In my sketched org chart of “Sue’s Business” she starts in every position. By the time we are done, she should only be in one: the top one. I called it Chief Cook, but really it’s Owner.
In the sketch of Suzie’s starting org chart she starts in the middle as the rock star, and by the time we are done, because her’s is a creative business, she stays in the middle as the rock star. We surround her with others doing things for her to support that.
Both Sue’s and Suzie’s businesses are “owner scaled” to start because the entire business is scaled to the reach of one person. The business is them. If we grow Sue’s and Suzie’s businesses successfully they will become “enterprise scaled”: having the reach of an enterprise. The business is owned by them.
How You Get There: The Ultimate Org Chart
Here are the steps to going from owner-scaled to enterprise-scaled through the lense of the Ultimate Org Chart.
- Create an organizational chart (org chart) showing how many different roles you need to run your business now.
- Put your name in every box where you don’t already have an employee.
- Put employees/contractor’s names into boxes where you have them.
Decide your strength.
- Answer this question for yourself: “What is the one thing I do that adds the very most value to the business and to my life?” If you could do only one thing in your business, what would it be? Another test I sometimes use is “If I only allowed you to spend four hours a week on your business, and that activity had to be the one thing that was your greatest strength and added the most value, how would you spend those four hours?”
Start subtracting by adding.
- As the months go by, erase your name from each box as you hire people to fill it. This is the very heart of delegation: removing those areas in which you are the weakest and others are the strongest.
- The typical delegation sequence: as a general rule delegate administrative functions first, then making and delivering (baking if you are a bakery, painting if you are a house painter), then sales, then marketing, then management.
- Consider subcontracting, temping, employing… anything to grow the net strength of your business as cost-effectively as possible.
- This is the root process of moving from the Current Cycle into the Growth Cycle: expanding your team. This process should drive your financial forecasting and budgeting.
Time to Act
So much of this is a ‘back of the envelope’ process. It is a quick and dirty but effective tool to seeing your way into the future. Just as rough is the following time guideline; rough, but true enough in my experience to be useful.
- 1 – 3 years. It is not unusual in a “lifestyle” business (the vast majority of businesses; not a start-up but a business started by an owner to support a lifestyle over an extended period of time) that the owner either does or is directly responsible for every single function in the business for the first few years.
- 3 – 7 years. If the business is successful in terms of revenue growth and profitability there often comes a point where the existing “owner-scaled” nature of the business is unable to meet existing demand. At that point, the owner has the choice to continue the status quo or shift into a new gear (I call it the Growth Cycle). If you chose to enter the next phase you have to start delegating and implementing the Ultimate Org Chart process.
- 7 years and beyond. If you have used the Ultimate Org Chart process and your business is moving towards being an independent enterprise, you are moving closer to solely being an owner. It is in this phase that you have delegated all front-line roles and have also started delegating management.
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