We’ve doubled the size of Apex in two years, and it never would have happened if I hadn’t stepped aside. It hurt to let go. But if I hadn’t, I knew we would never be anything more than a few people with a nice, little office working at capacity in the bustling town of St. Charles.
Stagnation isn’t bad for companies. It just wasn’t what I wanted as a business owner.
As an accountant, I work in a world full of numbers. But that’s only part of the story. What do those numbers tell us? That’s where life gets interesting. If a business owner is deep in the tactical day-to-day of business — posting on social media, onboarding new employees, writing emails for CRM and walking the plant floor checking the line, then that owner is less likely to build a sustainable, growth-driven company (if serious growth is on your 2018 bucket list, check out our FutureBiz program).
A better way for leaders that want to grow? Build your company to function without you.
Look at these two real-world examples. In example one, Peter is the CEO of a small company. He is actively involved in the business as the head sales guy. Peter IS the business. Nothing happens without Peter in the room or signing off on it. Eventually, Peter decided he wanted to move on. So he sells the company with a two times multiple (two times the profits) and remains a salesperson for five years. In sum: Peter sold at a discount and ended up with a job.
In example two, Ashley oversees a system-dependent business. She is unchained from the tactical. She intentionally future-proofs her company with a robust organizational structure and the business smarts to let go. Here’s what I mean.
She has a clear vision everyone understands and a strategy that ties to the vision. Within that strategy there are clear accountabilities for key employees. The head of sales has specific quantifiable sales goals and customer satisfaction levels. The head of operations also has specific goals for maximizing efficiency, reducing turnover, and managing inventory levels. Head of finance has goals for cost containment and other key financial ratios.
These measures produce sustained growth. Ashley realizes a five times multiple at the time of sale and stays on for six months to help the transition. In real dollars: If the company earns $500,000 a year, that’s a selling price of $1.5 million more — and the freedom to write her book, start another business or anything else she wants to do. As a certified valuation analyst, I’ll say this: How you show up as a leader directly impacts the valuation of your company.
Giving up control for business owners means channeling the important things you do through other people.
I had a leadership coach who navigated me through the junk between my ears. I had to get past ego, past control issues and past my inner superhero who thinks he can change the world as a solo act.
When you let go from the tactical, everybody still sees you as a leader. Actually, they see you as more of a leader. It’s a lie that giving up control means employees take over the business. They respect you because you trust them. They grant you more control, more leadership authority because of your willingness to give it up.
Leadership comes from believing in your people and giving them mega-opportunities to grow.
When a business leader gives up control, you create an environment where employees can be their best. I’ll shout this from the mountaintop all day long: Give it up and make it about them. They, in turn, will make it about you, and they will help you.
Me letting go of control moved Apex forward and led us to double our size in the last two years. Our merger with Morrison and Associates was sizable. So I got out of people’s way and let them do their best work. I preach it, and I practice it.
So, let go. It may be one of the most strategic decisions you make in 2018.