Accountability, Delegation, Management

Effective Delegation vs. Abdication – Part 1


I’ve been thinking about what it takes to effectively delegate rather than abdicate in business, and actually life.  Unfortunately I have seen far too many troubled businesses due to failure to delegate.  There are many facets to this subject so I plan to split it up into sub-topics.  Some of the topics to be discussed here and in subsequent posts will include:

  • Why delegate?
  • An abdication case study
  • Why many business owners and managers do not want to delegate
  • The key prerequisites of effective delegation
  • Preparing to delegate
  • A delegation check list

So why should you delegate?

The fact of the matter is that none of us are good at everything it takes to plan, build, grow and operate a business, let alone great at all the aspects of business.  Don’t feel bad, this is normal; we might lack technical knowledge, necessary skills or even the desire to accomplish certain tasks.  Thus, if you want to get beyond the limits of your experience and expertise, you must delegate.  In addition, and, most importantly of all, not delegating will, most often, take your focus away from the essential roles you play in building your business.

Don’t fool yourself into thinking you can do everything necessary to build a successful business by yourself.  Effective delegation, once learned and implemented, becomes a tremendous tool that will greatly expand your results.  In addition, due to its efficacy and power, delegation often becomes very addictive.

A Case Study – Abdication

A number of years ago, a close friend of mine in a declining part of the consumer products manufacturing business was approached by a competitor who wanted to acquire her company.  My friend had totally abdicated many of the necessary financial management functions, both personal and company, to her accountant.  The only financial input she asked her accountant to provide was a one page income and tax summary at the end of each year.  When the competitor’s offer arrived, she was in no position to analyze the monetary impact of the offer. Of particular interest for this proposed transaction was the business’ balance sheet, of which she had no understanding.    She went to her accountant for assistance in responding to the offer and to perhaps propose a counter-offer.  Her accountant, not wanting to lose a client told her that the offer was not a good one, and more or less refused to assist.  By the time she arranged for a new accountant, it was too late.  The offer had expired and the acquirer had made a successful offer for one of my friend’s competitors.  A year later, my friend did sell her business for about $2,000,000 less than the approximate value of the original offer.

Don’t get me wrong, I’m not proposing that my client should have completely understood her finances nor kept her own books, far from it.  I am suggesting that to effectively delegate a function, one must have a basic understanding of what is to be delegated, and clear definition of success.  Had my friend not taken the attitude that balance sheet accounting was not anything she needed to know about, she might have more than $1,000,000 (after taxes) in her accounts now.

This is Part 1 of a continuing series about delegation.  I welcome your comments and case studies.  Stay tuned, Part 2 will be published shortly.

Most Related Post

This entry was posted in Accountability, Delegation, Management and tagged , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *