I was leafing through my copy of Small Business Breakthrough the other day and I realized that, each time I turned the page, images of flailing business owners were flashing through my mind. This was especially true when I got to Rule #7: "Your Business is too Dependent on You..."
Far too many of the small business owners I've met are absolutely essential to the day-to-day, if not minute-by-minute operation of the business. They are oblivious to Rule #7 and, therefore, oblivious to that fact that they have a business that is NOT
- Sustainable--things crumble when the owner isn't present to "do it the right way"
- Scalable--growth creates pain, confusion and customer complaints
- Saleable--who wants to buy a business that so dependent on a single person?
As the author says, being overly dependent on specific people is bad for your employees, the owner, and the business. It is bad for the employees because they become stuck in job traps that prevent them from being promoted. It is bad for ownership because it turns the employee-employer relationship upside down, preventing ownership from asserting their authority for fear of upsetting key employees who may choose to quit.
It is bad for the company on multiple levels. First, being too dependent on specific people performing specific work creates bottlenecks that make it very difficult to scale operations to accommodate growth. Second, it creates months of aggravation and stress every time a key employee quits and takes their knowledge and experience with them. Owners then must dedicate significant time, effort and resources to train a replacement.
The problems multiply as the number of your employees grow. The organization begins to experience more and more turnover. Recovering from this constant disruption robs the business of its momentum. The inability to promote employees who are stuck in job traps fuels the revolving door as more employees leave to pursue greater opportunities. This vicious cycle continues until day-to-day operations are standardized and systematized.
Every business owner should strive early on to be completely irrelevant to the day-to-day operations of their business. And, their employees should be plug and play.
To attain this level and beyond, business owners need to systematize and standardize day-to-day operations including an effective leadership routine. The company culture needs to embrace job-sharing and cross-training.
The dual objectives are to eliminate dependence on specific people performing specific work and to free employees from their “job traps” so they can grow with a growing company. This helps create the scalable organizational model needed to sustain long-term growth.
To learn how to create a business that is sustainable, scalable and saleable, contact your business coach.