Management Matters with Mike Myatt: How to Delegate for Success
- May 30, 2008
If you desire to become a top CEO, it will be essential for you to master the art of leveraging down. Think of any top performing CEO and you’ll find that to the one, they possess an uncanny ability to focus on highest and best use activities. While most executives that have reached the C-suite level understand the importance of scaling via delegation, far too many CEOs struggle with the effective implementation of the concept. To this day I’m amazed at how many CEOs still own tasks, roles, projects, and responsibilities that should be delegated to others. So, in today’s post I’ll share two tips on deciding which tasks, and to whom, should be leveraged down in the organization.As a CEO it is critical to develop a keen understanding of your value to the enterprise, and to further develop an awareness of activities that are dilutive to said value. The main role of a CEO can certainly vary based upon skill sets, stage of corporate maturation, and the talent level of the rest of the executive team. That being said, it is nonetheless safe to say that CEOs who find a way to focus their efforts on values, vision, mission, strategy, team building, networking, and branding will be the CEOs who achieve the highest and most sustainable levels of success.One of the first things you need to understand as a CEO is what your time is worth relative to others in the organization. There is a simple short-cut which allows you to quickly extrapolate an hourly rate from a total annual compensation figure that I find useful for quick comparative purposes. The calculation works like this: if you make $350,000 per year, just eliminate the last three zeros of your annual compensation figure and divide 350 by two. This will give you an hourly rate based upon a 40 hour work week and a 50 week year. In this example the hourly rate of a CEO who makes $350,000 is $175 dollars per hour. So if you run the same calculation on a $100k employee you find a $125 dollar per hour delta between your hourly rate and theirs. Therefore any items that don’t constitute $175 dollar an hour work that can be leveraged down to someone with a lower hourly rate provides positive arbitrage both in terms of cost savings and time recovered for higher and better use activities.Another simple rule of thumb that allows you to maximize the equation mentioned above is to leverage down to the lowest level of talent possible while still insuring an acceptable level of execution. For instance, rather than leveraging down to the $100K talent in the example above, if you drive down further to let’s say a $30k individual, you increase your organizational leverage factor by almost 30%. The most productive, high-performance organizations have the ability to deliver fairly complex solutions and complete difficult tasks at the lowest levels within their organization. Now that we’ve made the economic case for what and to whom you should leverage down to, let’s discuss what does and does not merit the attention of a CEO based on non-financial analysis. In Stephen Covey’s “The 7 Habits of Highly Effective People” he put forth a simple decisioning framework that helps to distinguish between those activities that are truly priorities and those that just appear to be priorities. Basic human nature is such that each individual believes that his/her problems and challenges are truly important, and therefore should constitute an emergency on your part. Your job as the CEO is to quickly be able to distinguish between the true emergency and the perceived emergency. In Covey’s classic illustration (above, right), you’ll find a simple chart to use as your guide. The moral of the story is this…Focus on making the lower echelons as competent and productive as possible, driving all decisions down to the lowest possible level in the organization possible without suffering an unacceptable increase in delivery risk. The tips mentioned above will help you build a formidable organization, make better use of your time, and insure operational performance gains across the enterprise.