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Prevent Recentralization In Your Small Business By Using Systems

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Prevent Recentralization In Your Small Business By Using Systems


CFP®, CEPA, CVGA, at WealthSource Partners, LLC, is a financial educator, wealth manager, author, and speaker. More at WealthSource.com.

One of the hallmarks of a good exit plan for a small-business owner is decentralization. As an owner, you can do certain things for your company that will increase scalability and grow its value, such as removing yourself from its daily operations. Doing so empowers your team to handle the day-to-day activities while you focus on big-picture strategies.

But what happens if one of your key people (eg, your top salesperson) is suddenly unavailable for an extended time? Simply stepping back into that central position could significantly affect your business’s value, especially if your exit is looming. Therefore, you must develop systems that can prevent the need for your recentralisation.

To create these systems, it is important to understand your recentralization triggers. These are the reasons many business owners find themselves reaching for the reins they previously handed off to their team. While there could be any number of triggers, I want to focus on two of the most common (and actionable) ones.

Declining Quality

After decentralizing, there are times when the issues from growth seem to match or even outweigh the benefits. Understanding that quality and service are a big part of what you got here, it can be difficult to see quality slipping while your team is learning the processes. Because your natural instinct will be to jump in and fix the problem yourself, you need to have strict quality control systems in place to prevent you from recentralizing.

Implementing concrete QC processes can help maintain your company’s standard of quality even while team members are learning various processes. QC methods such as the Taguchi method, X-bar charts and the 100% inspection method are great ways to ensure the quality of products.

But what if you’re in a service-based industry? There are many things that can be done to maintain the quality of service across your organization.

Detailed processes and standard operating procedures can standardize each task or service performed, providing clients with a consistent quality of service and an exceptional experience. Likewise, client reviews/surveys provide you with individual perspectives and aggregated client perceptions of how your business performs.

Additionally, creating a culture of happy team members has a profound impact on their overall performance level. This can be achieved through career and personal development pathways, stock options/profit sharing, great employee benefits, etc. Employee retention and professional development systems like these can have a trickle-down effect that promotes great service quality and high performance.

Firefighting

As a business owner, you know there are an endless number of fires to put out on any given day. These situations can occupy much of your time, creating stress that can lure you back into the center of your business (or at least a department). Having robust systems can help prevent some of those fires from popping up, leaving you free to work on your business rather than in it.

In my own business, I mapped my sales process as part of my own decentralization. If I did this, I had a team member observe me and document each step. This ensured I wasn’t leaving anything out of the process. Once the process was recorded, we tested and adjusted it. I bring this up because many business owners (whether they realize it or not) are the primary salespeople in their organizations. This process can and should be repeated, however, for each department within your business.

By training key employees to replicate your processes, you can decentralize. But don’t simply pass the information on to a few key employees within your organization. If they left your organization or required an extended leave, you would be right back in the position you were in before mapping your processes. Instead, turn each process into a companywide system that can create continuity in most situations.

Addressing quality control and cross-training systems before you’ve decentralized can help prevent the need to inject yourself back into the epicenter of your business. Each business is unique, however, with its own set of challenges. If you find yourself routinely retaking control of what you previously delegated to your team, speak to a trusted advisor or business coach to find additional ways to eliminate recentralisation.

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