There is no silver bullet for running a business. In a society so obsessed with success and high expectations, the value of making mistakes is often underestimated. Making mistakes is part of life and often results in new ideas, learning and discoveries. I believe the very essence of what I do as a business advisor is to let business owners recognise their own failures and convert them into opportunities for their business to grow.
After more than 30 years in business, one of the most common challenges I see is the tendency of owners and directors to struggle with ‘letting go’ of control. Consequences are many:
- Low staff morale, often resulting in:
- High staff turnover;
- Inability to attract and retain quality people;
- Lack of initiative shown by staff, due to the owner not letting them make decisions;
- Asset value reduced due to reliance on the owner, therefore the business is not an attractive investment to a prospective purchaser.
It all starts with a shift in the owners’ attitude, until they make a shift in the way they show up in their business, nothing else will change. When the owner lets go of control and delegates responsibilities, staff feel empowered and valued so they are more inclined to contribute new ideas. As a result morale improves which in turn improves productivity, systems and processes. With roles and responsibilities clearly defined a major benefit is the proliferation of new initiatives that will develop in this new environment.
When employees are given the chance to take a more active role in decision making and running the business it can have many benefits. A major benefit is the considerable improvement in the asset value of the business, due to it being less reliant on the owner. I was involved in a business where the value improved from 1.5X EBITDA to 5X EBITDA in 3 years, just by making some of the shifts described above.
Empowering and trusting your people is about more than just reaching business milestones, it is the chance to open up a new gateway of discovery and freedom that improves the organisation as a whole.
Give your people the scope to make decisions, and remember mistakes are opportunities to learn, grow and improve, so take advantage of them.