Entrepreneurs are often independent-minded. They fight structure and authority. This strength leads them to pursue their own vision and carve out their own path. Taken to an extreme, this strength becomes a weakness. The entrepreneur’s desire for independence and freedom from structure causes him/her to resist the imposition of hierarchies within their own business. Enabling entrepreneurs to take their business to the next level often begins with changing their mindset.
The change in mindset precedes the change in behavior. When they learn the value of hierarchy, it frees them up to optimize and leverage their own potential and that of their team members. Some tasks have an economic value of $10.00 per hour and a smaller number $1,000.00 to $5,000.00 per hour. The more time an individual works at the highest level of their capability, the more they will earn and the more value they create. To work at the highest level of your capability, you leverage the time, energy, creativity and intelligence of others.
In addition to leveraging people, you can also leverage technology and hierarchies. Let me give you an example. One of our clients is a successful entrepreneur. Over the last ten years he has grown his business to $12,000,000.00 in revenue and $2,500,000.00 of net income. In the beginning, he did everything in his business. He started out in an Executive Office Suite and only moved into his own office when he was generating sufficient cash flow to cover the overhead. His first hire was an administrative assistant. She took all of the $10.00 to $50.00 an hour tasks of his desk and allowed him to focus on higher value activities. As the business grew, he hired more people. Each new hire added higher level capabilities to the business and freed the entrepreneur to increasingly optimize. He also invested in technology and implemented structure and systems to increase efficiencies and effectiveness.
From an organizational perspective, the building of a hierarchy facilitates optimization and leverage. In an ideal situation, the position you occupy in a hierarchy reflects your optimal capability. Most entrepreneurs do not know the science of building the required or requisite organization to achieve their objectives. In this example, we were able to introduce him to the art and science of individual and organizational development. The combination of art and science at the levels of individual and organizational effectiveness is a potent mix.
Initially, like most entrepreneurs, he was suspicious of hierarchy. However, he quickly grasped the concept that tasks are organized hierarchically i. e. the economic value of a task is based upon its perceived importance and required competency level. Awareness precedes choice. Armed with the knowledge of the importance of hierarchy to his success and fulfillment and the success of his business, he consciously set out to build the requisite organization to realize his vision.
All of our work at the individual and organizational levels is based upon two principals:
1. Optimization 2. Leverage
As individual performers, we optimize when we work at the highest level of our capabilities. When we apply this to the design of our organization, it frees our team members up to optimize and leverage.
Happily, I have seen this time and time again and additionally, it gives me great satisfaction to see our clients experience both Awareness and Change!