Tag Archives: delegating

When to Delegate? Try the 70 Percent Rule

If you don’t learn to embrace the art of delegation, you won’t be able to build your business. The 70 percent rule gives you guidance on how to do it well.

So when do you delegate a task? This central question stops many CEOs from moving tasks to their team. Continue reading When to Delegate? Try the 70 Percent Rule

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3 Simple Steps To Hold People Accountable

Great leaders and managers know these 3 Simple Steps To Hold People Accountable

There is a common theme that many leaders struggle with: they don’t know how to hold their people accountable. Even if they are great at hiring A players, many leaders still are left with that feeling that their people could be doing more or better work.

Rather than first finding fault with the employee, a great leader looks first at him or herself. And when you take that look in the mirror, you might find that you have not been effective at holding your people accountable for their results.

The good news is that you can rectify this today and become a better leader with the help of three simple steps: Continue reading 3 Simple Steps To Hold People Accountable

Warren Buffet’s Secrets to Stop Worrying

Warren Buffett, who has billions of reasons to be worried, uses these six steps to free himself from worry and you can too.

We all know Warren Buffett is one of the most successful investors of all time. He has literally made billions of dollars through the savvy investments he’s made over the years through his firm Berkshire Hathaway. But with all that money at risk, it makes you wonder how Mr. Buffett could ever get any sleep: most of us would be worried sick.

Think about it. Mr. Buffett, for instance, has placed massive bets on the railroad industry. But what happens if a trail carrying some toxic waste derails? What will happen to his railroad stock? Similarly, what would happen to the significant investments he’s made in banks and financial services companies if another recession were to strike? It’s enough to drive you bonkers.

And yet, Mr. Buffett is as cool as a cucumber. Despite all that money on the line, he simply isn’t consumed about worrying about it. But why?

The answer is that he’s adopted the secrets of Dale Carnegie’s sometimes-overlooked gem of a book called “How to Stop Worrying and Start Living“. While Mr. Carnegie is probably better known for his other books about public speaking and gaining influence, Mr. Buffett has learned to adopt several of Mr. Carnegie’s tips for living a worry-free life.

  1. Isolate the Problem – The first key in preventing worries from overtaking your life is to create “day-tight” departments around the different areas in your life. Just like you can seal off a damaged or leaky section in a ship to prevent it from sinking, you need to isolate the different parts of your life–your business, your relationships, or your finances–so that they don’t spill into each other. Even if you’ve had a hard day at work, for example, you need to find a way to be the best dad you can be once you get home.
  2. Understand the Problem  – If something has gone awry with some aspect in your life, don’t overreact to it before you get all the facts. It’s easy to fear the unknown, so make time to understand what’s caused the issue. The better you understand something, the less you’ll worry about it.
  3. Prepare to Accept the Worst – After you know what kind of issue you’re facing, figure out what the worst possible outcome could be resulting from it. Then make peace with it. If you can accept the worst-case scenario, then you’ve simply eliminated any reason to continue worrying about it.
  4. Make a Decision – Once you’ve accepted what the worst possible outcome of a situation could be, then you can actually start thinking about how you actually might create a better outcome. Weigh the facts you have available and make a decision about how you might do that. And rather than get stuck in some kind of worry-vortex, where you become paralyzed because you feel like you don’t have enough information, make a decision once you feel like you’ve got 75% of what you need.
  5. Act – There’s an old saw that involves five frogs sitting on a log. One frog decides to jump off. So how many frogs are left on the log? The answer is five–because deciding and acting are very different things. After you’ve made a decision on what you could do to potentially improve the situation, act on it because taking action will immediately reduce your level of worry.
  6. Let It Go – After you’ve done everything you can to deal with a worst-case scenario, then it’s time to simply accept what’s happened. There’s no use worrying about it once you can’t do anything about it. Make peace with the issue and move on to the next one.

If Warren Buffett, who has billions of reasons to be worried, can use these six steps to free himself from worry, you can too.

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75 Percent of the Information Is All You Need to Make a Decision

You need information to take the risk out of decisions, but getting too much information has a real cost. Most normal business decisions can be made with 75 percent of the available information, focused on the right issues.

I have written before about people who have high information needs. You might call them “infomaniacs.” These are folks, or even organizational cultures, that prioritize making decisions using data, metrics, and plenty of analysis.

And don’t get me wrong, that’s often a good thing in the right situation. What you don’t want to do, however, is take that need for information to an extreme. That’s especially true when it comes to making normal business decisions.

You always want to have enough information to make the best possible decision you can. But how much is enough? And, just as importantly, how much is too much?

If you have 50 percent of the information you need, for instance, that’s probably not enough to make a sound decision. You’ll be guessing, which can make your decision quite risky. If it’s a choice that doesn’t have much impact, like where to have lunch, then 50 percent of the data is plenty.

But waiting until you have 99 percent of the information is also risky–and expensive in many ways. Accumulating that depth and breadth of data before you make your decision often:

A.) Costs a lot of money to acquire, and

B.) Takes a lot of time to gather.

Some people call this “analysis paralysis”

These are significant drawbacks, especially if you’re trying to run an agile organization that moves nimbly to stay ahead of the competition. The longer you wait to make a decision, the riskier it becomes, since you may be missing opportunities–allowing your competition to catch up or even pass you.

That’s why I’ve found that the solution is usually to make the decision when you have 75 percent of what you need to pull the trigger.

As an example, let’s consider that a potential customer is asking you to extend them a significant line of credit as part of signing on with your company. They are asking for enough money that it is significantly risky for your organization if the deal goes sour. So how much information do you need to make your decision?

To get 75 percent of what you need, you might need to establish that they are a reputable company with a solid history of being in business. You might also ask for a snapshot of their financials to help make sure they are solvent.

To get to 100 percent of the information, you might need to ask for their tax returns over the past two years and their profit and loss statements (P&Ls), while also setting up interviews with their CFO and their auditor and so on. If you do all that, you’ll have everything you need to know about this company and will make a clear and fully informed decision. But you will probably miss your chance to turn them into a customer.

Why? Because by pushing for 100 percent of the information, you may have opened up a window for one of your competitors to offer this company what they want without the hassle of providing all the information that you’re asking for.

Your company could also earn the dreaded label of “hard to do business with,” which can be difficult to overcome in a fast-moving market.

The point is that you have to balance the risk level and potential payoff of whatever decision you’re pondering with your need for enough information to make that decision. Is this something above or below the waterline, in that it could truly put your company in jeopardy? If you’re building a new oil refinery, for example, that might warrant taking the extra time and money to make sure you get everything you need to know.

The book Blink reveals that great decision makers aren’t those who process the most information or spend the most time deliberating, but those who have perfected the art of “thin-slicing”–filtering the very few factors that matter from an overwhelming number of variables.

But for most business decisions, I’ve found that 75 percent of the data, focused on the right issues, is, as Goldilocks might say, just about right.

Embracing a “Not Do” List

A key question every CEO faces is how they can get out of Player mode and spend more time in high-leverage roles. The secret to getting there is the “Not-Do” list. Everyone has a To-Do list. It helps us stay focused and organized. It’s also an easy place to park things that we think we should be doing, but really don’t have the time to tackle or remember it at that moment. There is nothing more satisfying that crossing something off your To-Do list. Yet, there is a tyranny in this practice because we tend to cross the easy things off the list to give ourselves that little jolt of accomplishment and joy. But these things – which might include checking and responding to your email – are generally not the things that will change the business. They may be urgent items perhaps. But they’re still easy and not that important in the grand scheme of business growth.

So how can we go about re-focusing our To-Do list? The best leaders make the same list as everyone else. Great leaders put the tasks in a rough order of most economic impactful to least impactful on their businesses. Then they make a key change. They draw a line about halfway up the list and write below the line in the margin “Not-Do,” which now applies to anything below the line. While that might seem drastic – you wrote those items down for a reason – the point is to get you to think about applying some strategy to thinking about those items.

The first strategy is to just not do it. Make a decision that you are not going to spend time on that issue. Hopefully it will go away. But in any case, you will not be taking action on that particular item at this time.

The second strategy is to delay or postpone. That means not taking any action on it for an extended time. Many times, this delaying tactic will result in a reevaluation of the importance of the task; i.e. it just doesn’t seem as critical as it once did. Occasionally, someone from within your organization will recognize that it is important for him or her to take the action needed to complete the task. Other times, the situation will shift and the need for action goes away. That, of course, can be a hard choice for action-oriented leaders to make. As we know, the bias for taking action is both a strength and a weakness for entrepreneurs. The truth is that waiting can work.

The last technique for dealing with your Not-Do list is to delegate. If an item is too important to defer, but still doesn’t rank in the top half of your personal list, it is a great one to delegate. Find the right person inside or outside the organization that can best accomplish this. Then make it a point to assign it to them. People are generally flattered you, as CEO, have asked them to help. What seems like a normal task to you as the leader can seem like a real stretch assignment for an employee. This gives you two benefits: The task gets done and you have developed an employee.

The Not-Do list should be revisited on a regular basis, perhaps monthly. This will allow you to become more aggressive over time and shorten your personal To-Do list.  With regular maintenance, you can help make sure that you keep those pesky non-crucial issues that find their way onto your To-Do are eliminated or delegated, which frees you up to work on the most critical constraints facing your business.

Give it a try! You may find your way on a path to being a better leader and spending more time in high leverage roles.