Delegation Done Right

Jud Motsenbocker Contributing Editor

There comes a time when you'd like to focus on the larger picture — and that means delegating responsibilites. When and how do you start to delegate responsibilites to others in your company?

Jud: Greg, what's your definition of delegating?

Greg: Taking anything that is technical, tactical and things we get paid to do — any office work actually — and giving it over to someone else to do so I don't have to do it. I also encourage my project manager to delegate a lot. It's really pushing responsibilities down as far as we can in our organization.

Jud: Daryl?

Daryl: As far as delegation is concerned, I look at my role as more of a coach than anything else. I will bring my guys to the table, explain to them what the outcome of the situation should be and encourage them to come back with any questions they need to get there. For the most part, we do not micromanage our lead carpenters. They are even versed enough that they can write notes up to $5,000 for the company in additional work orders. We encourage them to do the best they can. We give them a timeline and we evaluate so they know where their downfalls are and where their strengths and weaknesses lie.

Jud: That's interesting. I have a definition here that came from NAHB: "Delegating is a downward transfer of authority." Daryl, it sounds like you go quite a ways on that. Greg, you don't micromanage but, on the other hand, you keep your finger maybe on a tighter pulse than Daryl does. Does that sound right Greg?

Greg: I actually don't. Even though we're relatively small, I probably go to a job site every other month. About half of our sales are done by me, and the other half is done by project managers. Once the sales are turned over, we set up the budget and schedule. Our project managers coordinate everything from there. In our company, the project managers are more similar to the lead carpenter role in a lot of other companies.

Jud: Daryl, why do you feel the need to delegate your duties?

Daryl: I lost the ability to be out in the field, which is a passion of mine. Due to an injury and some personal problems, I was kind of forced into the role. I did get some of my education designations through NAHB. I didn't know the reason I got those at first. Once I went through as much trouble as I did, I understood my role more clearly as the coach and delegator of authority to my people. It was something I wasn't expecting. When I got my education, it just kind of popped up on the radar as, "this is the reason why."

Jud: As you stated, your education in this case came through NAHB and the University of Housing area. Is that correct?

Daryl: Yes, that and the college background I had in business.

Jud: Greg, why do you feel the need to delegate?

Greg: In 2004 and 2005, I was the project manager/bookkeeper/plumber/salesperson/carpenter. You name it, and I did it. I was really pulling my hair out, to be honest with you — the 80-hour work week and stuff like that — and I got to the point where I just couldn't keep going that way. It put me on a trajectory to find out what it would be like to build a larger organization. I spent a lot of time talking to a lot of other remodelers. I was inspired by a guy named Steven St. Onge in Rhode Island who has taken his business to the point where he works 10–20 hours a week and spends the rest of his time developing the business and doing other things. I was really inspired to become a better leader of people and also restore some sanity to my life.

Jud: A good answer, that's for sure. Greg, carrying on with that, what were your goals when you went to delegate? Anything else you can think of right off hand?

Greg: My goal was to become free of the day-to-day business. I really enjoy developing systems and leading people and creating the strategic vision that we're pursuing. I did love being in the field. It was tremendously rewarding to develop other people to be able to do that.

Jud: Daryl, what were your goals when you started delegating?

Daryl Kemp, Owner Blackberry Builders

Daryl: My business is about eight to nine years old now. My first attempt to build the wheel was incorrect. When I got my back surgery, it forced me into the role of delegator. I looked at my role a lot differently than I did before. I was more of a dictator; now I'm more of a coach. Through knowing some of my mentors at NAHB, they showed me that you don't necessarily have to work in the field to get a paycheck or to retire. It's given me something to shoot for. I would like to be able to have succession in my company. Not only within my own family — I don't know if anyone will take it over. I want to get my guys up and trained enough to where they can take it over from me someday so I can maintain my lifestyle for being the visionary who got them there.

Jud: That's a neat answer, really. What duties do you delegate?

Daryl: I try to delegate as much as I possibly can. I go back to the big picture: problem solving. I will draw a picture for my people and then let them color it in the way they know how. I look to everyone from the salespeople all the way through the laborers who work within the company to do our main focus, which is to keep our customers happy.

Jud: Greg, what duties to you delegate?

Greg: I delegate as much as I possibly can. All field responsibilities are delegated, including materials and everything needed for any job. We're having a meeting tomorrow with the project managers to set goals for 2008. I will say to them, "What do you want to get out of this business next year?" That will let them help me create the vision for where we're going. The only thing I do not delegate much, because of my financial background, is a lot of the administrative bookkeeping. I intend to do that; I just haven't found the right person.

Jud: Who do you delegate to? Only trusted employees, new employees or a combination of both? What fits?

Greg Rittler, Owner Kanon Group

Greg: I'm a believer of giving people opportunities very quickly. We'll take a new employee who has been a carpenter and has expressed a desire to learn how to lead a project and we'll fit him quickly, within six months or so, into a modest basement or kitchen, and let him lead it. I don't have anyone in the company who I wouldn't delegate a lot of things to. We find out quickly whether or not people can do that. Quite honestly, we let them go if they can't do that.

Jud: Sink or swim, and then we'll throw you a life raft.

Greg: My philosophy is we want a company full of owners. We want everyone here to feel like they're an owner. I compensate them with the profitability also.

Jud: Daryl, who do you delegate to?

Daryl: We keep a pretty tight reign on the financial end of it. We have someone trusted who does the bookkeeping for us. I oversee a little bit of the sales to make sure those are happening at a profitable rate. Next year we'll be moving into a "shared profit" ability more so for my field personnel than I had expected we would ever do. It's just a matter of getting them to learn the system to see, "If I can turn this job quicker and get one more job in this year, I may have a bigger payday by the end of the year." I'm trying to get all my people to be forward thinking in that. Delegating? We will bring in someone. We have one lead carpenter who knows what his role is. When we do fill up enough positions behind him, we'll move him into a production manager role. That will be a huge step for the company; we've never had that before. It's not only delegating to the people but giving them a career pathway. Sitting down with them regularly and giving them reviews, asking them where they want to be in the company, where they see themselves in three to five years. It's hugely important to get the right people in the right positions. We have one guy right now who is in the field. He wants to be in sales. I'm going to move heaven and earth to make that happen for him before he's done with this company.

Jud: That will pay dividends in the long run, I think. Because you have learned to delegate, what areas has that allowed you to focus on more?

Daryl: Because I come from the field side of it, I really didn't trust the delegation. It was kind of thrust upon me. I had the numbers to make it work, but I never trusted the system. What has it freed me to do? It has freed me into diversification and creating long-term relationships with not only my subcontractors — I call them my trade partners — but with the representatives from manufacturers, window companies, etc. It's freed me up to give back to the industry that has made this possible for me. I try to do as much as I possibly can for the industry as time will allow.

Jud: Greg, what has this allowed you to focus more on?

Greg: It has really restored some sanity to my life. When I first started delegating, one of my first goals was to go on a two-week vacation without working. The first six or seven years in the company, I'd gone on long weekends, but never really took a full week. There's a certain amount of preparation that went into it. I did it, and it was tremendously freeing for me and for my family. It cut my workweek down to a reasonable level.

Jud: You went from 80 to 50 didn't you?

Greg: I went from probably 80 to 40. And I'm also coaching some other small contractors in my area. When I started the business, I wish I'd only known about the resources and the way to do things right. I can relate to Daryl saying he did it wrong the first time. I sure have done that! I get a lot of fulfillment out of helping smaller guys who are getting started, whether they're subcontractors or other contractors, to figure out the right way to do it.

Daryl: That's admirable, Greg. That's what we should all be doing.

Jud: Absolutely. That's a big help. I teach seminars across the country. And, yes I get paid for it. But, when someone comes up to me a year later and says, "Jud, I was at your seminar and this really helped," that's why I was really interested in both your comments in regard to the education side of this. Whenever I train someone in my own company, especially the people out in the field, it pays dividends 10 times over.

Daryl: You've been training your competition, Jud.

Jud: Well, to some degree. We haven't had that problem; the people have stayed with us. I've got guys who have been here for 30 years.

Daryl: Even through your HBA, help to train your competition. We're not competing at a different level; we're all competing at the same level. I do run the education for the state of Illinois.

Jud: Greg, when do you delegate? Before you need to, or do you see that you have it in place when you have to? Do you set it up ahead of time, when you get a new job, you're going to delegate that authority or do you try to push it as far as you can and then delegate when you have to delegate?

Greg: I did a year-long training program with a company called E-myth Worldwide. It's really about how to develop systems and delegation. We've developed a five-year plan for almost every area of our business: for sales and marketing; production; and administration. We're trying to execute according to our plan. We've got a fully developed organizational chart for that five-year vision.

Jud: You're delegating before you have to.

Greg: Yes. I'm saying, "Here's where we're going," similar to Daryl. "What's your three to five year plan? Which of these boxes would you like to be in at three, four or five years?" I think that process, five years, will be much faster than that.

Jud: That's good. Daryl, when do you delegate?

Daryl: Always before I have to. We set goals for our employees. They know their responsibilities within the company as it is today. They know which sector is theirs; they know if a job comes in in their sector they'll probably be the ones leading it. As far as in the office, we have done some diversification this year and have hit our bumps. We have projections for next year that far exceed what my business plan alluded to. It's growing exponentially. We already see a need to put on more personnel. We're going to get proactive with it. We have a busy time coming up after the 1st of the year. We should have someone in place before the end of January to address our needs. We're very proactive in the fact that we hire and give people the authority to do what they need to do and the tools to do it with.

Jud: Daryl, what has been the impact on your company?

Daryl: You can't believe what a positive impact it's had. Everyone has a sense of ownership. Instead of owners, I want all my personnel to be enthusiastic salespeople for our company. Who better to sell our company and what our beliefs and goals are than the people who work for it? If they're not happy, they can't be in that role. We have our company meetings; we address issues in a timely fashion; we take care of our employees and compensate them well. We couldn't have a better core group of people to go into the next year with.

Jud: Daryl, would you say that this affected the financial and production of your company in a good way?

Daryl: If we were talking about this two years ago, we were probably $150,000 in the red. After coming out of the surgery, we were probably not even thinking about continuing the business. Positive? Yes, this couldn't get more positive.

Jud: That's great. Greg, what impact has it had on your company?

Greg: We came from a similar condition: it was "close the doors." Rallying the troops and getting alignment from everyone from me down to the assistant trucker in the field has had an enormously positive benefit. I was at a Remodelers Advantage roundtable meeting when I got a call from one of my carpenters. He was on a job and looked around and saw a whole neighborhood of houses that needed roofing and siding done. It was a lot of replacement work. He said, "Why don't I give a knock on some doors and pass out cards to someone in the neighborhood?" I knew when that happened that I'd taken them to a new level of how they think about the company. They're looking to how they can grow with the best for the company as a whole.

Daryl: Greg, when you have an employee that steps out like this, how is this type of employee rewarded? We have our own system in place for rewarding that kind of action.

Greg: He will get a commission on any sales that come from that. They're generating a lead. We'll give 5 percent for that. We try to acknowledge the people. We all have blackberries and e-mail. I'll send an e-mail out right away, "Great job thinking of an opportunity for us!" The overall company profitability is divided monthly — it's a semi-convoluted system. There are three main traits that we reward for field staff: doing things in the Kanon way; doing things safely; and having the right tools, equipment and skills to bring to the table. They get a monetary reward for that. And for project managers, their incentive program is based on producing $50,000 per month installed on time, on budget, with a good customer satisfaction rating. If they do that again, they get $1,000 per month every month they do it.

Jud: Do you both feel that, because you delegate and give them the authority, that it has helped you to mature those guys and obviously make more money for yourself?

Greg: Absolutely. One of the things I learned is that I was being so afraid of doing things over. I was so convinced that I was the only one who could do something right. To have guys producing who really know what they're doing and who are really invested because they have been given the authority and have been delegated the responsibility, taking ownership of it has been incredibly healthy for everyone. 

the discussion continues...

Jud: Daryl, do you have those same feelings one way or another?

Daryl: I was thinking about the past. When you dictate, it gives safe harbor to people that probably are not the best employees you could have. They're just kind of going through the motions. When you're a dictator and overseeing and directing every one of their moves — micro-managing them — they don't have potential to grow. They're looking out for themselves and trying to be as safe as possible. When you allow someone to go out there and get on that tightrope for the first time by themselves, all you can do is step back and hope they don't stumble or misstep. When they do and you applaud them, you have an employee for life. It's incredible to see the actual pride in people.

Jud: I'm looking for a list here. Daryl, what steps do you take to delegate? Do you have a system when you start to delegate a particular item, job or whatever it might be?

Daryl: Systems are key to a successful business. Anyone that says they are running by the seat of their pants and are doing great is lying through their teeth. It starts with company culture. People come in and new employees see how the system works and get excited about it. That begins their journey with our company. There are sytems in place for handing things off; they have a trial period where they get "mentored" by some of my key employees. They learn their responsibilities quicker that way, can actively jump in and say, "I can do that!" and know that they have the backing of the company.

Jud: Greg, do you have a system in place for delegating?

Greg: We do. One of the things we talk about is "clarifying the win." Our system is: what exactly does a win look like in this situation? Whether it's an addition, a bathroom or a kitchen, what are the key things we need to accomplish? Ideally, what we want in the person being delegated to is a great deal of clarity about what they have to do to make it successful. We did a photo shoot a few weeks ago for some marketing we're doing. I handed it off to one of my employees and said, "Here's what we want, let's make sure this happens." I gave him a lot of freedom to get something done. Here's what the "win" looks like at the end of it.

Jud: Good point. You look at the end and say, "Here's where we should be." Greg, one of the points in the steps of delegating was to select the right person and delegate the entire task. You both mentioned clearly communicating the task; tell them the whole story and determining a standard of measure; get a commitment from them; provide support; and then maintain open communications. Do those steps sound like a fair statement, Greg?

Greg: Yes, I think so. Do you have measure in there?

Jud: Yes, determine a standard of measure.

Greg: Yes, that's very important. I don't know that I constantly think about each one of those each time I do it.

Jud: Some things happen automatically. When you select a person, you already know what that person can do. Daryl, what about you? Does that sound like a program?

Daryl: Yes. What we're doing, with all those steps, is part of company culture that dictates what the end result will be. They know what my standards are and what my company's standards are. As far as a clear picture, all they have to do is look at the job file. If there is a question, we can take it back to sales. If there's more clarity needed for a true vision of what is expected. That's passed off in our process of trades walkthroughs, etc. We do take people out of their sector; we have certain sectors for our guys. We'll put a project manager with a client with whom they may have a little more commonality. Maybe it's their background or disposition in life or perhaps their general personality. It goes a lot deeper than what we've talked about; — it's what is expected of us as a remodeling company.

Jud: I'm interested in both of you making the comments that it's about the culture of the company. You know that everyone's included in whatever those decisions are which are being made. Especially those people who are connected with that particular piece of work that you have to do. That's an interesting comment.

Daryl: Our culture has gotten to the point where if one of our lead carpenters stops by another site and it's a little bit dirty, at the next company meeting he'll rub 'em about it. It's a good thing.

Jud: Daryl, what have you learned from the process?

Daryl: I've learned that I don't have to do everything. We can all do everything; that's not what an employer is supposed to do. They're the ones with the vision, great hand skills, good bookkeeping skills or what have you. We can do everything, because we started our company. But do you have to? No, you don't have the time in the day to do it and do it correctly. Learning that hard fact is probably one of the best lessons you can learn early on. You can't do everything, and you need to find good people. We look for good employees and make them better. That's our goal.

Jud: Greg, what have you learned from this delegating process?

Greg: You can have a superiority complex and think "there's no one who can do it as good as I can." There are a couple of guys we have in the field now who are at least as good as I was in the field, and I get a lot of pride out of that. We want to be a culture that develops people. Who you hire and how you hire, to me, is very important. I never really got that before. I thought we needed a carpenter and would interview some people and hire that guy if he's good. We're now spending an amount on doing some testing like the DISC Analysis and we use a Harrison Assessment tool. We're really careful about who we hire. We want to know them pretty well before they even come on board, so we know whether they have the capacity to be great leaders within the organization.

Jud: You try to hire people who fit the organization even to the point that you may have to end up teaching them some skills. They're at least someone who fits into the team.

Greg: We want to hire high-capacity people who will want to take on more responsibility. We don't know anyone in the company who wants to stay where they are. Everyone wants to learn how to manage a project and to continually assume more responsibility and grow as an individual.

Jud: What are some suggestions or tips that you'd give to other remodelers in regard to delegating?

Greg: The biggest one is to be prepared to let people fail a little bit. It was not a smooth road right away when we delegated. When someone first runs a job independently himself, you've got to give him enough freedom to make a few mistakes and to grow in that. It's hard to sit by and watch, but I think it's really important for us. Encouraging people — people are usually a lot more capable than you think they are. A lot of people are willing to take responsibility and somehow we think when we're delegating we're actually adding burden to them. It's actually, in my experience, that most people like to step up and take more responsibility and to grow.

Jud: Good answer. Daryl, what tips or suggestions would you have for other remodelers?

Daryl: We don't give our employees opportunities to fail. We give them opportunities to soar and to prove themselves. During the first year they're with the company, we are guiding and helping them a little more, but we give them the opportunity to make decisions. Of course, there will be missteps. Our culture tells us that they're going to succeed, and we're going to help them. Suggestions I would give to other remodelers? I think Greg brought up a perfectly valid point when he mentioned the DISC testing. We've been doing it for years now. It's pretty accurate. When someone comes in for their yearly review, and say they want to move in a certain direction, it's something I can pull out of a drawer and say, "I can see that." I have viable proof that if they want to go there I'm going to help them.

Jud: Greg, I'm going to turn that the opposite way. Your testing shows that this person is good at this and this, but sales will not be an answer, and he wants to go to sales. Do you try to help him through that?

Greg: We had that exact situation. I am a firm believer in the testing, but I'm also a firm believer that if someone wants to adapt their behavior and wants to do something, they should be given a chance. We've had guys who haven't done great on the analysis to be salespeople but have learned how to sell. They're not our primary sales people, they are project managers who also do sales work. If they get the right kind of sale, they can do it. On the other hand, there have been people who have picked a path that I've tried to steer them away from. And, I've done that too, trying to put people into places where a hard line is not going to allow them to be special. In those cases, I've apologized and shared some responsibility and then moved them into a better role.

Jud: Daryl, do you try to help them, too, if after testing you find those things out?

Daryl: When you try to force the square peg into a round hole and it doesn't work, you've got to say, "That was my fault, I knew better and should not have let that happen." There is nothing worse than setting someone up to not succeed. You can try to teach and coach them in the right direction. But, if someone doesn't have the aptitude for it, I wouldn't take the girls in the office out in the field and expect them to work and use a compound mitre saw. I know that it's not their aptitude, and I know they're not versed in it, and are probably setting up for a lawsuit. We try to stay away from things we know are not going to work. The technologies and systems are out there. If you can't find something exactly like they want to do, you can probably find something within a company if you're growing it that will make them happy. And you look for that.

Jud: It's interesting where we've taken this delegating and doing it right. When we get into this conversation on answering a question, it goes back to the company culture and the way you have the entire system set up. Daryl, what would you do differently, if anything, with what you've learned over the last few years about delegating authority? What would you do differently that you may have stumbled on that we might give to a remodeler so he could learn from our error?

Daryl: I made the tragic error of trusting a little bit too much once in my lifetime. Along with delegation, you have to trust. But, you also must maintain, monitor and coach through all situations in good times and bad times. There is always room for a little growth for anyone to learn. You can't just cut some people loose and let them just take over. There's some trust there. We got burned so bad that I never thought I would trust again. I found that, by monitoring closer and coaching a little bit more, I was able to gain back the trust I'd lost. I would say monitor and coach closely. Find out who exactly that person is that you're trusting with your baby. Make them think it's their baby as well, and great things will happen.

Jud: That's good advice. Greg, what would you do differently?

Greg: I would have started a lot earlier. I wish I had delegated a lot more early on in my business, and I think we'd be a lot bigger than we are now. When you delegate it is important that you hold people accountable. I've done the same thing. I gave someone too much responsibility without monitoring and checking up on them and making sure things were going right. It really came back to bite me. It wasn't as horrible as Daryl's sounds, but it was definitely an eye opener! It made me very cautious. Make sure the people you delegate to are trustworthy and have some accountability in their lives for what they're doing. Those are probably the two biggest things. The other thing is letting go, it's very hard for a lot of people, especially those who have run their own company for a long time. It's taking a chance, leaping off a cliff, and you're doing things differently than you're used to.

Daryl: Delegation without systems in place is like jumping out of a plane without a parachute. That might get in the magazine!

Jud: And that's a good point. The systems have to be in place for you to be able to monitor and measure. We mentioned the steps: clearly communicate the task, give them support; stay with that open communication; and get a commitment from them. Another you've both added is to monitor: make sure they're doing what is supposed to be done and staying on top of it. I still go back here and say what both of you have brought up. It certainly has helped your business to delegate authority. On the other hand, when you delegate it, it's giving you another layer of responsibility to make sure that delegation is happening correctly. Again, you're working on your business instead of working in your business. I think that's a big difference. One of you made the comment that you were working in the business instead of on it. Certainly, by delegating you're going to be working on it. I certainly found out that when I gave up production and turned it over to someone else. No one can run production better than I can, and if you don't believe me ask me and I'll tell you. But, when I did it, that person did a better job because it was all they had to worry about. They did not have to worry about running the rest of the company. It goes back to the idea that it frees you up to work again on the company instead of working so much in the company.

How do you determine who does what?