Readying Leaders Who Can Delegate Comfortably

Doug Harrison recalls very clearly the shift in thinking that sped his business up. Says Harrison, founder and CEO of the Scooter Store, a $200 million provider of power wheelchairs and scooters for the disabled: “We had spent 72 years struggling to just make our local operation work. We knew our systems weren’t ready, and we knew growing the business would take us away from our families. But we also knew, once we started making a small profit, that we had a business that could grow.” The threat of a new competitor also helped nudge him toward choosing hypergrowth for his New Braunfels, Texas, company. “That kicked us off the edge,” he says.
Harrison realized he couldn’t grow without help. Although others were telling him that it was too soon to shell out big salaries for experienced managers, he has never regretted it. Around 1995, Harrison added an operations manager and a controller to his eight-member payroll–paying each of them more than he was earning. The controller replaced the company’s outside accountants. “They were a small firm, and we had big-world plans,” says Harrison. Pursuing those plans meant he had to free himself up from what he was doing, which was why he hired an operations manager. Delegation is just as crucial as management thinkers claim it is. And Harrison knew it was crazy that he was the one deciding whether the bathroom towels would be plain white or blue-striped. He needed a managerial structure in place to let him focus on his real job: growing the company. “We went from two locations to five that year, yet we felt we were in better control of the business,” notes the former petroleum engineer. “I was pumped up.”
At what point does an entrepreneur need outside management expertise? “By about $8 million or 50 employees, it just gets too big to keep it all in your head anymore,” explains Shannan Marty, CEO of Tracer Research Group, a $15 million, Tucson-based tank and pipeline leak-detectio
Company. Marty looked to the Fortune 500 when hiring outside managers. These senior hires brought with them systems that her existing employees, who’d grown up with the company, didn’t know: salary schedules, performance evaluations, information systems, and strategic-planning processes. However, as she learned, bringing in outsiders can also be tricky. “I probably over hired,” says Marty, who co-founded the company in 1983. “A culture clash developed from the regimented, hierarchical communication structures they were used to at their mega-corporations. It was strangling us. Our long-term technical employees were very unhappy, and turnover was up.”
Eventually Marty replaced some of the outside hires with the people who had been with her from the start. The difference now was that they had learned the tricks of big business and were ready to step into larger roles. Even so, Marty will tell you that the company would not have grown without the infusion of new, more experienced talent.