Let’s face it; employees are the lifeblood of any business, and this is especially true for entrepreneurs. Employees interface directly with customers, they perform critical tasks, and in many ways they can make or break a business. In a small company, every employee has a very significant impact.

However, many entrepreneurs struggle with managing their employees. They find it hard to hire the “right” people, or to resolve seemingly simple problems, and the entire process becomes a source of frustration.

Why managing people is hard for most entrepreneurs

Here’s why most entrepreneurs find managing people so hard—managing people is hard for everyone. It’s not an intuitive skill, it’s rarely taught, and very few have a natural aptitude for it. Big companies have protections built in, but for small businesses even minor employee management mistakes can be very costly.

That’s why it’s important for entrepreneurs to become skilled managers.

The first mistake that gets entrepreneurs off track

The first mistake I’ve seen many entrepreneurs make is failing to recognize a key difference between themselves and their employees. As an entrepreneur, essentially you are the business. You’ve likely invested significantly, and in many ways your business is an extension of you as a person.

For your employees, the relationship with your business is very different—at the end of the day it’s a job. They may be extremely dedicated, and regularly go above and beyond the call of duty, but you can’t expect them to take your business as personally as you do because it isn’t their business; it’s yours. In fact, most people who desire that strong a connection with a business start their own businesses.

Understanding this distinction lets you establish a much more productive relationship with your employees.

Understanding delegation vs. abdication

Because it’s your business, you need to keep up your end of the bargain with employees—I call it recognizing the difference between “delegation” and “abdication.”

Many entrepreneurs believe that once they’ve hired staff they can shift tasks entirely off their plates. That’s a serious mistake. Although you may delegate responsibility, you can’t abdicate involvement. You need to maintain enough visibility to ensure that everything is done to your satisfaction, approve all significant decisions, and maintain all critical knowledge about your business.

One example of mistaking abdication for delegation is when a business owner hires a finance manager and fails to maintain his/her knowledge of the company’s finances. This leaves the business open to risk, and can also cause capable employees to feel abandoned because they’re not getting enough direction. I’ve seen entrepreneurs abdicate their responsibility on everything from accounting and finance, to sales and marketing, to technology and operations.

Five steps to being a better manager and getting better results

1.    Establish clear roles and responsibilities—When you decide to delegate responsibility, start by establishing clear roles. Think through each role on your team (including your own) and establish clear job descriptions, responsibilities, relationships between roles, and deliverables for everyone. Although roles and responsibilities may evolve over time, employees must always have a clear understanding of your expectations.

2.    Hire the right person for both today and tomorrow—Many entrepreneurs rush hiring decisions, or hire employees who can’t grow with the company. No matter how urgently you need to hire someone, take the time to do careful evaluations, make sure hiring decisions are fact-based, and consider how the person will grow over the long-term. 

3.    Establish lines of communication and transparency—Effective communication and transparency are the key to successful management. Make sure you have enough transparency to know how well your employees are performing at all times, and that lines of commination are open. This will ensure that you’ve got effective delegation, and that you don’t slip into abdication.

 4.    Provide effective feedback—All employees need feedback. When problems arise you need to provide timely, fact-based, and productive feedback. Many entrepreneurs fall into the trap of delaying feedback, or being overly emotional (and thus ineffective) when giving feedback. It’s also important to give regular positive feedback so that employees know what they’re doing well.

5.    Foster employee engagement—Engaged employees deliver the most value for your business. However, research shows that most US employees aren’t engaged—costing US businesses $350 billion every year. While monetary compensation is an effective motivator for some tasks, research shows that things like creating a shared sense of purpose, providing opportunities for growth, and giving recognition are more effective for fostering engagement.

 I will be leading a workbench at Impact HUB Boulder on Tuesday, April 22nd where I’ll examine these topics, as well as many others, in greater detail. Join us for How to Manage Your Employees So You Get Results and learn skills that you can immediately apply in your business.

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