June 11, 2013 12:13 am

Leadership: Art of delegation provides key to success

Sir Richard Branson©Bloomberg

Into orbit: Sir Richard Branson has found talented people to run the individual businesses within his Virgin empire

Entrepreneurship is often presented as the achievement of individuals, defying the odds and proving that their idea or way of doing business was superior to what went before. But there is a problem with this image of entrepreneurial champions, because the world’s most successful companies have never been built on the achievements of just one person.

It is a misunderstanding partly perpetuated by the media, profiling individual founders as if they alone created their companies’ successes. Some of these people no doubt believe their own PR, but the most successful are usually those with enough humility to admit their need to step back from running everything to let others take charge and grow their operations.

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The celebrated British entrepreneur, Sir Richard Branson, may be among the world’s best self-publicists, but he also readily admits that his most valuable skill is an ability to find good people to run the individual businesses within his Virgin empire.

Such enlightenment, however, is usually only gained by a founder through a painful learning process.

In 2001, Julia Langkraehr set up Retail Profile, which helps shopping centres develop new revenue streams by leasing the common areas for start-up businesses to run pop-up shops and promotions.

By 2007, the company was turning over £4.9m, but Ms Langkraehr was feeling burnt out. She had bought the company out of receivership in 2004, and was responsible for day-to-day finance, business development in the home market of the UK and expanding operations into Russia, managing staff and client management.

Her chairman sent her on a three-week holiday to Machu Picchu in Peru, the Galápagos and the Amazon, during which she realised she needed to step back and appoint a managing director. The first left after six months, but his replacement is still with the business. By 2010, Retail Profile was turning over £6.5m, and last year hit £7.7m, with operations in Germany, as well as Russia and the UK.

Ms Langkraehr maintains responsibility for new business, but admits that it was an emotional decision to step back from day-to-day responsibilities. “I had to look at my ego and my work-life balance and the outcome that I wanted and the pros and cons of not doing it,” she says. “But I don’t think the company could have grown to where it is today if I hadn’t changed.”

Shaz Smilanksy, founder of Electrify, a brand-marketing agency in London’s Shoreditch, is at an early stage in this process. Her business, which has run campaigns in the US, Spain, Switzerland and the Netherlands, employs just 18 people. She has started handing over responsibilities to her senior managers, but admits that it is difficult to do this after being hands-on. “The hardest thing I have found about standing back is watching other people make the same mistakes you have made,” she says. “This means as a company, you are making the same mistake twice.”

Dan Sullivan has been helping founders to develop their businesses for the past 25 years through his company Strategic Coach. He claims that all entrepreneurs are sales people at heart, and the mistake of staying in control is often caused by the founder failing to realise that their business will need other skills to grow.

“I encourage entrepreneurs to take a lot of free time,” he says. “It refreshes their brain but it also simplifies their thought processes. They will come away thinking there are 30 things that need doing, but will come back knowing that only five of those are necessary.”

Finding people you can confide in is also important, according to John Mullins, associate professor at London Business School and author of several best-selling entrepreneurship books.

“You don’t talk to the people who work for you, so who else do you talk to?” he says. He recommends joining a group such as the Young Presidents’ Organisation, which has about 20,000 members in 120 countries and a focus on creating better leaders through sharing ideas. “It is a learning challenge,” Mr Mullins says. “Most of us learn most through making mistakes and we learn from others. I don’t think you can get it from school.”

Gerard Burke has been running similar programmes to Mr Sullivan in the UK for several years, first at Cranfield School of Management’s Business Growth Programme and also with Cass Business School, through his course Your Business Your Future.

“By definition, a growing business is changing,” he says. “Yet many founders continue to run and lead their businesses in the same way as they did when they started.”

Mr Burke talks of “heroes” and “meddlers”. Heroes believe they do most jobs better than anyone else.

“Most heroes recognise they should involve other people in management tasks, so they recruit or promote.

“But these new managers don’t necessarily do things in the same way as the founder did, which for many owner-managers means that they are doing them wrong.”

So some heroes slip into the role of meddler. For a business to achieve its full potential, the founder needs to become a “strategist”, he says.

“To trust someone else and to accept that person will do things differently is a major challenge for many. And yet, if the ultimate ambition of the founder is to sell the business or to move away from it and allow someone else to manage and lead it, then this challenge must be met and overcome,” says Mr Burke.

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