TL;DR
- Systems determine business success, not talent; build the right systems to ensure your development, sales, and service run smoothly
- When you hire, be sure your candidate has skills that have a place in your company and can contribute to your longterm goals; don’t just hire for a position or a task
- Maintain open communication with employees and provide both positive and constructive feedback for improvement; if they are not performing well, move them elsewhere in the company where their skills will be better put to use
- Spread project execution across a larger group, giving many people the change to contribute and a clear view of how other employees work
- Know what you should delegate and what you shouldn’t; stay in control of your finances and brand
- Don’t confuse delegation and abdication; proper delegation allows you to retain oversight and control, while abdication turns success or failure entirely over to someone else who doesn’t have a vested interest in your company
Recently, I had the privilege of sitting down with Jonathan Cronstedt, President of e-learning company Kajabi. Cronstedt has several successful stints as CEO or founder under his belt, so I wanted to talk about the pervasive problem of bad (or no) delegation in the entrepreneurial world.
To best illustrate the lessons he learned in this arena, I decided to retrace his career steps, starting in his college days…
In the early summer of 2002, Cronstedt landed a sales job at Fletcher Jones Motorcars.
The job was, as he recalls, very regimented: “Everything funneled through the Business Development Center at the dealership, and all of the calls were scripted. It was very systematic.”
That systematic approach was a form of “designed delegation” that ensured sales representatives never left clients in the lurch—a follow-up was always delivered by staff members whose specific job was to maintain communication with prospects and customers.
This model had a huge impact on Cronstedt, who moved on to employ the same systems and strategies in the mortgage industry.
He admits that being on the “receiving” end of these marching orders made him bristle initially. But that might just be a characteristic of the sales industry: “I think sales people in particular don’t like to be told what to do,” Cronstedt said. “They think it’s their talent, not the systems they work with, that makes them successful. But they very quickly begin to realize, as I did, that it’s the systems, not the talent, that make the sales.”
This team-based approach to success was also key to Cronstedt’s successful leadership at Independent Financial Mortgage, just a few years after he left Fletcher Jones. But there were differences, too.
For instance, the Business Development model at Fletcher Jones would never have allowed managers to dip into sales, even if they were technically in charge of sales reps. For Cronstedt, that didn’t quite fit in the mortgage biz.
“Even when I built and managed teams to handle increased work, I never stopped originating loans myself. You need to know how to do something yourself before you delegate it,” he explained to me.
That led me to another question in Cronstedt’s meteoric rise: Scaling is great, and so is staying connected to the day-to-day work, but how do you know when it’s time to bring on new talent?
“When you run out of hours in the day,” he said, succinctly. “If you can’t continue to achieve individually, you’re going to have to find a way to scale the performance to meet the goals you’ve established. That comes through systems improvement or people improvement—preferably both.”
Cronstedt is quick to point out, however, that as he moved from auto sales to mortgage and beyond, what became clear was the need to constantly evaluate the systems and workload across the company. It wasn’t a quarterly thing—it happened every day.
A lot of the reshuffling of work hinged on a very simple question that Cronstedt regularly asked himself: “What tasks that don’t require higher-level skills or training can I take off the plates of senior employees and managers? How much more could they accomplish if they didn’t have to worry about those things?”
This kind of delegation touched on his own workload, as well. “Fortunately,” he said, “letting go has never been hard for me. I was more than willing to turn tasks over to someone else—if that helped the systems work as they were built to.”
“I think entrepreneurs have a hard time letting go,” he continued. “They’re too connected to everything. And even when they do, they often don’t have systems in place to set their employees up for success. So, their employees fail and the whole thing becomes a self-fulfilling prophecy. ‘See,’ they say, ‘I knew I should never have delegated that work.’”
So, I echoed, the systems make or break the company.
But there’s another way to ensure an employee is set up for success, he added: Hire the right people.
Easier said than done, of course, but that’s why there’s a system in place for hiring, too. “If we hire well, we’re confident in a candidate’s abilities. We won’t leave them hanging, even if they’re not being successful. We’ll try to find another place in the company where they will be successful.”
For Cronstedt, the guiding metrics for a successful sales hire were easy to define. But not every role can be judged easily by hard and fast numbers. Still, he argues, you need to put numbers to the hiring process—you need to be able to say, “I’m hiring this person to have X measurable impact. That means they need to have Y qualities or credentials and have accomplished Z in their career.”
At this point in our discussion, I played devil’s advocate, curious how the system would work in Cronstedt’s mind if the employee believed that he or she wasn’t being given the right kind of opportunity. “What if you place them somewhere that you think is a good fit, but they disagree?” I prodded.
“Feedback should be open,” he answered. “But that goes both ways. Take Netflix, for example. They managed to successfully move from their DVD model to streaming video and hire incredibly talented individuals while operating in a Silicon Valley world where the benefits war was often unsustainable. How? Well, one of the reasons is their open communication. If you do a good job at Netflix, you’re going to know. And if you’re doing a crappy job, you’re going to know—and know quick. That’s true across the company.”
This regular check is what keeps employees on point, and identifies mismatched skills and tasks as soon as they start to drag down performance. It also creates a culture of affirmation for employees that are very successful.
But that kind of feedback has to be bi-directional, Cronstedt says. At Kajabi, he has instituted an open-door policy for the company. This gives employees and managers the opportunity to address both good and bad performance right away—and find a fix. No more holding on to these problems for yearly reviews (that may or may not happen).
And there’s an even more ingenious way of keeping responsibilities visible across the company: Spread product execution across the organization—without siloing tasks that leave coworkers in the dark about other employees’ productivity. Cronstedt says it’s far better to spread a project across a group instead of leaving it to a single person or only a few people. Not only does this promote collaboration, but it gives employees a sense of what other skills are employed across the organization. With an open door communication policy, they can always go to the boss and say, “I think my skills could be better used here.”
“What about being a manager of managers?” I pivoted. “How involved are you still in the daily workings of the company so you can effectively train managers to lead a productive, efficient team?”
“I let a lot of it go,” he told me. “What I’ve found is that getting my hands dirty with day-to-day tasks as I’m training or guiding a manager doesn’t really build rapport or help them succeed. I like to think of it this way: ‘I’m hiring you to do this job, but I’m going to set up guardrails to make sure you are successful.’” When the right time comes, Cronstedt says, the guard rails come down.
Again, he points to the delegation issue with entrepreneurs. In some cases, as mentioned before, entrepreneurs who are emotionally connected to their entire business have a hard time letting go of work and don’t set employees up for success when they do.
But other times, they delegate eagerly—without really knowing what or why they’re delegating. Cronstedt mentioned advertising as a common example.
“A lot of entrepreneurs I know will delegate Facebook advertising, but they’ll have no idea what the outcomes should be, what their desired ROI is, or what time investment is involved. Now, I’m not going to set up a Facebook campaign myself as president or CEO of a company, but I know where it fits in my business model and I know what to expect from a given investment. Many entrepreneurs don’t, so they’ll fire an ad consultant or employee after a short period of time just because they’re not getting the results they want.”
I might have dug a bit deeper on this point, asking Cronstedt what specific areas entrepreneurs tend to delegate in ignorance, but I thought it best to close with a pointed question about 2018 delegation tips for those eager to launch their own companies.
“What is timely advice would you give ambitious startup owners in 2018?” I asked.
“First, don’t delegate things you don’t understand. Second, know what you should delegate and what you shouldn’t. For example, I think delegating accounting is great, but delegating the checkbook is not. If you’re not on top of the finances of your company and you’re assuming somebody else is going to mind the store, that’s a huge gamble.”
“Also,” he added, “I think outsourcing marketing is one thing, but outsourcing the establishment of your brand/story is not something I would let another person do. That’s yours.”
Cronstedt closed on a note of caution: “Be aware of the difference between delegation and abdication,” he said. “If you are delegating properly, you have some level of strategy in mind—some responsibility, oversight, and monitoring of execution. You start abdicating when you think things like, ‘Oh, I hired that person, so now I don’t need to touch it ever again.’”
During our conversation, Cronstedt mentioned several resources for entrepreneurs and startup owners that are helpful for management, organization, and delegation. Here’s a summary of those resources:
- On organizational communication and culture: “Powerful” by Patty McCord
- On productivity: Ari Meisel (arimeisel.com)
- On organization and efficiency systems: “Work the System” by Sam Carpenter
- On management and solution-building: “The Goal” and “Theory of Constraints” by Eliyahu M. Coldratt
- On successful routines and productive habits: “The Perfect Day Formula” by Craig Ballantyne (FREE)
For more information about Jonathan Cronstedt and Kajabi, visit newkajabi.com.
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