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Entrepreneurs: 3 Clues That It's Time to Delegate

Entrepreneurs tend to be wildly confident. But too often, confidence can mutate into arrogance, and arrogance can blind you to the reality that you need help. The bigger your company gets, the more likely it is that you'll wake up one morning and suddenly realize that your darling baby has grown into an unruly toddler and that you're quickly losing control. You need the entrepreneurial equivalent of SuperNanny: professional managers. So how do you know when it's time to call in the reinforcements?
Nick Thomley, the 30-year-old CEO of Pinnacle Services in Minneapolis, made that decision three years ago when he hired Jill Cihlar as his COO. Pinnacle, which provides home health care, housing, and employment services for seniors and people with disabilities, is now an $11.5 million company and has been on the Inc. 5000 list of fastest growing privately held companies for three consecutive years. Thomley attributes that growth to his new management structure. Here's how he knew it was time to loosen the reins of control so that his company could grow (and grow up):

  • He was avoiding tasks he found unpleasant. "I wasn't dealing with employee issues, like terminating people who should have been let go, or getting employee evaluations done on time," he concedes. And the more the company grew, the more important those responsibilities became. "I needed to realize my strengths -- and they weren't in operations," Thomley says. "After I hired my COO, I had people who I had previously supervised come and thank me." Ouch!
  • He was missing out on new business. Because Pinnacle lacked the organizational structure that any multi-million dollar company should have, Thomley found that he was too busy putting out fires and running the company on a day-to-day basis to think strategically. "We definitely missed opportunities because we just weren't organized enough," he says. Since hiring Cihlar and another senior level manager to oversee the company's case management division, Pinnacle has been able to expand its service offerings and increase revenue by 64% since 2006.
  • He stopped having fun (and so did everyone one else). Thomley had always been proud of his innovative, youthful, and fun company culture. But a growing staff combined with an overflowing in-box meant that Thomley didn't have time to nurture that culture. When he delegated day-to-day control over operations and the company's 80 full time employees and 450 part time service providers, Thomley could once again focus on the fun stuff. The result: a foam pit (see picture, above) into which employees hurl themselves from the second to the first floor ("I went first and found out we needed more foam," says Thomley) and an inflatable Velcro wall (don't knock it until you've tried it). The staff recently took off a day to go snow tubing together, and a Minnesota Twins game is on the schedule for this spring. Thomley has also brought in an acupuncturist and a manicurist for free treatments. He estimates that turnover, which is typically high in his industry, has been reduced by 10% in the past two years.
Now, Thomley is preparing for the changes, and potential growth, that may come from the effect of health care reform on his industry. With a new management structure in place, he feels well positioned for whatever opportunities may come his way. And if there are bumps in the road, he can always pitch himself into the foam pit.

How about you? Do you have a trusted management team? How do these employees change the way you run your company?

Foam pit image courtesy of Pinnacle Services.

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