In this economy, employees, inventory and business models have been streamlined aggressively. Business owners are doing a larger percentage of the daily workload.
One problem is that small-business owners are failing to analyze and delegate work more effectively. For entities to expand, thrive, hire and survive, owners must create operational capacity and create windows of customer-service time.
As a growth strategist and turnaround manager, I have led organized and chaotic business owners to use fundamental activity-based costing methodologies and delegation metrics toward value innovation.
Profit is more realistically discovered by delegating “–B” and “–C” activities, tasks that detract from owner/present, owner/managed contribution margins.
This simple framework (+A –B –C +D = New Capacity) is explained and illustrated below.
- “+A” activities are tasks, interaction, transactions or processes that a business owner MUST be involved in exclusively for the company to succeed. In other words, Picasso could not delegate painting to anyone else. How many items on your to-do list are clearly +A activities? Expressed differently, what percentage of your daily tasks is unable to be performed by anyone else?
- “–B” activities are tasks that business owners can carefully train and supervise, yet after thorough examination, a trusted employee can perform as well or better than the owner. Master chefs succeed because they have excellent preparatory chefs. How many items on your to-do list are clearly –B activities? What percentage of your daily tasks have you been too stubborn to delegate to a well-trained employee?
- “–C” activities are tasks that a business owner should be scolded for doing –– not because these tasks are menial but because they must be completed by someone else. Nondelegated tasks rob business owners of profit-producing capacity and customer-service time. Hypothetically, Picasso could have cleaned his brushes, made his lunch or organized his studio space. How many “–C” activities are on your to-do list?
Here is where this (+A –B –C +D = New Capacity) framework becomes more interesting.
- “+D” activities are opportunities hidden among tasks delegated too foolishly. Today, Picasso might have delegated the sale and delivery of his paintings to agents, galleries or via the Internet –– or would he?
+D tasks might be defined as critical touch points whereby your small-business brand and core value come into direct contact with key customers at critical operational intersections.
Staples exemplified +D strategy well in the 1980s. Freshly minted Harvard University MBAs were hired to join the expanding company as store clerks and cashiers. Staples placed them at the front lines of customer service, long before working their way into corporate ranks. Impressed customers? You betcha.
How many items on your to-do list might be +D activities in disguise?
Once you’ve exhausted the +A, -B, -C and +D task analysis of your workload — expressed as percentages — the next step is to maintain a 30-, 60- and 90-day analysis of your daily to-do list metrics collectively –– or delegate it to a trusted assistant or consultant.
Entrepreneurial doctors, dentists, lawyers and accountants offer one or two evening or weekend appointments each week. By delegating legitimate –B and –C work to trustworthy employees during business hours, professionals have created capacity and extra time to serve patients or clients unseen during the workweek –– and often for a premium. More profit? Indeed.
The important take-away is that profit can be found inside small-business models by delegating –B and –C activities more and proactively engaging +A and +D activities more.
How many more masterpieces could you create and sell this year if your small-business model discovered 10%, 25% or even 35% more latent operational capacity and time?
Baron Christopher Hanson is the principal and lead strategist at RedBaron Advisors in Charleston, S.C., and Palm Beach, Fla. A former rugby player, Harvard graduate, and expert on workplace and small-business turnarounds, Hanson has written for Harvard Business Review and SmartBrief considerably. He can be reached for consulting roles and speaking gigs via e-mail or over Twitter @RBC_ThinkTank.