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Sweaty Startup

How to delegate the right way and LEVERAGE your time

published30 days ago
7 min read

I've started writing a book, which I'll publish as my first in late 2023 or early 2024. I'm writing it in real time and already have over 170 pages and 50,000 words. Also I'm writing it on a public google document which you can follow along as I write it here.

What feedback do you have? How can I improve? Respond to this email.

I've also started posting long-form content on LinkedIn and I think you might enjoy it more than my twitter account. Check out this post on A players, B players and trying to change people (and why its a fools errand).

As you know, we’ve got 18 employees working at our self storage management company who live in the Philippines. We sourced and hired all of them through SupportShepherd.com. and it has been a game changer.

They do customer service, collections, data entry and even direct customers around our properties to find their units. They are incredibly valuable members of our team that allow us to offer 24/7 service (and more reps) at a low overhead cost. Each employee starts at about $800 per month or $5 per hour.

I’ve personally convinced about 10 of my friends who are business owners to make a hire over there in the past year, and they all have told me it has changed the trajectory of their business and their life. Check out Shepherd today.

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There are two levels of delegating:

Level 1: Delegating tasks

The first phase of any manager or entrepreneur is getting somebody else to do a task for you. Think of a lawn care owner hiring his first employee to run the trimmer. Or an entrepreneur hiring a VA in the Philippines to help with any number of things.

This is scary and uncomfortable to do at first because, of course, you can do it better. There will be mistakes. There will be questions. There will be money lost when they mess up an edit or break something on the job.

When you reach this level of delegation your life begins to open up and you’re basically buying your time back. Somebody else works 1 hour and it saves you 45 minutes. This is the first form of time leverage.

Delegating tasks occur at different skill levels as well. Delegating higher skilled tasks is more uncomfortable. The hardest for me recently was delegating investor calls to my CFO. Instead of me getting on the video conference and pitching our real estate deals for investors, my employee now does it.

It took a lot of training, a lot of work and a very uncomfortable decision to finally just let it happen.

You can run a very large, profitable business with only this level of delegation. All decisions still come to you. All problems still come to you. But you’ll be stressed and you’ll work a lot. Eventually you’ll become a bottleneck inside your business.

Level 2: Delegating decisions

Delegating decisions is the key to truly running a successful company that can grow beyond you.

At this level you give your employees decision making power. They can quote the jobs and name the price. They can select the vendor and sign contracts for people who will do work for you. They can interview and make hiring decisions on employees. They can make compensation and bonus decisions.

And most importantly: They can solve problems.

The first major breakthrough in my business occurred in the spring of 2012, our second year in business.

We were having dinner with our management team on a Friday night during our busy season. One of our team members speaks up and starts telling an elaborate war story about how an employee literally left the job in the middle of the day and left one of our delivery vehicles stranded in the middle of the city.

The employee quit, on the spot, and left.

Nine times out of ten I’m going to get a phone call about that problem. Nick, what should I do?

But I didn’t get the call. My manager got online, looked in our employee database, sent out a group text using our software, and found another employee who could come in and finish the shift. He even made the decision on the spot to offer the employee who covered a $50 bonus that day to reward them for showing up and solving problems.

When the employee arrived they didn’t have the schedule or the equipment needed, and my manager sent that stuff along in another truck that was already heading in that direction.

The entire problem was solved in a matter of about 30 minutes, and I didn’t hear about it.

My mind exploded. Part of me was mad - why wouldn’t he call me when an emergency like this happens? But that feeling was a simple result of my immaturity at the time and it was a transformational experience for me.

From then on when questions came our way or those calls came, we encouraged our managers to think about a solution BEFORE calling us. It didn’t take long until these decisions started getting delegated everywhere.

Another, more impressive breakthrough happened in early 2021.

Bolt Storage, my real estate private equity company, closed on its first deal without my assistance at all.

My team found the deal, underwrote the deal, offered on the deal (that part I simply approved), went under contract on the deal, raised the investor capital for the deal, secured bank financing for the deal, and closed on the property.

I simply printed the closing documents, signed and notarized them, and put them in a fedex envelope.

If you’ve never closed on a real estate deal it will be hard for you to imagine how many moving parts and decisions need to be made. Just going under contract is ca complex negotiation. Then you have to shop banks. Then you create an investor memorandum and send it to a bunch of people with money to try to get them to commit and send funds, and more.

I didn’t do anything throughout the entire process, and I think I accomplished something that very few real estate investors ever have.

The best part:

It was a $9 million deal in Virginia. Our largest single transaction to date.

Back to the art of delegating decisions / problems.

If an employee comes to you with a problem you have 1 of 2 options:

1. Get out of my way, let me solve it

This is the easy way. You are the boss and you are better at solving problems. You know how to do it and just doing it is much easier than teaching this person right now how to do it.

2. Returning the question with a question: how would you solve this problem?

This is the path of most resistance but is the best for your long term success. You’re not going to just let the employee off easy and enable their lack of critical thinking. You’re going to challenge them to think (and get a window into how they think).

When an employee asks me a question, any question, I ALWAYS return it with the same exact question back to them.

I’ll ask them what they would do and why. I’ll ask leading question after leading question. What is the goal here? What would you do? What are the downsides? What are the upsides?

This trains your employee how to think. It creates a teaching moment where they are forced to exercise their ability to make decisions.

A friend of mine calls this the “monkey on the back” conundrum.

When an employee comes to a boss (or you) with a problem, that problem is a giant monkey on their back. As soon as they ask the question that monkey jumps off of their back and jumps right onto your desk. It is now your problem. That monkey is now yours.

You can either send them on their way and keep their monkey and solve their problem. Or you can make sure they walk out of your office with their monkey and a plan to take care of it themselves.

If you take the easy route, which is to keep the monkey and take care of it yourself, you breed an environment within your company where none of your employees know how to care for their own monkeys and they ALWAYS show up on your desk.

Every single problem ends with YOU. You are stressed out and the bottleneck inside your business. Monkeys line up outside your door. The hallway outside your office is like a backed up pipe full of monkeys. Business can’t continue. Decisions don’t get made. Things are slow. And you are living a life of hell.

If you get your employees used to taking care of their own monkeys two things will happen:

1. The employees will get better at taking care of monkeys

Eventually they’ll solve problems without coming into your office at all. Your phone will stop ringing. They’ll start preventing the problems in the first place. They’ll understand the goals of the company and will be good at making their own decisions.

2. You’ll learn what employees are great at making decisions

I promote from within because I know how all of my employees think. They ask me questions and bring me their monkeys and I get a look right into their brain as they solve the problems in their minds. I’m asking leading questions and figuring out how they think.

The sad truth is that most humans aren’t nearly as competent at making decisions as you’d like to believe. It’s why the average American has a $800 car payment but lives paycheck to paycheck. The brain power just isn’t there most of the time.

You’ll learn what employees need to be fired and you’ll learn what employees just don’t think about things the right way. You can try to help these folks and you should, but most of the time its a lost cause.

Every now and then, about 20% of people, will show you that they really think about things the right way. They’ll make good decision after good decision and when you talk through these things with them you’ll be pleasantly surprised by how their mind works.

These folks can then be tasked with making decisions FOR YOU. They can be promoted into management roles so the decisions and monkeys then come to them. It’s a beautiful thing.

Onward and upward,

Nick

P.S. We're seeing the market change fast and know some self storage deals will be presenting themselves over the next 6-18 months. If you're an accredited investor interested in joining our investor database click here.