3 Reasons Entrepreneurs Should Democratize Decision-Making

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Most entrepreneurs start out as solopreneurs, responsible for everything from marketing and product development to accounting. Those who choose the path of entrepreneur likely believe in themselves and their ability to wear many different hats. They’re comfortable being the architect of their success.

However, every entrepreneur reaches the point where if they want to continue to scale the business, they must take on new hires and delegate certain aspects of the business. For entrepreneurs who are used to operating on their own, giving up control can be a challenging transition.

Related: 7 Rules for Entrepreneurs to Delegate Effectively

But the alternative is worse: If an entrepreneur is constantly wrapped up in the day-to-day minutiae of the business, they don’t have an opportunity to fully take a step back, think about things from a macro level, and come up with new ideas and strategies to successfully move forward. Most entrepreneurs, for better or for worse, feel capable of performing many different functions. And while that confidence can be what pushes someone to go into business for themselves in the first place, it can also create blind spots.

Entrepreneurs, no matter which stage of growth their business is in, must be prepared to eventually delegate work to their employees and democratize decision-making. The arguments in favor of doing so fall into three broad areas:

1. Better outcomes

Delegating the day-to-day work to the people who are closest to the action — either those who are most knowledgeable about a given topic or those who have the most direct contact with customers or end-users — drives better-informed decisions and creates more value for the organization. Allowing employees to make decisions about the workstreams for which they are responsible frees up time for entrepreneurs to spend on strategy and other value-added business matters.

However, empowering employees isn’t just about delegating decision-making authority; it’s also about setting them up for success. To make the best decisions, employees need to understand the desired business outcome and the context in which decisions will be made. They also need to have the right training. Entrepreneurs, in short, need to create a culture of trust — a culture based on the idea that employees will make better decisions if they understand how value is created. Everyone within the business, not just the founder or top employees, needs to be aligned with its key value streams.

Related: How to Delegate Better and Become a Great Leader

2. Speed

The second benefit delegation offers is speed. The fewer people involved in reviewing and approving decisions, the less “bottlenecking” occurs and the faster an organization can move. This is especially true for businesses in the service industry, where empowering employees on the ground to deal first-hand and in real time with issues can mean the difference between a happy or disgruntled customer. But speed and agility are paramount in all industries today. Swift decisions made by those with access to the most pertinent information lead to a shorter time to market or a quicker pivot, which can mean the difference between one company’s success … or a competitor’s.

3. Better employee engagement

Employees who feel their leaders trust them, who are given autonomy, and who have “skin in the game” tend to be the most highly engaged. Putting the responsibility of decision-making onto individual employees and teams incentivizes them to learn, cultivate and exercise interpersonal “power skills” like empathy, communication and collaboration. It can help create a culture of accountability; as human beings, we are hardwired to want to “pull our own weight” to not let our fellow team members down. Democratizing decision-making also means giving employees permission to determine which work to prioritize and identify which work doesn’t add value.

As for how to delegate, entrepreneurs can borrow a practice from Agile project management: the sprint. Agile, which has its roots in software development, consists of sprints — short periods of time during which an individual or team completes a specific task — followed by review sessions that answer the questions: What was done? What are the results? Did it work, or did it not work? What still needs to be done?

As an entrepreneur works to scale their business, they should aim to be involved in most functions on this level, focused on reviewing outputs and making sure their employees remain on the right path forward.

Related: Why Your Employees Want You to Delegate

Delegating work isn’t about shirking responsibility; it’s about empowering employees to have a sense of ownership over their responsibilities. This approach serves multiple business purposes — not only driving speed and better business outcomes, but also serving as a beacon to attract and retain employees. It allows entrepreneurs to work on their business, not just in their business.

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