Human Resources

Giving Up Total Control: A Lesson in Delegation

When Girija Bhavaraju joined her family's business seven years ago, the 34-year-old entrepreneur took the kind of action that many other newly minted business leaders have done: She micromanaged her staff. "At first, I thought the only way to manage my family's company was to police and control my employees," says Bhavaraju, who, with her husband Sai Bhaskar, runs Sri Sathya Sai Designing Studios Pvt. Ltd. in Khairatabad, a suburb of Hyderabad, India. The 10-employee company offers graphic design, printing and advertising consulting services. "There was really no delegation of duties," she adds. "Instead, I tried to control each process and of course ended up with almost no control, and no time to plan for the company's future. It was truly a suffocating experience."

That changed when Bhavaraju enrolled in the Women's Entrepreneurship and Leadership program, or WEL, sponsored by Goldman Sachs and taught at the Indian School of Business (ISB) in the Gachibowli section of Hyderabad. "The WEL program enabled me to understand that I can't be every place at once," she said. "As a manager, I have to guide people, not do their job for them. When I let my employees do their job, I have more time to build the business's strengths through reviews and planning." She also has more time to network as a way to increase the company's customer base.

Learning to Trust

Bhavaraju's reluctance to delegate responsibility is not unusual, according to A. Srinivasa Rao, program director at the Indian School of Business's Center for Executive Education in Hyderabad. "These women entrepreneurs typically run very small businesses, with annual sales ranging from 5 to 50 lakhs [about $US10,000 to $US100,000]," Rao says. "Since their business is so small, they usually have a minimal number of staff, and their low profit margins often restrict them to hiring semi-literate people who may initially need a lot of supervision. This can be a challenge for the entrepreneur, who often responds by exercising a great deal of control over even the smallest functions."

Armed with the knowledge she gained through ISB training, Bhavaraju began to take small steps aimed at developing her employees' skill sets so she could entrust them with more responsibilities. "I started out by giving them small tasks, and encouraged them to take on more responsibility as they demonstrated their ability to handle it," she says. An additional incentive to succeed was an offer to increase her employees' salaries as they took on more authority. The changes were not limited to line workers. "As part of the new approach, I have delegated taxation and audit responsibilities to our accountant, who previously only handled the daily accounting tasks."

Adapting the new approach was a process that required Bhavaraju, as well as her workers, to accept change. "It was not easy in the beginning because I had to first learn to trust my employees," she says. "But I ranked the tasks by their contribution to the company's success, and I learned to set reasonable targets for my employees."

Besides the prospect of more money, Bhavaraju praised the workers for their successes and, in the event of failure, sat with them and worked through the process to pinpoint any errors. "I escalate the responsibilities of each employee on a step-by-step basis, with each escalation of responsibility depending on the successful performance of their existing tasks," she notes. "I also keep them interested by ensuring that an individual is not doing the same work for a long period. I keep adding responsibilities and challenging tasks, once they prove that they are able to successfully perform the previous job."

Risks and Rewards

This strategy brought about a shift in the employees' own approach to their tasks, according to Bhavaraju. "It made them into mini-managers instead of just executing their tasks," she says. "At the same time, the employees have to prove themselves. I find that a person with a good spirit, a positive attitude combined with commitment and enthusiasm will usually succeed. I try to get them to understand that they grow only if the organization grows."

The revised approach has been in place for about five months, and Bhavaraju says she already sees improvements in her company. "People are operating more efficiently, so there is some profit improvement, though nothing dramatic just yet. But now I'm able to devote more time to longer-range planning, which will help our business to grow locally and, I hope, internationally."

Successful delegation, however, has a price. "There are a number of risks," Bhavaraju cautions. "For example, as our workers become more skilled, they may approach our clients directly and solicit assignments from them. Also, as each worker takes on more responsibility, a small mistake on his or her part could cost the company money, and could cause us to lose the trust of the client. Finally, we are facing some manpower challenges, as our staff gains expertise and then start their own companies or they get hired by other companies."

Despite that, the benefits outweigh the added challenges, Bhavaraju says. "I know now that if we want to grow, we have to delegate responsibility," she says. "We cannot cling on to the old way of doing things and still try to scale up our operations."