In the grocery business, many chief executives grew up in the industry, gradually adding more responsibility as they learned by doing.
But to develop the next generation of leaders and encourage innovation, executives must learn to delegate, giving others a chance to make mistakes and create better ways to handle routine tasks.
"No executive no matter how competent he or she is can possibly do everything themselves," says Marlene Caroselli, author of "The Language of Leadership." "It's bad for the corporation when someone is trying to do everything, but it's also bad or demoralizing for the staff members who aren't given a chance to expand, grow or [experiment] with a new concept or proposal."
Delegation is rarely as simple as it sounds. Executives by their nature often loathe giving up control, experts say. Even when they assign a job, they might insist that it is carried out exactly as they specify, leaving their charges with little room to deviate from the existing process.
This form of command-and-control management runs the risk of stifling new ideas, while failing to help workers assume more responsibility, Caroselli says. Over time, employees might grow weary of what they perceive to be dead-end jobs and look for more fulfilling work elsewhere.
Ultimately, CEOs are responsible for modeling leadership, and that includes establishing a culture that supports effective delegation, says Nancy Eberhardt, chief executive of Pathwise Partners in Richmond, Va. "If people are in a culture that says no mistakes, that's harder to have a delegation mentality," she says. Instead, executives should cultivate a workplace where communication is stressed, so mistakes can be discussed openly and corrected early in the process.
Companies don't always recognize the connection between management approach and retention, nor do they put a priority on management training to help supervisors become better leaders. But new research suggests they should.
Linking HR to Financial Performance
The best companies to work for also tend to outperform the S&P 500 over time, according to Boston Consulting Group's report, "Realizing the Value of People Management." The share price of companies selected from Fortune magazine's "100 Best Companies to Work For" list outperformed the S&P 500 by 99 percentage points over the decade ending in 2011.
Companies emphasizing human resources also tend to grow their revenue faster than those that don't, according to a survey of 4,288 managers by Boston Consulting Group and the World Federation of People Management Associations. Companies that rated themselves as capable in managing talent achieved 2.2 times the revenue growth and 2.1 times the profit margin compared with those who gave themselves low capability ranks. Similarly, companies that emphasized leadership development achieved 2.1 times the revenue growth and 1.8 times the profit margin of their less-capable counterparts, the survey indicates.
The high-performing companies made talent development a priority and encouraged open discussion and frequent informal reviews to motivate employees, the reported indicates.
Delegation is an important management characteristic for leaders of any business, but it might be more problematic in the food industry because many CEOs were promoted internally and know how to do every job, Eberhardt says. "It makes it more difficult for them to delegate when they can see a right way [of doing a task]. They get more engaged in the process of how someone is doing it," which can be counterproductive, she says.
The more CEOs can delegate work to others, the more time they will have to focus on hiring the best talent and setting strategy and vision, Eberhardt say. When Eberhardt coaches CEOs, she points out to them, "Every time you say yes, you're saying no to something only you can do."
It takes confidence for executives to relinquish some control and allow others to assume responsibility for a task, Caroselli says. Often, new managers might think it will be easier to handle a problem themselves than take the time to train an employee how to manage it. But that's not effective over time because the employees don't receive the chance to develop greater responsibility. "Never tell people how to do things. Tell them what has to be done and they will always surprise you with their innovation," she says. To avoid unpleasant surprises, or a failed task, check in with the employees to ensure they aren't going down the wrong path. Make adjustments as needed along the way.
Another important aspect of delegating is encouraging employees to communicate their progress, Eberhardt says. CEOs can do this by setting up an accountability process. "The subordinate is learning how to keep the CEO informed. Subordinates don't always know that information for a CEO is like oxygen," she says.
Executives also will have more confidence in delegating when they trust the people they're assigning tasks to, says Roberta Matuson, chief executive of Matuson Consulting in Florence, Mass. "It comes down to making sure you have the right people. If you're really good at selecting your team, then letting go is easy," says Matuson, author of "The Magnetic Workplace: How to Hire Top Talent that will Stick Around."
Executives can improve the odds by understanding the traits of successful managers and seeking candidates with those characteristics, Matuson says. Ask how they handle pressure, how they motivate others and whether they like to delegate, she says. While many companies receive most applications over the Internet, Trader Joe's holds open-application days when it opens a new store, providing the retailer with a glimpse of candidates' enthusiasm.
While CEOs might understand the importance of surrounding themselves with the best talent they can find, they might not recognize the extent of the knowledge among existing workers. By opening lines of communication with all employees, CEOs can see where the strength of talent lies.
The people closest to the front lines generally know the process better than anyone, and they're often in the best position to come up with ways to improve operations if they're given the chance. "The guy in the butcher department knows the intricacies [of the department] infinitely better than the owner of the grocery store could ever know," Caroselli says.
To encourage employees to come forward with suggestions that could help the company, top executives need to welcome them with an open-door policy. "Danny Wegman [CEO of Wegmans] is the kind of executive who does encourage input from his employees, some of whom are 16 years old, working at part-time jobs. They wouldn't of course make a phone call to an executive," Caroselli says. But Wegman makes a point of reaching out to them because they are interacting with customers.
By listening to employees, executives are accomplishing more than garnering feedback and ideas from employees. They're also providing a form of recognition, which can keep workers motivated, Eberhardt says. "I see in young people, and also other people, they want that job to be bigger than the details of the day. They want to work in a culture that rewards their work and appreciates them," she says.
Two-way communication also builds trust, experts say. Delegation should include asking questions and listening to answers instead of barking orders, says Joe Laipple, senior vice president of strategic services at Aubrey Daniels International in Atlanta. He recommends managers start meetings by asking participants, "By the end of this meeting, what will we accomplish? What will we share or decide?" Then, follow up at the end of the meeting by asking, "How did we do?"
Meetings and discussions don't have to be lengthy to be effective. Managers can prevent problems from occurring by having three-minute conversations every day with employees, Laipple says. In that short amount of time, managers can recognize what workers accomplished the day before, encourage them to replicate it and approve the path they're on or offer an alternative.
To help develop employees for more responsibility, make career progress an ongoing discussion. One of the most effective questions supervisors can ask their charges is, "What is it I'm doing that you would like to do next," Eberhardt suggests. Then delegate it.
The ASTOR Way
Author Marlene Caroselli recommends the ASTOR approach to effective delegation, with each letter of the word identifying a step managers need to take:
WHAT NOT TO DELEGATE
High-level executives should hold some sensitive tasks close to their vest. For example, legal matters, security matters and HR matters should be handled discretely, often by the CEO or his or her inner circle, leadership author Marlene Caroselli says.
Freelance business journalist Ann Meyer serves as senior editor of Retail Leader magazine.