Authority

Authority is the empowerment to make decisions that are necessary for completing a task. No matter how smooth an operation is, there are always decisions that need to be made to keep things moving forward. The big question is, whose responsibility is it to make those decisions? In most businesses, that responsibility falls on the shoulders of management. After all, that’s what managers are for, right? But is that always the best solution?

Every time a decision is passed upwards, time is lost. Lost time always equals lost income. If it was an extremely important decision then it may be worth it, but more often than not it would be better if the decision could be made on the spot. The fear, of course, is that the wrong decision will be made. But what if you were confident in the decision maker? What if you knew that within a given framework, your people could make their own good decisions? Would you be willing to give them the authority to do so?

Without the proper distribution of authority, responsibilities move up through your organization, overloading management (and often the owner) with decisions that take them away from the strategic work they need to do.

Terry Preston went shopping at “Toys For Tykes” to buy a present for his five-year-old daughter Jenny’s birthday. He found the toy he wanted to buy, but it was the last one on the shelf and was clearly a sample item. He decided to buy it anyway, but since it was a sample, he asked the cashier if he could have it at a discount. “Unfortunately I don’t have the authority to offer you a discount sir,” she said, “I’ll need to call my supervisor.” After a few minutes, the supervisor arrived and Terry made his request once again. “No problem,” said the supervisor, “you can have a 10 percent discount.” So Terry, a little agitated with having to wait, made his purchase and went on his way.

Stories like the one on the left happen frequently. In fact, it happens so often that it seems like a perfectly natural and logical process. After all, isn’t it a supervisor's job to make important decisions? There's an alternative.

Let’s suppose, just for a minute, that the cashier could be trusted to make those kinds of decisions on her own. What would've been different if the cashier could have offered the discount without involving her supervisor? Well, for one thing, it would have saved time. The cashier’s time, the supervisor’s time, the customer’s time, and the time of the other customers who were waiting in line. When you add it all up, that’s a lot of time!

Secondly, if the cashier had immediately offered the discount it would have made the customer feel more appreciated. Why? Because customers like dealing with people who have authority. They don’t want to wait for someone else to come and make a decision. They want to deal directly with the decision maker. It’s faster, it’s simpler, and it makes them feel more important, so why not give them what they want? After all, the value of a happy satisfied customer is enormous!

Plus, giving the cashier more authority would have made her feel better about herself. Empowering employees with authority makes them feel trusted and valued the kinds of feelings that promote confidence and pride in one’s work. It’s no secret that happy employees make better employees, but it’s hard for business owners to give away authority when they associate it with so much risk.

Access to Information

Think about the access to information in your business. In many cases, information that would do more good if it were made available to others. Certainly, some information should be kept confidential, like individual salaries, but all too often information is kept sacred more as a means of control than for reasons of efficiency. Take a serious look at the issue of access to information and decide who should have access to what. Ask yourself, are there good reasons why certain information should be kept confidential? Quite often you’ll find there's more benefit from opening up your files rather than safeguarding them. After all, the better informed your employees are, the better decisions they can make.

What information should you make available to your employees so they can make their own decisions? Should they have access to marketing information? How about financial information? Should they know how well the company is performing in relation to your competitors? You might not be ready to open your books to them just yet, but at least you’ll be heading in the right direction.

Circle of Authority

The circle of authority model provides you with a mechanism to safely give your employees independence. It allows them to “fill the shoes” of their job at a pace they can handle, while providing supervision they need until they are ready. Have you ever noticed when you deposit a large cheque in the bank the bank teller often needs a signature from a manager before it can be deposited? It’s because your cheque is above the amount they're permitted to handle individually. As they gain experience, they're permitted to handle larger and larger amounts of money on their own.

You can use this concept with your business as well. As each of your employees gain experience and demonstrate increased levels of trustworthiness, you can expand their “circle of authority.” Imagine if you could trust your employees to do a good job without your supervision. How much authority would you like them to have and in what areas? The more authority they have, the less time they must spend waiting for decisions from their managers, and the more time their managers will have to do their jobs. There will always be things that require the permission or decision of a manager, but in general, the more authority you can pass down the line, the better. What would it be like...

• If your employees had the attributes or qualities necessary for effectively carrying out their responsibilities?
• If your employees had the training they needed to carry out those responsibilities?
• If your employees had full access to the resources they needed to carry out those responsibilities (including human resources)?
• If there were standardized processes and policies in place to ensure that all jobs were done right, every time?
• If your employees were committed to doing an outstanding job?

What would it be like? It would be the way it was meant to be. The way it can be. The way it's going to be... if you commit yourself to making it happen.

Analyze your situation. If you had complete confidence in your employees, what decisions would you let them make on their own? Pick one position to begin with and list 10 key decisions you would gladly pass on to an ideal employee.

Position:

(i.e. They could make independent buying decisions.)

Circle of Authority Diagram

Once you know how you’d like things to work in an ideal world, determine how much authority, if any, your employees currently have to make independent decisions. Then determine how large the gap is between where things are now and where you’d like them to be. The system of expanding circles of authority will help you address that gap.

What kinds of authority do your employees currently have?

First, define the boundaries that employees will grow into as they demonstrate their ability to handle each new level. What responsibilities will be added as an employee moves from one level to the next? Keep in mind that the number of levels needed may be different for each position. Some positions may need only one or two levels where as other positions may need 10 or 15.

Next, identify the minimum levels of education, experience and competency required for each level so that no one is given more responsibility than he or she is ready for. Your first level will reflect the minimum qualifications necessary for the position. Address positions based on priority and importance within your company first.

You may wish to include any special skills, knowledge, or competencies pertaining to the position as well. Never forget, however, that personality and aptitude are more important than anything else. Your first question should always be, “Is this person a good fit for our company?” If they don’t fit in with your company, it doesn’t matter how much experience they have. In the long run, they’re not going to work out.

Example: Sales Clerk