Are You Bottlenecking Your Business?

Neal Furlong, ChFC^®, CEPA^®, CLU^®
Senior Wealth Advisor

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As you grow your business, you will likely make the biggest, most important decisions about the trajectory of your business. But sometimes, this can create bottlenecks. Your business may require you to delegate more responsibility to others for one simple reason: You are only one person. 

However, when delegating tasks, you may want assurance that the person you are delegating to has the ability to complete the task in ways that benefit your business. How can you identify those people? And how can you attract them to your business if you currently don’t have them?  

In this article, we will define what a key employee is, provide examples of how they can benefit your business, and show you why key employees are so important to prevent business bottlenecks.  

What Is a Key Employee?  

A key employee is someone whose presence has a tangible benefit for the business and whose absence has a tangible negative effect on the business.  

This goes beyond just having good employees. A good employee will show up, do their job sufficiently, and not make waves. A key employee is someone your business cannot do without.  

For many small businesses, the most important key employee is the owner. But other examples of key employees include rain-making salespeople and operations specialists: people whose skills in a given niche can give you a competitive advantage. 

How Key Employees Benefit Your Business  

Key employees remove some of the strain and responsibility that you have as a business owner. When your business has key employees, you may find that there are fewer critical elements of running the business that fall solely on your shoulders.  

For instance, you may have founded your business with a sales background and have the skills and relationships to close big deals for your company. But going back to our initial claim—you are only one person—means that even if you are the best at what you do, there’s only so much time in which you can do it. This could mean missed opportunities and burnout for you if you try to do everything yourself.  

If instead your business had a key employee who also excelled at sales, it could help you delegate certain work to that key employee while you focus on the most essential sales functions within your business. In this example, a key employee could help you expand your opportunities for growth.  

Identifying Key Employees  

Identifying key employees is more challenging than it seems. It often goes beyond identifying who’s doing a good job. Many good workers are not key employees, and some good workers have no desire to become key employees.  

The traits that constitute a key employee for your company will be unique to your company’s needs of course. But there are certain traits that many key employees have regardless of business or industry:  

1. They consistently exceed expectations.  
2. They openly request more responsibilities and challenges.  
3. They come to the table with ideas for how they can use their specialties to benefit the company. 

The challenging part of identifying internal key employees is all the other responsibilities that a business owner has in running the business. But if business owners fail to identify these key employees, they may lose them. 

Many business owners identify key employees at the worst possible time: after those key employees have left the company. Only after these employees leave do many business owners realize just how crucial their presence was to the business’s success. Replacing key employees after you’ve lost them is exceptionally difficult. 

The good news is that you can leverage an Advisor Team to help you identify, recruit, and retain key employees. Your Advisor Team can help you create plans to attract them to your company, keep them both challenged and engaged, and help take some of the work off your plate, which could give you more time to seek out growth opportunities for your company. 

Breaking Up the Bottleneck 

As a business owner, you may believe that it is your duty to make the final decision for everything related to your company. But as your company scales, so too will the number of people required to make decisions at your company.   

When you are the only person who has the authority to make final decisions at your company, it leaves very little wiggle room for you to adjust to unexpected events.  

For instance, if you were to face a long-term family emergency that required you to be away from your business for an extended period of time, how would you respond? Who are your trusted people at the company?  

Identifying internal key employees, or enticing external key employees to join your company, can help you create a safety net of employees who can keep the business running when you cannot. When key employees have the authority and trust to make decisions, it can create operational efficiencies and reduce the likelihood that everything relies on you. 

Don’t Go Too Far 

In addition to identifying key employees, it’s also important that you don’t overwhelm key employees with responsibilities that are too big for them.  

An interesting caveat about key employees is that though they may have the ability to make the kinds of decisions business owners make, not all of them want to become business owners. In many cases, key employees like being good at the one thing they’re good at, so asking them to take on responsibilities that they aren’t prepared for can overwhelm them and scare them away.  

On the other hand, some key employees do want bigger responsibilities and do have their sights set on a bigger role in the company. By not giving these employees more responsibilities and challenges, you also risk losing them.  

Fortunately, your Hightower Signature Wealth team can help you come up with strategies and written plans that help identify key employees, motivate them to take on more responsibilities, give them a path to leadership if they desire it, or keep them stimulated in their role if they have no desire for leadership or ownership in the future. Threading the needle between what your business needs and what your key employees are capable of is a challenge, but successfully confronting it can differentiate your business, especially in a tight labor market, and help reduce business bottlenecks. 

We strive to help business owners identify and prioritize their objectives with respect to their businesses, their employees, and their families. If you have questions on this topic, we can help with more information or a referral to another experienced professional. 

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This is a fictional situation. Specific financial advice references provided herein are for illustrative purposes only and are not representative of decisions that have been made since the case study was published nor of decisions that would be made in the future. Advisors’ services, investment strategies and conditions for accepting accounts may vary.