Want a great business?

One that will thrive for generations?

Allow autonomy.

Jason Cohen, founder of WPEngine, said at a recent talk he gave (quoting someone else), “Approval doesn’t add value.”

Most entrepreneurs don’t allow autonomy in their business.

They institute monarchical-like approval processes for even the smallest of tasks.

They are too scared of loss that they won’t even consider developing checks and balances systems in their business so that employees can run the company.

They are too scared to trust people they’ve hired. Maybe they know they’ve hired the wrong people to run their company. Maybe they hired the wrong people so they could always feel needed and important in their business.

Whatever the reason for not developing autonomy within the organization, entrepreneurs who want to succeed beyond a few million in revenue, must begin to nurture autonomy.

What does autonomy look like?

I’m not talking about abdication — giving up all authority and hoping for the best. So don’t even mentally jump to the extreme of “But it’ll be complete anarchy in my company!”

Autonomy means you hire capable people who get trained (where necessary) and managed (provided the resources & guidance to do their job) then allowed to do that job.

Autonomy is much murkier for knowledge workers (P. Drucker coined term) compared to a factory worker. Once someone on an assembly line has been trained, you can leave that person alone to do the job. QA will be checking to ensure the line is producing widgets up to standard.

Knowledge workers seldom have directly repeatable processes like an assembly line. They have to think up unique solutions to the similar problems on a regular basis.

The more creative a knowledge worker must be to get results, such as an executive, the more autonomy they need. Most ideas won’t work out, but if they have to come get approval to test their concept, the more likely they will reduce the creativity to get something akin to assured success.

Enforcing approval processes reduces potential for breakthroughs.

I’m probably not using hyperbole when I say the reduction is at least 1000X in breakthrough potential.

If someone needs to get approval to move forward, they are most likely going to bring you something they know you’ll approve.

This leads to 1+1 growth, not 1×10.

How do you prevent rogue actors?

Ultimately, you don’t. You can correct rogue actions and remove rogue actors after they’ve shown themselves to be acting in bad faith.

However, how you hire and lead has a huge effect on whether someone believes they could do something that has the potential to be very damaging to the business without consulting with their peers within the company.

Your company culture, from executives to technicians, should have an understanding of what the limits are to pushing the envelope — how much risk variance they have in their role.

Hard limits prevent huge failures, but they also limit huge success.

So instead of developing limits, you must ensure you have a culture of protecting the downside when attempting to acquire upside.

Investors learn this lesson or go broke. They have to take chances, but they also need to protect their capital from catastrophic loss.

To develop this culture, you don’t leap to autonomy. You gradually provide more scope in which each employee can prove they reliably protect the downside while acquiring new upside.

Your executives and managers need to learn to provide room for autonomy, too. They are likely to protect their jobs by requiring approval (micromanaging) with their direct reports.

That’s why I say autonomy is a cultural phenomenon and not a procedure that can be SOP’d.

Start by looking for areas of your business that you can feel comfortable allowing autonomy. Allow more room for action among your team especially in places with limited downside.

Get comfortable letting your team do their jobs before you move into places that really scare you.

If you are worried about autonomy for a particular role you need to analyze why you feel that way. Is it you? Is it the employee? Is it the risk?

What is the risk/reward ratio? Is there sufficient upside to justify the risk?

Most parts of your business are already risk-adjusted since you are actively running a business as opposed to the startup stage.

These areas are easier to allow autonomy. You could do so quickly.

The areas where big gains can be made need more formal meetings to analyze risk vs reward. This is where you and your leadership come together to make the decision.

Your job then is to determine whether the action leads towards the company vision or not. The team determines whether to take the risk based on protecting the downside, but you make the vision decision.