Avoid Being The Single Point Of Failure In Your Business

On 30th November you might have seen one piece of news trending above everything else. Especially on Twitter, funnily enough. It was of course the day Twitter’s CEO, Jack Dorsey, announced he would be leaving his role. Not only that, but he’d be fully exiting the popular social platform he’d founded back in 2006. When he tweeted confirming his plans, one of the reasons behind his decision seemed at odds with the reality of the next steps. Being a founder-led business, he indicated concerns that he was a potential “single point of failure” within the Company. In a nutshell he suggested, because of his huge influence over the business, if he ever dropped the ball there would be big trouble ahead. However, with a new CEO taking over, surely that baton has simply been passed on? Of course, Jack will be staying on at Twitter until May 2022 to help ease the transition. This is something many business owners do when they conclude an exit. It makes perfect sense to have a decent handover period to ensure the process runs smoothly. It does beg a rather large question though. As a CEO/Founder, how do you make sure the show goes on whether you’re around or not? Here are 3 of the top things you can do to avoid becoming a possible single point of failure within your business: 1. Aim to make yourself redundant I totally get it. Your business is your baby. You’ve poured in blood, sweat, tears, and endured more sleepless nights than you care to remember. All in search of success. Making yourself redundant is extremely difficult to do. Indeed, to do it well will take a lot of planning. It can be done though. Building a strong senior leadership team around you, with each person having complementary strengths and weaknesses, can be a great way to make sure your day-to-day activities can be handled by other people. Trust is key here. You need to let go of certain tasks. Allow other people to come up with, and implement, change and transformation ideas. Ultimately, you need to stay out of the way as much as possible. You never know, with the right people in situ, the collective leadership group could prove more effective than having a lone CEO. 2. Merge the business with a competitor The most direct way to ensure you’re no longer a single point of failure is to join forces with another business already doing what you do. This also gives you more options in terms of whether you conclude a full or partial sale, which can be tailored to your personal circumstances. By bringing two leadership teams together, you’re adding commercial and operational brainpower rather than taking it away. This can almost instantly remove the risk, pressure, and necessity, of you personally being responsible for all major business decisions. As that risk reduces, you’ll find there’s less likelihood that the business will stagnate in terms of creativity. The efficiency savings of pooling resources can also contribute effectively towards growth plans and increased profitability. Great news for the bottom line if you decide to exit in the future. 3. Find a synergistic business that wants to be in your space If you’re fundamentally happy working in your business and want to stick around imparting your pearls of wisdom, this could be a great option for you. By merging with a complementary business, rather than a direct competitor, you could extract some immediate value from the Company prior to a full sale in the future. Similar to merging with a competitor, this will bring two leadership teams together, removing the idea that you personally would be a single point of failure. By doing this you’ll strengthen your business for all that’s ahead. There is one major consideration though. Do you have specific expertise that the buyer/investor requires? If so, they’d need to be satisfied that your specialism is covered before a full exit could occur. In conclusion… There’s no right or wrong answer here. It’ll certainly be interesting to see how Twitter moves forward without their inspiring leader. Will the changes at the top genuinely nullify the risk of him becoming the “single point of failure” he fears? Time will tell. If, as a business owner, it’s something you’re concerned about, hopefully this article has given you some food for thought. In addition to a full sale and exit there are plenty of other options available, should you want to safeguard the business’s future whilst also releasing some equity. A partial sale, joint-venture or merger could work well for you. If you’d like to discuss any of this in more detail, please email tony@vexus.co.uk