Why Entrepreneurs Often Become the Bottleneck in Their Own Business

Research & Sources / Entrepreneur Growth

Turn a full bottle of water upside down. The bottle is big, the water is plenty, and still it comes out slowly, glug by glug. The problem is not the bottle and not the water. It is the narrow neck at the top. In many growing companies, that narrow neck has a name, and it is the name of the person who started the business.

Why the neck exists

At the beginning, the narrow neck is a good thing. When a company is small, everything should go through the entrepreneur. You know the clients, you know the product, you know where every euro goes. Decisions are fast because one person makes them. Quality is high because one person checks everything.

Then the business grows. More clients, more people, more questions. But the neck stays the same size. Every quote still waits for your approval. Every new hire still needs your interview. Every client problem still lands on your phone. The bottle got bigger, the neck did not.

From the inside, this does not feel like being a bottleneck. It feels like being important. It feels like being needed. Your calendar is full, your phone is busy, people keep saying “I just need you to look at this quickly.” That is exactly what a bottleneck feels like from the inside.

The one-lane bridge

Here is another picture. Imagine a busy town connected to the rest of the country by a single one-lane bridge. Every truck, every car, every bicycle has to cross it. In the morning there is a queue. In the evening there is a queue. The town does not lack roads, cars or drivers. It lacks a second lane.

Now imagine the bridge keeper insists on personally checking every vehicle. The queue gets longer. The keeper works harder and harder, starts earlier, finishes later, and the queue still grows. The keeper is not lazy. The keeper is the reason for the queue.

What the research shows

Noam Wasserman, then a professor at Harvard Business School, studied 212 American start-ups for an article in Harvard Business Review called “The Founder’s Dilemma”. He found that most founders eventually give up the CEO role, often earlier than they expected, and often not by their own choice. By the time their companies were three years old, about half of the founders were no longer CEO.¹

Wasserman describes the choice behind this as being “rich” or being “king”. Founders who insist on keeping control of everything often build smaller companies. Founders who share control and bring in others can build larger, more valuable ones, but they decide less themselves. There is no right answer for everyone. But there is a wrong answer: drifting into one of them without noticing.

A second set of findings explains why the neck matters so much for the people around you. Gallup, which has studied workplaces for decades, found that managers account for at least 70 percent of the differences in how engaged teams are.² In a small company, the entrepreneur is usually everyone’s manager. If you are stuck, they are stuck. If you are overloaded, the whole team feels the weather.

Gallup also found that people who use their strengths every day are six times more likely to be engaged at work.³ Think about what that means for a bottleneck. Every task you keep for yourself is a task in which somebody else does not get to use their strengths. You are not only slowing the work down. You are quietly taking away the part of the job that would make your people grow.

How to widen the neck

The fix is not to “delegate more” in general. That advice is too vague to act on. The fix is to look at what actually flows through you, and then decide on purpose which parts need you.

Sort what crosses your desk into three piles. Things only you can do (for example a key client relationship, the long-term direction, certain hires). Things you do well but others could learn. And things you do mostly out of habit. Most entrepreneurs are shocked by how big the third pile is.

Replace your approval with a rule. Instead of approving every discount yourself, write down when a discount is fine. Instead of checking every proposal, write down what a good proposal must contain. A rule can be in ten places at once. You cannot.

Let the first version be worse. When someone else takes over a task, it will often be done a little differently and sometimes a little worse at first. That is the price of a wider neck. In most cases it is far cheaper than the queue.

Move from doer to designer. Your job is slowly changing from doing the work to designing how the work gets done. That is not a loss of importance. It is a different kind of importance.

A quick test

Ask yourself one honest question: “If I were unreachable for two weeks, what would stop?”

Write down everything that would stop. That list is the shape of your bottleneck. Some items on it are fine; they really need you. But most entrepreneurs find several things on that list that only stop because nobody else was ever allowed to do them.

What this means for you this week

• Run the two-week test on paper and write the list.
• Pick one item from the “out of habit” pile and hand it over completely, including the right to decide.
• Write one rule that replaces one of your approvals.
• Count your interruptions for one day. Every “can you quickly look at this” is water waiting at the neck.
• Ask your team where they wait for you most. They know exactly.

The bottle is not too small. The neck just needs to grow with it.

Sources

1. Wasserman, N. (2008). The Founder’s Dilemma. Harvard Business Review, February 2008. hbr.orgStudy of 212 American start-ups: most founders give up the CEO role, about half within three years, and founders face a trade-off between control (“king”) and value (“rich”).
2. Harter, J. & Adkins, A. (2015). Employees Want a Lot More From Their Managers. Gallup. gallup.comManagers account for at least 70 percent of the variance in employee engagement scores.
3. Sorenson, S. How Employees’ Strengths Make Your Company Stronger. Gallup. gallup.comPeople who use their strengths every day are six times more likely to be engaged on the job.