The Pay Cut That Grew a Company

Your favorite tasks is likely your biggest bottleneck. Especially if you are an owner/operator type.

Ali Khataw learned that from a man he admired and a round of golf he lost. Ali is the CEO of Encotech Engineering Consultants and a fellow Round Rock Chamber board member. When he sat down on Rock Solid, I expected a story about engineering and photography. I got a better one about a pay cut. You can read more about Ali’s background at UT Austin.

The Question Nobody Wants to Be Asked

Ali started Encotech in 1990. By his own account, the firm hit a wall at about 12 people. He was designing buildings, running the firm, and wondering how to spend his time.

At the time he sat on the Goodwill Industries board with its CEO, Jerry Davis. Year after year, Goodwill’s numbers kept doubling. Ali wanted to know how. So he asked Jerry to play golf. Ali says he played badly and Jerry played well, and Jerry kindly made him look good anyway.

Then Ali told Jerry the truth: he had no idea what to do next. Jerry’s answer was one question. “Ali, are you willing to take a 10% pay cut for one year?”

Ali said yes. He would even go to 15%. The deal was simple. Stop doing the engineering. Hire great engineers and put them in position. Spend your days doing what you are actually good at, which is talking to people and winning work.

Ali followed it to the letter. The firm that stalled at a dozen people now has about 45, and it works across eight markets, from civic buildings to aviation.

Being Good at the Work Is the Trap

Most founders hear that story and nod. Then they go back to doing the work they love.

It is not laziness. It is competence. You started the company because you were good at something. Every year you stay good at it, handing it off feels like a bigger loss. Your skill becomes the ceiling. You are the best engineer, the best writer, the best installer in the building, and that is exactly why nothing grows past you.

Ali is honest about how hard the habit is to break. He told me he still wanders into a conference room where his team is studying a set of drawings and drops in two words of advice. His engineers answer him the same way every time. “Ali, that’s old code. Are you in touch with reality?”

He finds it funny, and that is the point. The old instinct never fully leaves. The only thing that moves the company is deciding who owns the work now.

What the Pay Cut Actually Buys

A 10% pay cut looks like a cost. It is a purchase. Ali bought time, and he spent it on the one job nobody else in the firm could do.

I think about this through Persuasion Architecture. Every customer walks a path to your door, and every step on that path needs an owner. When the founder owns every step, the founder can see none of them clearly. Jerry Davis did not hand Ali a growth tactic. He handed him a seat where he could finally see the whole path.

Then something else happened that Ali did not expect. Once other people owned real work, they started producing better ideas than he did.

The Best Idea in the Firm Was Not His

Ali went through Leadership Austin in 2009, in a class of 52. He describes his firm back then as small and shaped around his preferences. “Everything was pretty much the way I wanted it,” he told me, and he meant it as a confession, not a boast.

The program pushed collaborative thinking. He took it back to the office. Years later, his vice president of mechanical, electrical and plumbing pitched an idea in a brainstorm: turn community service into a friendly competition. Teams earn points for time spent helping others. Board seats do not count. Checks do not count. Only hours do.

The firm piled up more points than anyone expected, won recognition from the Austin Chamber, and gave employees a reason to show up for something bigger than a billable hour. A controlling founder never gets that idea, because a controlling founder never leaves room for it.

Where the Freed-Up Time Went

Once Ali stopped designing, his job became getting out into rooms. He joined boards. He chaired the Austin Chamber’s board. He kept showing up where business owners gather.

Here is the part that surprised me. Ali is blunt that the boards he serves on do not send him business. He still tells struggling owners to get involved, because rooms like these give you exposure and put you in front of people like Jerry Davis. This matters more than ever as we are over “influenced” by digital connections and lacking in real world ones. His own turning point came from a round of golf with a man who ran a bigger organization and was willing to answer a direct question.

That is a pattern worth stealing. Ali did not find his answer in a book or a software tool. He found it by asking someone further down the road, out loud, and then doing what they said.

How to Find Your Own Pay Cut

You may not have a Jerry Davis. You can still run his test on yourself. Sit down with a blank page and answer three questions honestly.

• What do you do every week that your best employee could do at 80%? If the answer is “a lot,” that is your list.
• What do you keep because you enjoy it? Enjoyment is a fine reason to keep a hobby. It is a poor reason to keep a bottleneck.
• What job can only you do? For Ali it was winning work. Name yours, then protect the time to do it.

Then do the math Ali did. Count the cost of the handoff in dollars and discomfort for one year. Count the cost of staying exactly where you are for five. Ali chose the first number and never made the second payment.

The Part I Will Not Spoil

That is only one thread in a long conversation. Ali also talks about arriving in the United States alone, why he built a second life as a photographer, and the one piece of advice he saved for his last answer. He describes a moment on a street in Oaxaca where he put his camera down on the sidewalk and could not keep working. I will let him tell you what happened.

Ali says that if you have never failed, you are probably not an entrepreneur. I told him on the show that I have failed plenty too. His pay cut story is a good reminder that holding on to the wrong job is a failure you choose.

What Are You Still Holding?

Ask yourself one question this week. What is the piece of your business you love doing, are best at, and are quietly keeping from growing?

Would you take a 10% pay cut for a year to find out who could do it better?

Watch the full conversation with Ali below, or find Rock Solid: Round Rock Business Leaders wherever you listen.