The Waterline Audit: Which Decisions to Delegate First (And Which to Keep)

Your team asks you about everything.

“Should we offer a refund here?” “Can I send this email?” “How much should I charge for this project?”

And you answer. Every time.

Because you’re worried that if you don’t, they’ll make the wrong call and it’ll cost you—money, reputation, clients.

So you stay in the loop. You approve everything. You make every decision.

And your business stays stuck because nothing moves without you.

Here’s the problem: you’re treating all decisions like they’re equally risky. They’re not.

Some decisions can sink the ship. Others can’t.

The Waterline Audit helps you figure out which is which so you can delegate the safe ones and keep the critical ones.

Why Founders Hold Every Decision

Most founders don’t delegate decisions because they’re afraid of what might happen if someone gets it wrong.

And that fear is valid. You’ve built this business. You know what works. You’ve made mistakes. You don’t want your team making those same mistakes on your dime.

But here’s what happens when you hold every decision:

• Your team waits on you for everything
• You become the bottleneck
• Nothing moves unless you’re available
• You’re buried in approvals, questions, and judgment calls
• Your team never learns to think for themselves

And the business stays small because it can only grow as fast as you can make decisions.

The Waterline Audit gives you a framework to delegate decisions without losing control.

What the Waterline Audit Is

The Waterline Audit is a simple exercise that helps you categorize every decision in your business based on one question:

If this decision goes wrong, does it sink the ship?

Think of your business like a boat. Some decisions happen above the waterline—if you mess them up, you can recover. The ship stays afloat.

Other decisions happen below the waterline—if you mess them up, water rushes in and you go down.

The decisions above the waterline? Those are the ones you delegate.

The decisions below the waterline? Those are the ones you keep.

How to Run the Waterline Audit

Step 1: List All the Decisions You Make

Go through your calendar and your inbox from the last two weeks.

Write down every decision people asked you about:

• Client refunds
• Pricing adjustments
• Email approvals
• Hiring decisions
• Marketing spend
• Tool purchases
• Project scope changes
• Contract terms

Everything.

You’re not evaluating them yet. Just listing them.

Step 2: Ask the Waterline Question

For each decision, ask:

If my team gets this wrong, can we recover? Or does it sink the ship?

Be honest. Most decisions are above the waterline.

• Wrong subject line in an email? Recoverable.
• Wrong price on a proposal? Costly, but recoverable.
• Wrong hire? Painful, but recoverable.
• Wrong contract terms with your biggest client? Below the waterline.
• Wrong decision on a lawsuit? Below the waterline.

The decisions that are truly below the waterline—the ones that could destroy the business if they go wrong—are rare.

Maybe 5-10% of the decisions you’re making.

Step 3: Sort Into Three Categories

Now sort your decisions into three buckets:

Above the Waterline (Low Risk) These are decisions that, if wrong, are easily fixable with minimal cost.

Examples:

• Email subject lines
• Social media post timing
• Minor client requests
• Template updates
• Routine follow-ups

These should be owned by your team. No approval needed.

At the Waterline (Medium Risk) These are decisions that could be costly if wrong, but won’t sink the business.

Examples:

• Pricing for standard services
• Client onboarding process changes
• Marketing budget under $1,000
• Vendor selection for non-critical tools

These can be delegated, but with guidelines. Your team decides, then informs you.

Below the Waterline (High Risk) These are decisions that, if wrong, could seriously damage the business.

Examples:

• Major contract terms
• Legal decisions
• Hiring your first leadership team member
• Changing your pricing model
• Major financial commitments

These stay with you. At least for now.

Step 4: Delegate Everything Above the Waterline

Once you’ve sorted your decisions, hand off everything in the “Above the Waterline” bucket.

Tell your team: “You own these decisions now. Make the call and keep moving. You don’t need my approval.”

At first, they’ll probably still ask. That’s fine. Redirect them: “This is your call. What do you think we should do?”

Within two weeks, they’ll stop asking.

What Happens When You Delegate Above-the-Waterline Decisions

Here’s what most founders worry about:

“What if they make the wrong decision?”

They will. Sometimes.

And that’s fine. Because these are decisions that can be fixed.

Someone sends an email with a typo? They’ll catch it next time.

Someone schedules a meeting at the wrong time? Reschedule it.

Someone responds to a client question with slightly different language than you would’ve used? The client probably didn’t notice.

The cost of these mistakes is low. The benefit of freeing yourself from 50+ decisions a week is massive.

You get your time back. Your team gets autonomy. The business moves faster.

Common Mistakes to Avoid

Treating every decision like it’s below the waterline.

Most decisions aren’t. Stop protecting your team from recoverable mistakes.

Not giving clear guidelines.

If you delegate a decision without context, your team will guess. Give them the framework: “Here’s what we optimize for. Here’s what good looks like. Now you decide.”

Micromanaging after you delegate.

If you say “You own this decision” and then override them the first time they do something differently than you would’ve, you’re teaching them not to decide. Let them run it.

Keeping decisions you should delegate just because you’re good at them.

Just because you can make a decision well doesn’t mean you should. Delegate it if it’s above the waterline.

The Bigger Picture

The Waterline Audit is part of the Extract phase of the Operations Reset Framework.

You can’t delegate ownership if your team doesn’t know what they’re allowed to decide.

Once you’ve extracted which decisions are above the waterline, you can assign ownership to your team (phase two) and scale the operating rhythm so the business runs predictably (phase three).

When all three phases work together, you get The Reset: a business that doesn’t need you to approve everything.

But it starts with the Waterline Audit.

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Quick Win: Audit Your Last 20 Decisions

This week, write down the last 20 decisions people asked you about.

For each one, ask:

• If this goes wrong, can we recover?
• Is this above, at, or below the waterline?

Circle everything above the waterline. Those are the decisions you delegate this week.

Hand them off. Tell your team: “You own this now. Decide and move forward.”