No matter what part of the world you are from, one of the most challenging aspects of being an entrepreneur is managing people. I believe that the easiest way to learn how to manage is to work with great managers. Unfortunately few managers are great, and since many entrepreneurs are young, they haven’t had very many managers from which to learn. The blogosphere is fairly light on very strong information about people management. If you are lucky enough to reach the stage where you have employees, good people management can make the difference between success and failure.
Few startups are successful based on the lone vision and work of the founder. You will be much more likely to be successful if you create an environment where your employees think of the next big ideas and how to execute on them. Many entrepreneurs rely on traditional compensation to motivate employees. They say, ‘If I could only pay people more, they’d be more motivated!’ While compensation is important, it is not nearly enough. People will go above and beyond for a sustained period of time only if they feel that their managers truly care about them.
An effective way to build this type of relationship with employees is to get to know them and give them personalized recognition. I learned about this in a book called the 24-Hour Carrot which you can learn about at Carrots.com (great URL!) The theory is to understand what your employees truly value and to recognize them for outstanding work with incentives that reflect what they would actually want. For example, if you can get to know your employee well enough to know that they love music, you’ll get her tickets to a concert when she does a great job instead of a duffel bag with your logo. She”ll be touched and be that much more likely to go the extra mile at work.
I’d boil this theory down to one word: thoughtfulness. If being thoughtful is ingrained in the fiber of your being, then this won’t be a big deal for you. However, even realtively thoughtful people, when distracted by the thousands of responsibilities of being an entrepreneur, often drop the ball. It’s important to be extremely disciplined, and recognize your people very regularly, even once per week. I’ve even started a list of potential recognition ideas so that when someone performs in an outstanding way, I can reward them instantly.
Entrepreneurs face so many types of risk: technology risk, product risk, and market risk. People risk is as important as other types of risk because your company will be more likely to figure out ways to deal with the other risks if your employees are happy and motivated. And there’s a special bonus to developing a regular habit of being thoughtful with employees – it may spread to other aspects of your life!