Each year, Elana Rosenfeld and Leo Johnson, her husband and business partner, leave their flourishing coffee company in the interior of British Columbia to travel for up to a month at a time to Mexico, Nicaragua, Peru and other countries.
Rosenfeld and Johnson have nurtured relationships with farmer co-ops in those countries that have been crucial to the success of Kicking Horse Coffee Company. It is now Canada’s no. 1 fair trade coffee company with annual sales of almost two million kilograms of organic coffee.
Those trips are also an example of the relationship that Rosenfeld and Johnson have fostered with their 50 employees back home in Invermere, B.C. It’s based on trust, employee autonomy and a shared sense of mission.
“Knowing we can leave the shop in good hands allows us to develop a personal relationship with local suppliers,” Rosenfeld says. “In turn, we can report back to our employees and customers on how fair trade coffee makes a real difference to the lives of those who were often exploited. That message encourages further support for the company’s mission and products.”
Nestled in the Rocky Mountains of southeast B.C., Kicking Horse was founded by Rosenfeld and Johnson in a garage 15 years ago. They pride themselves on an informal and accessible management style, regular communication with employees and a strong sense of fun that permeates the company culture.
Work practices include flexible hours, daily stretch breaks for line workers, catered monthly “pow-wows” and official fun days for kayaking, skiing or Christmas celebrations.
To many entrepreneurs, those activities may sound more relevant to a holiday camp than a multimillion-dollar enterprise. But experts insist the keys to building an engaged, high-performance workforce are more likely to be found in Kicking Horse’s inspiring leadership approach than in traditional command-and-control management techniques.
“Doing it from the heart is paying off for us,” Rosenfeld says. “Our employees are highly motivated, very productive and usually stay with us a long time.”
The results are in the numbers at Kicking Horse, a client of BDC Financing and Consulting. The company’s revenue doubled annually for the first few years and now increases by about 15% to 20% a year. Plant facilities were recently expanded to 60,000 square feet, including a welcoming cafe where local residents can sip the company’s wares. High-end chain stores in the U.S. have started stocking the company’s product and there looks to be much more growth ahead.
There is increasing recognition that employees are motivated first and foremost by a fundamental need for purpose and meaning in their work, says Irene Lis, a BDC consultant in Toronto who specializes in human resources management.
“Obviously, you can’t pay someone peanuts and expect the best,” Lis says. “But once employees are satisfied that their compensation is fair, the rest comes down to managers and how well they are able to engage the staff. To get that engagement, employees need to believe in the business and the management.”
Forty years of research support this view, according to the bestselling book Drive: The Surprising Truth About What Motivates Us. For many jobs—where creativity and initiative are required—a focus on reward-and-punishment approaches (“sweeter carrots and sharper sticks”) not only doesn’t work in getting the best from employees but can also frequently do harm.
In becoming a better leader, one of the toughest challenges for many entrepreneurs is finding the right balance between exercising managerial control and truly delegating authority to employees. Yet, delegating responsibility is a key to both generating sustainable growth and empowering employees.
While perks like official fun days are eye-catching, Kicking Horse is careful to protect its culture by focusing on managing HR fundamentals in areas such as hiring and compensation.
Good recruitment practices are critical. To attract the best people, Rosenfeld says the company offers competitive wages and an above-average benefit package, relative to the local economy and the coffee industry. Then it sets the ground rules for employees and diligently monitors performance.
“You have to make your expectations clear,” says Rosenfeld, who with Johnson is a former winner of a BDC Young Entrepreneur Award. “Weak players can poison the workplace quickly and bring down staff morale.”
Accordingly, the company does not shy away from tough decisions.
“If someone does not fit in, we deal with it quickly. We don’t want to be bogged down by the drama that can happen in workplaces.”
Bonnie Elliot, a Senior Consulting Manager at BDC, says the Kicking Horse model can be applied to companies in a wide range of industries, but cautions that entrepreneurs have to be prepared to back up inspiring words with sustained action.
“When you walk into the facilities at Kicking Horse, the way people interact makes it evident that the place is different from a company that is run bureaucratically and autocratically,” Elliot says. “The commitment to staff well-being and community is not just talk, but something that the partners live and breathe. The culture starts at the top. You can read all the concepts in the world, but unless you’re modelling them, they won’t work.”
10 tips for successful people management:
- Treat people as individuals, not commodities.
- Take the time to choose the right people, but be prepared to make tough decisions if they don’t fit in. When in doubt, out.
- Communicate, communicate, communicate. It’s the most effective and cheapest way to boost employee engagement.
- Make your expectations clear to employees and be clear on what your employees can expect from you.
- Build your culture as you grow.
- If you want to grow, you have to let go. Reduce micromanagement and start delegating.
- Focus on quality rather than speed when growing the company.
- Managers are trained, not born. They can be the strongest or weakest link in an organization. Train them well.
- Clearly define and communicate your vision as well as your HR philosophy, strategy and processes.
- Employees perform better when engaged, appreciated and inspired. That comes from the top and has to be genuine. Walk the talk.
Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.