Jennifer Prosek thinks of herself as the general of a business army: a team that's committed, aware of the terrain and always ready to take action.
But in contrast to a military hierarchy that depends on following orders from the top, the CEO of public relations company CJP Communications in New York encourages soldiers in her force to act like entrepreneurs who think independently. The results are higher engagement and more loyalty, the author of Army of Entrepreneurs told a Canadian Management Centre conference in Toronto last week.
The Globe and Mail's Wallace Immen asked for details:
What's the advantage of an army of entrepreneurs?
Entrepreneurs act more like owners than employees. They're clear about the mission and about their contribution. Because of that they're more focused and productive. They're empowered to make decisions, willing to take risks and they're always looking for opportunities for growth. I believe you can change anyone's mindset to think more like an entrepreneur and many can be developed into stars because of it. I've found most people want to be more entrepreneurial, but they don't want to become actual entrepreneurs and go off on their own.
Why is entrepreneurial thinking important now?
Every company is looking to achieve more growth in a slow-growth world. This is a way to inspire more innovation and growth without burning people out when trying to do more with less. I think because the job market has been tight, some managers have decided they can spend less time focusing on retention and motivation. That's a massive mistake because in any economy your top performers always have opportunities to leave. And the moment that the economy starts to grow, there's going to be a huge exodus out of many organizations.
How did you decide to amass an army?
In the mid-1990s I had bought out my partner and was looking for ways to make the business grow and prosper. What I realized was that even though I was a natural entrepreneur and creating new business came easily to me, other people at the firm simply didn't have the tools, context, skills and outlook they needed to promote the business and its capabilities. What it took was actually a change on my part to help build the staff I needed.
And you gave them a boot camp in entrepreneurial skills?
My epiphany was to realize that many people in public relations have never been to business school and didn't understand the keys to running a successful business. I started by teaching a half-day workshop for employees on the fundamentals of making a business successful: things like setting financial goals, receivables collection and profit margins.
Now that we're a larger organization (45 employees), I have a trainer who knows the industry come in and do the workshops, and we run about six a year. They aren't mandatory, but people want to attend because it can make them more successful in what they do. Employees say they appreciate that we're teaching them something beyond their essential job skills and it helps them see new possibilities.
What can any organization do to encourage entrepreneurial thinking?
Over-communication is essential. Employees who feel they have as much information as management does feel empowered to make decisions in a more owner-like fashion than an employee-like fashion. And I would make sure that you regularly communicate about the health of the organization because we're in a time when people are enormously worried about their job security. Keeping people in the loop cuts down on gossip and that makes people more secure and productive.
Second, make the organization as flat as is reasonable. I literally broke down walls, so managers and employees sit together and can freely engage each other.
And provide clear incentives. There always has to be a reward for aligning and feeling like the work employees are doing is not only good for the company but good for them.
The incentive you give sounds incredibly tempting.
We call it a Commission for Life: 5 per cent off the top of any new business an employee brings in. All the employee has to do is set up a meeting that leads to successful new business to get 5 per cent of the revenue from that account for the life of the business – as long as they remain with CJP. Not only does it encourage employees to align their own financial and professional goals with the company's growth and success, it's an incentive to keep them in the organization. Everyone in the company makes finding new business a goal and 80 per cent of employees now are collecting regular cheques for their successes.
In the corporate environment with narrower profit margins, you clearly need some other nudge, like one-time bonuses. But if people aren't making the effort to look for opportunities to get people walking in the door, no one can prosper.
Think about the economics of having to replace employees: Even an entry level employee, if you have to go to the market to replace them, it costs at least 30 per cent of the annual salary to replace them. So anything you can do to keep employees engaged and in the organization ultimately helps the bottom line.
You've also replaced annual reviews. How does that work?
Managers sit down with their employees for about 15 minutes every 100 days to review the goals they set and results. On a scorecard, you get a green if it happened, yellow if it's still in progress or red if it didn't happen.
They're incredibly simple and focused on what management and the employees agree are the major things to focus on in the next 100 days. We find this 100-day plan creates the structure and more immediate deadline people need. A lot of people have trouble with follow through – it's not that they can't follow through it's just that in the clutter of daily life it's easy to get distracted and put things off. Setting 100-day goals works because it creates short-term successes and the energy and belief that you can do more.
The annual review creates anxiety because you've got to summarize a year and in the end you're graded and you can run into surprises that could have been avoided if you'd discussed issues early. I think managers are also guilty of not promoting people fast enough – they see annual reviews as a way to put off discussions about changes. But if people are meeting their goals and outperforming and ready to move up halfway into the year, it gives the opportunity to do more for the person.
How can you make changes like these stick in hide-bound organizations?
Actions speak louder than words and it's about leadership in the organization setting out a plan and living by it themselves. That gets everyone on board believing it is an authentic change and a set of behaviours they can align to. Leaders need to become more accessible and keep office doors open or literally take down the walls and encourage dialogue.
Entrepreneurs want to feel they can walk up to the boss and say "Hey, I have an idea and I'd like to run with it."