NEW YORK, United States — Any MBA programme will tell you that managing people is perhaps the biggest challenge that a business leader faces. At business school, I heard this message repeatedly. But, to be honest, it never really rang true for me. I have always thought of myself as being a ‘people person,’ someone with a strong sense of diplomacy who can get along with nearly anyone. And after business school, in my years as a consultant, a private equity director and an executive in the retail world, I found motivating and engaging employees to be fairly second nature. As the co-founder and CEO of a fast-growing start-up, however, I can tell you that those business school words of wisdom have truly sunk in. Keeping your employees happy and motivated is both critical and difficult to achieve. I dedicate a lot of time to it.
Some of the things that can undermine employee happiness and motivation levels are common to companies of any size and development stage. Others are specific to start-ups. Today, I’m going to focus on the major issues I’ve faced at M’O and the steps we have taken as a company to try and tackle them. While no CEO can keep each and every employee happy and motivated, every CEO needs to keep the company as a whole happy and motivated.
I have learned a lot along the way (though no doubt have more to learn) and hope this edition of Finding Your M'O helps others benefit from my experience.
KEY CHALLENGES AND ISSUES:
Clash of personalities. In any work environment, you are likely to experience a clash of personalities. Big egos clash with each other, creative people clash with business people, etc. What is somewhat specific to an early stage business like M’O is a clash between ‘start-up people’ and ‘big company people.’ At the very early stages of this kind of business, most employees tend to be ‘start-up people.’ These individuals are natural risk-takers who are comfortable operating without much structure in an ever-changing environment. They are willing to roll up their sleeves, wear multiple hats and be scrappy. However, as the company grows and roles become more defined, a company increasingly needs to hire ‘big company people.’ They bring with them valuable experience, but tend to like structure and process. They are used to having more resources to throw at any given task or problem. When start-up people and big company people collide, it can be like a spark to a powder keg. To be clear, some tension in this regard is normal, even healthy, and can lead to better overall results. But when the frustration boils over, resulting in some employees shutting each other out, or worse still, screaming matches, then the company as a whole can become a destructive environment in which to work and productivity can grind to a halt.
Uncertainty about changing roles. Relating to the previous point, in a start-up, an employee needs to take on tasks beyond those required by his or her formal role. Furthermore, as the company grows and new people come on board, roles and responsibilities often change, sometimes in unforeseen ways. Many employees find uncertainty surrounding their changing roles uncomfortable.
Uncertainty about career path. Start-ups typically don’t have clearly defined career paths. No employee can gaze into a crystal ball and clearly see his or her future at the company. This includes the CEO. Moreover, many functional areas are lean with only a few employees, so there aren’t conspicuous or established promotion paths. Not knowing where they will be in a year makes some ambitious employees uneasy.
Need for recognition. Let’s face it, there are so many things at a start-up that needed to be done yesterday that formal performance reviews are often overlooked. Between the pressures of getting a company funded and launching a product live, one can sometimes forget to give employees the recognition they desire and deserve. One of my most important learnings as a CEO has been remembering to take the time to provide the recognition and reassurance that many employees crave and need.
Rolling with the punches — quickly. Start-ups are always in a state of flux and process often needs to change very quickly to accommodate new business opportunities and growth. Amongst employees, tolerance for rolling with the punches and changing directions on the fly can vary greatly. As somebody who is comfortable operating in a dynamic environment that lacks structure, I sometimes underestimate the anxiety this type of business can provoke among certain members of the team. This can be true in particular for junior employees, who may be new to work in general and may not yet have learned how to read changing winds and tack with them.
Extreme growth targets are stressful. Another source of anxiety can be the strenuous growth targets that are set when you take on VC funding. While some employees are invigorated and emboldened by the need to meet these targets, others want to hide under the desks when the board meetings come around.
KEY STRATEGIES FOR ADDRESSING THESE ISSUES:
Over communicate. As the CEO, you need to talk to your employees constantly about these issues. This can be done in the weekly company meeting or one-on-one in your office or over drinks after work. But it is key that you make sure employees understand the tradeoffs of working in a start-up compared to an established company. Emphasize the positives, acknowledge the negatives, but make sure they hear your voice regularly talking about these issues.
Let employees freely communicate their concerns. This is closely correlated to the point above. Half of keeping people content and hard-working is getting them to talk to you about what’s bothering them. Help them to vent and listen to what they say. You might just learn something.
Lead by example. Smile. It may sound silly, but happiness is contagious and it starts at the top. And show employees that you are a team player; that you are not there to take sides, but to do what is in the best interests of the company.
Remember to thank people. Again, this can be in a group setting, or in private, but share the love. It works wonders.
Remember to tell people where they can improve. This is the flip side of the point above. Sometimes employees feel anxious because they know they are not doing something right but don’t know how to ask for help. Get in there. Steer them away from the rocks. They will feel relieved and you will get better results.
Create clear processes when possible. While start-ups are constantly in orbit, nailing down as much structure as possible can reassure those who need it. This might mean holding a weekly company meeting or having all employees use a common platform or tool. But injecting some sense of “gravity” into the atmosphere can help to keep people on track and reduce stress.
Eliminate overlap between roles. This one is tough. Start-ups often operate with a matrix structure where some overlap can provide strength. But to the degree possible, eliminate any major overlap in roles, as it can often only lead to the butting of heads. If you need more than one person on something, then be very clear with both people that they BOTH own the task and need to work together on it.
Ensure consistency between your performance management system and the behaviours you want to encourage. At M’O, when it comes to bonuses and career progression, teamwork is emphasised and rewarded.
Encourage social interaction between employees. M’O has drinks at 5pm every Friday, either in the office or at a local watering hole. Some of the team’s best ideas have come to life in a social context where people feel free and relaxed.
Have fun! As the CEO, if you don’t enjoy yourself, people sense it and nobody else will either. Keep a light heartedness to whatever you’re doing, wherever you’re doing it. People are always watching the leader. If you project fun, they will also have fun and great things will happen.
Previous articles in the Finding Your MO series:
Part 1: From Big Idea to Launch
Part 2: The Need for Speed
Part 3: The Business Plan is Your Roadmap
Part 4: Making the Most of Mentorship
Part 5: How to Choose the Right Investors
Part 6: How Wise is Conventional Wisdom?
Part 7: Going International
Part 8: Managing Investors
Part 9: Acquiring Customers
Part 10: Building the Team
Áslaug Magnúsdóttir is co-founder and former CEO of Moda Operandi.