Your employees are not as committed to your company’s success as you are.  If you are an entrepreneurial owner, this fact is something you must understand.  I have seen this misalignment in many companies and it often leads to turmoil within the culture.

This article provides 6 important points for entrepreneurs when leading their company. The first point may be the most important:

1. Employees are equally invested.

Here’s a painful truth: Employees aren’t going to take ownership the way you want them to. If they wanted to be entrepreneurs, they would have taken that path. And it’s good that they’re not as invested as you are — it’s a problem if someone else is more interested in making your business succeed.

This stubborn assumption manifests itself in lots of ways: expecting people to work long hours, making comments that they should feel “grateful” to be a part of something historic, pushing back when employees bring legitimate problems to your desk, etc. This is what you signed up for. It’s not what your employees signed up for unless they took a stake in your company.

Equity is the equalizer, but if you do not offer equity to your employees, you have to understand their mindset.

I have seen this frequently in many privately-owned companies. My thought has always been that this approach has always been a bias from the owner.  The belief is that the employees are as committed to the company’s growth to the point of working long hours, not wanting pay raises, etc.  The employees must share the same desire as the owner to see the company grow.  Yet, the employees are not compensated with any equity.  This misalignment in understanding motivations often leads to exaggerated views of the employees’ commitment to the company.

Here is another common mistake I see in entrepreneurial companies:

6. They can withstand organizational havoc.

Some business owners fall into the anal-retentive, detail-oriented category; others are more comfortable flying by the seat of their pants. If you think running the show means you can leave a trail of dysfunctional processes and contracts in your midst, you’re likely angering teammates on a daily basis.

Employees’s roles definitely exist to lighten entrepreneurs’s loads, but intentionally leaving messes that make their jobs harder won’t do much to earn loyalty or trust. Entrepreneurs are often better starters than finishers, and failing to think one step further to how your actions will affect your teammates can be a nail in the coffin.

Do not underestimate the importance of defining roles even in a small, entrepreneurial company that is in fast-growth mode.  The faster the growth, the more difficult it is to keep your company’s roles defined…and staffed.  Recently, I have seen two different companies struggling with growth.  The issue seems to be twofold:  1) properly staffing up to meet the new demands and 2) defining the roles and responsibilities of each person.

  1. Staffing up is one of the more harrowing investments any entrepreneur has to make.  The business sees a noticeable increase in revenue, but will is be sustained?  If there is any question about the continuity of the revenue stream, the owner is normally hesitant to hire.  The issue now becomes the stress on the existing employees to absorb the increased workload.  If it is temporary, fine, that is part of being an employee.  If it is sustained and then continues to grow, you will have a problem.  The corporate culture will deteriorate as the employees struggle with long days and stressful deadlines.  Hire temporary workers or staff up your team – this risk is part of being a successful entrepreneur.
  2. Fast growth often leads to roles absorbing more and more responsibilities.  The actual tension comes from employees losing track of their primary responsibilities.  Their roles morph into something lacking definition, just activities that have to be covered in a timely manner.  As role responsibilities and expectations become blurred, employees get blindsided by unexpected shifts in these areas.  The important task here is to keep in close contact with your employees and keep their roles clearly defined as the company faces remarkable growth.

The entire article is worth a read for any entrepreneur, or any company facing fast growth in this strong market.  If you need help in hiring the right people or defining the existing roles, we can help.

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