From the March 2014 issue of Entrepreneur
The Bridge-builder
Photo (C) Randy Harris

Human Capital Ideas

Charlie Kim, Next Jump

Among the many inspirational mottoes, signs and posters that adorn the walls of Next Jump's New York City headquarters, none is as important or illuminating as the one that reads "Better Me + Better You = Better Us." It isn't rhetoric: It's the cornerstone of the e-commerce company's culture, a call to arms that shapes a multitude of in-house fitness, mentorship and employee-recognition programs designed to foster a healthier, more contented and more committed work force.

"The culture we're building is predicated on the concept of long-term, sustained happiness," says Charlie Kim, Next Jump's founder and CEO. "Our growth is not due to our bright management team or our board of directors. It's because we have an army of individuals who give their all."

He continues to refine and expand his leadership formula, introducing increasingly radical measures like guaranteeing that staffers will never be fired. Unhappy or underperforming employees actively participate in development programs; if that doesn't produce results, their primary objective is to find a new job, and Next Jump continues paying their salary while helping them seek employment.Founded in 1994 in Kim's Tufts University dorm room, Next Jump has quietly emerged as a major force in the digital commerce sector, running web-based rewards and loyalty programs as part of its employee engagement operating system for more than 90,000 corporations, affinity groups and institutions worldwide. The firm has raised $45 million from more than 100 angel investors, who have been won over by Kim's Human Capital Engineering initiatives like NxJ University (a continuous learning platform) and Code for a Cause, which encourages engineers to spend a minimum of two weeks of paid time each year to build web technologies for charities at no cost. "We call it Human Capital Engineering for the purpose of applying aggressive experimentation to iterate and evolve, based on the needs and constraints of our staff," Kim explains.

"Terminating a human being is not good business practice. It's the worst thing you can do to someone's psyche," he says. "As a leader, I want the people who work here to feel safe and feel like they're part of a family. I look at hiring like adopting children: It's a forever thing."

Kim credits the company's culture for slashing Next Jump's employee turnover to essentially nil. And his leadership theories are attracting attention. He was a 2013 winner of the Harvard Business Review/McKinsey M-Prize for Management Innovation, and executives from multiple industries have toured the Next Jump offices in hopes of gaining insight into the company's ethos. "We've turned the entire company and culture into a leadership-development program," Kim says. "People need room to experiment and fail. They aren't born leaders, just like children aren't born incredible athletes. It takes incredible practice and training. Leadership is not innate. It's a skill, and it's a muscle. You have to grow it." --Jason Ankeny

Clara Shih, Hearsay Social

Clara Shih, Hearsay Social
Photo (C) Leah Fasten

Real Values

Clara Shih, Hearsay Social

Check your attitude at the door when you come to work at Hearsay Social. "We want team players," says Clara Shih, co-founder and CEO of the San Francisco-based social business platform. "As a startup, we're resource-constrained. Every day counts. The only way to iterate quickly and stay three steps ahead of the big companies is working together. There's no room for politics, empire building or ego."

Shih contends that successful leadership hinges on the individuals who serve alongside the leaders, and advocates that companies aggressively seek out talented, creative prospects who bring to the table skills and qualities beyond direct professional experience. The Hearsay Social staff includes former government officials, onetime insurance agents, a medical doctor and even a veteran of an Egyptian cruise ship.Shih established 5-year-old Hearsay Social on three core principles. One, customers come first; two, company before self; and three, rapid execution. "Leadership starts with values. You must define the vision and mission of your company, its place in the world and how you'll get there," she says.

"Our business lends itself to being more creative about the kinds of people we can bring on," Shih says. "There's a common sense of purpose around what we build and how we run the company that unites us. But the attributes that make Hearsay employees the best in the Valley--or the best in the world--make them attractive anywhere."

Shih's philosophies have helped Hearsay Social raise $51 million in funding from Sequoia Capital, NEA and executives from Facebook, Twitter, LinkedIn and Google.

"As an entrepreneur, you face a dire sense of urgency to turn a profit before running out of money. But you can go too far that way and hire prima-donna engineers who turn the culture toxic," Shih warns. "There's also the other extreme, where you have great values and a great culture, but no viable business. Many times, those two ideals are at odds, but they don't have to be. You can run a very successful business through a lens of humanity and strong values." --J.A.

Tom Gimbel, LaSalle Network

Tom Gimbel, LaSalle Network
Illustration (C) Brett Affrunti

Focused on Fun

Tom Gimbel, LaSalle Network

For LaSalle Network's 14th anniversary in 2012, founder and CEO Tom Gimbel surprised his nearly 100-person staff with an all-expenses-paid weekend trip to Las Vegas. Gimbel has been hosting such an event--dubbed "LaSallemas"--every year since the Chicago-based staffing firm was founded, but they were not always this extravagant. Gimbel says he couldn't afford to do much the first year, so he and his six employees rode around Chicago sipping champagne in a stretch limo, then ate pizza. The budget for the parties has increased commensurate with company revenue, which reached $40 million last year. But the goal is always the same: fun.

"Does it necessarily get people to do their job better for that day or for that week? Probably not," Gimbel says. "But it does get people to not want to leave. I think that's really the key, and as a leader your job is to make sure the work gets done well for your clients but also to make sure you retain your staff."Gimbel fosters that culture year-round by celebrating employees' accomplishments and work anniversaries with perks like in-office manicures and live music. For one employee's 10th anniversary, Gimbel--knowing the staffer was a country-music fanatic--brought in a guitar player to serenade her.

LaSalle boasts a retention rate of nearly 90 percent. "When people are happy and really enjoying work, they function better as a team," Gimbel says. "After people have been here for a year or two years, you start to see the synergies of the teams, and they really begin to gel and work well together, and that's when we really see our revenues grow." --Katherine Duncan

Sallie Krawcheck, 85 Broads

Sallie Krawcheck, 85 Broads
Photo (C) Amy Fletcher

A Push for Diversity

Sallie Krawcheck, 85 Broads

If Sallie Krawcheck has her way, the old boy's network will soon be ancient history. The former Wall Street exec--renowned for turning around floundering businesses when she held key positions at Smith Barney, Merrill Lynch and Sanford C. Bernstein & Co.--now spends her days at 85 Broads, a global women's network that produces webinars, networking events and workshops designed to help women develop and hone leadership skills and invest in one another's success.

Krawcheck took over ownership of 85 Broads, established in 1997 and named for the former address of Goldman Sachs, last May. It now has more than 32,000 members in 130 countries."In corporate America we've gone sideways, and in financial services we've gone backwards," says Krawcheck of the lack of diversity in leadership. The Great Recession of 2008 affirmed this for her. "People talk about the downturn being caused by greed, but it wasn't just greed: It was groupthink. Diversity of thought--driven by diversity of background, of gender, of color--cuts right through groupthink," she says. "Nothing bad happens when women are in positions of power."

To provide networking opportunities, 85 Broads offers members a variety of educational events, from media training to courses on starting a hedge fund or publishing and marketing a book, at settings that range from low-key lunches and happy hours to more formal summits and webinars. "Men seem to learn to network earlier than women do, and it can be the difference in getting that promotion," Krawcheck says.

To continually improve the organization's resources, she regularly taps members for feedback. And what do they want? More education, and opportunities to meet more women like them.

At one time Krawcheck was described as the most powerful woman on Wall Street. And that's exactly who it'll take to get a broader range of people into the upper echelons of corporate America. --Michelle Juergen

Jeff Lawson, Twilio

Jeff Lawson, Twilio
Illustration (C) Brett Affrunti

Hands Off

Jeff Lawson, Twilio

Like other San Francisco tech startups, Twilio offers great employee perks: catered lunches, pretax commuter benefits, Kindles with a $30 monthly book allowance. But the best incentive CEO Jeff Lawson believes in giving his 250-plus workers is independence.

One motivator is passion for the product. Lawson can attest to that personally. His third startup was in sporting goods, but his heart wasn't in it. He found his passion in telecommunications, starting Twilio in 2007. The company's cloud-based communications platform is used by internet companies to route phone calls, texts and multimedia messages in 40-plus countries. Clients include the car service Uber, which uses Twilio to send its customers text messages announcing when their rides will arrive.Perks and salary go only so far in creating on-the-job happiness, he contends, but autonomy creates devoted employees. That's why Lawson divides his staff into small teams and lets them do their own thing. "They're centered around a customer to serve, a mission for how to serve them and the metrics of what success looks like," Lawson says. "Then they're set free to help that customer, make the right decisions and not be micromanaged."

Lawson believes Twilio should be as satisfying and efficient to work at as the products it sells. To facilitate this, he determined the company's core values, or, as he calls them, "Nine Things." "'Core values' are something you hang up in a nice frame," he says. "Tenets can't just be words on the wall."

One of the Nine Things is "No shenanigans," meaning employees should deal in a direct, honest and transparent way with everyone they meet. "Be straightforward; no politics," Lawson explains. "That's how we talk to customers and deal with each other--to their face and not behind their back."

"Start with why" means employees should get to know customers' pain points and needs. All new hires have to build an application using Twilio's platform--even if they haven't coded before--and must resolve 20 customer-service calls.

Upon completing those tasks, employees are presented with a Kindle. Then Lawson sets them free within the company. "A successful CEO lets people determine what they should do and how to hold themselves accountable," he says. "If they're having problems, they come to me, and we demolish them together. Otherwise, I just stay out of their way. You need the trust factor. CEOs need to come up with the right tools to create that trust." --Vanessa Richardson

Dave Kerpen, Likeable Media

Dave Kerpen, Likeable Media
Photo (C) David Johnson

Nice Guys Finish First

Dave Kerpen, Likeable Media

Dave Kerpen literally wrote the book on leadership. The co-founder and chairman of Likeable Media is the author of Likeable Business: Why Today's Consumers Demand More and How Leaders Can Deliver, a 2012 volume documenting the philosophies behind the growth of his New York City-based social media marketing firm, whose clients include GE, Adobe, Neutrogena, HarperCollins Publishers and Verizon FiOS.

Kerpen launched Likeable Media in 2007 with his wife, Carrie, who took over as CEO in early 2013 to allow Dave to focus on expanding Likeable Local, a software platform that offers social media tools optimized for small businesses. The platform boasts more than 500 customers and a monthly run rate in excess of $1.2 million, an evolution Kerpen attributes to its adherence to cornerstone principles like listening and responsiveness. "Those are key principles not only for social media, but also for all great leaders and businesses," he says. "The old-school, top-down way of doing business no longer works.""Social media has made business more transparent than ever before," says Kerpen, whose other books include Likeable Leadership: A Collection of 65+ Inspirational Stories on Marketing, Your Career, Social Media & More. "The challenge facing successful leaders is being more open to this new world we live in. They must be more authentic, more vulnerable and more grateful."

Kerpen's philosophy venerates the golden rule of leadership: "By showing others the same courtesy you expect from them, you will gain more respect from co-workers, customers and business partners." He extends that further with what he calls "the platinum rule": "Do unto others as they would want done to them." In other words, put yourself in the position of colleagues, partners or clients to better understand their perspectives.

"Companies take on the character of their leaders. If you create a cutthroat, competitive environment, people are going to follow that model," Kerpen says. "I believe that long-term success and happiness are more correlated to the values I write about. Authenticity and vulnerability don't necessarily drive you to the top, but they do make it a lot easier to sleep at night." --J.A.

Dawn Halfaker, Halfaker and Associates

Dawn Halfaker, Halfaker and Associates
Illustration (C) Brett Affrunti

Soldiering On

Dawn Halfaker, Halfaker and Associates

Dawn Halfaker always knew she wanted to lead. After graduating from the U.S. Military Academy, she became a police captain in the Army, leading troops in Iraq. But after driving into an ambush during a routine patrol in 2004, Halfaker emerged from a coma back in the U.S., without her right arm. At age 25, she had no idea what to do next.

She chose to move on, starting as a consultant for defense contractors. But believing she could do a better job keeping the military in touch with cutting-edge technology, she started Halfaker and Associates in Arlington, Va. Her 100 employees help government clients, including the Department of Defense and Department of Veterans Affairs, with everything from data analytics to software engineering and cyber-security services."I sat in the hospital bed, soul-searching," she says. "All I wanted was to be with my platoon back in Iraq. I could either feel sorry for myself or turn adversity into opportunity and move on with life."

It's no surprise that she leads her staff (25 percent are military vets) similarly to how she led her soldiers. "I made my corporate motto 'Continuing to serve,' because I wanted to attract people who wanted to be part of a mission, something bigger than themselves," she says. "In the military, it's not about yourself; it's about being committed to your company and to each other. Solid teamwork and accountability are key in the office."

But Halfaker has learned one big difference between being an Army officer and being a CEO: Sometimes you have to let employees step out of formation. "I give them room to be creative and innovative, because that's the best way a company can grow," she says. "The military rigor of micromanaging can't be applied to the same degree, but it has been a big adjustment figuring out how to have an efficient organization without sacrificing innovation."

Halfaker uses corporate incentives like flextime and telecommuting to score top talent. She also helps employees support nonprofit causes with the company's backing. If someone wants to organize a blood drive or a run for wounded warriors, Halfaker's staff will help set it up and raise money. "It shows the company is not just about profits; it's about how we use our people and resources for the greater good," she explains.

One thing the military does well is strategic planning, and Halfaker brought that concept to her company. "Everyone knows their objective, and that ties all units together, from the Secretary of Defense on down, which is what makes the military so powerful," she says. "So what I do is make sure everyone is on the same page and the corporate objectives are transparent so that everyone knows how to contribute to our overall success."

Today's newest veterans often have a hard time finding work in the civilian world, as many companies seem to undervalue the merits of military training. Halfaker says employers won't regret taking a chance on former soldiers.

"Many businesses are focused on having to do more with less, cutting costs and maximizing returns," she points out. "The people who will be successful at doing it for you are those who are mission-focused, go all in and see success as the only option. That's the focus the military gives its soldiers. They possess skill sets that are reliable, relevant and useful to any company." --V.R.

Next-gen Nurturing

Tom Nieman, Fromm Family Foods

Next-gen Nurturing

Tom Nieman, Fromm Family Foods

Tom Nieman, owner and president of Mequon, Wis.-based Fromm Family Foods, leads with a "hands-on approach." The proof? He often smells like the product his family has produced for generations: dog food. "Of course I should smell like my workers [do]," says Nieman, who took over in 1984 (and whose grandmother was a Fromm). "I teach them how to make the product."

The Fromms got their start in 1904 raising foxes for fur and growing ginseng. Their knowledge of animal nutrition led to a pet-food business. Nieman is the fourth-generation owner of the company, which saw revenue "more than triple" between 2010 and 2013. If they prove themselves worthy--you don't just get handed the keys at Fromm--Bryan and his brother Dan will take over next.Nieman's take on leadership comes from his family's long agricultural tradition. No job is beneath anybody. "Just like each of our best employees and family members, our title is just the tip of the iceberg," says his son Bryan, Fromm's brand director.

The senior team is actively involved in the next generation's success. Dan and Bryan each work directly with a senior manager who can guide them in Nieman's philosophies without extra preaching from Dad. "They communicate to them, 'So, your dad works this way,' and they can give it to them in a different type of delivery," Nieman says.

He'll continue to come to work long after his sons take over (just as his 80-something mother does). He jokes about making the company golf-cart accessible so he can get around. After all, you don't walk away from family. --Jenna Schnuer

Ayah Bdeir, littleBits

Ayah Bdeir, littleBits
Photo (C) Ewan Burns

Engineering Growth

Ayah Bdeir, littleBits

Founded in 2011, littleBits--dubbed "Legos for the iPad generation"--has sold its kits in 60 countries. Bdeir, considered one of the leaders in the open-source-hardware movement, says her engineering background has had a strong influence on how she manages her staff of 31.Ayah Bdeir, founder of littleBits, a line of magnetic modules that let kids make their own electronic creations, never stops asking herself how she can make things better. "Leadership is hard work. You have to be continuously questioning yourself and your methods and evaluating what's working and what's not working," she says. "You have to think about something 24/7, obsess over why a problem is the way it is and obsess over different hypotheses, because the first 30 don't work and the 31st is the one that works."

"Everything is a problem that can be solved. It's about identifying a problem, coming up with a hypothesis on why it's happening and then testing out the hypothesis," she says. "It's the classic engineering problem-solving cycle I go through, whether it's a marketing campaign that didn't get as many hits or a hire in the company that's not working out."

Bdeir has built littleBits with this mindset. "There's never any shame in pointing out any problem, and there is no ego in the company, so anybody should and can point out something," she says. "We want to put it out there and solve it, and as a result our team is very strong, cohesive and collaborative." --M.J.

Richard Sheridan, Menlo Innovations

Richard Sheridan, Menlo Innovations
Illustration (C) Brett Affrunti

Joy Division

Richard Sheridan, Menlo Innovations

Last February, three months into a job with IT support firm Dynamic Edge, Lisamarie Babik was invited to resign. After 10 years with custom software developer Menlo Innovations, the veteran programmer couldn't catch on with her new company's old-school thinking. "I had been at Menlo so long that I thought the world had gotten better," she says. "I guess it hadn't."

Occupying a 17,000-square-foot, repurposed food court in the basement of a seven-story parking garage, the 50-person company has a flexible, open office with no walls, doors or cubicles, and few rules. If workers want their table in a particular spot, they just move it there. "An organization of joy should be identifiable from every angle," Sheridan writes in his book. "They need to see it and hear it for themselves from the first moment they encounter your space."Perhaps Menlo had become too innovative for its employees' good. Founded in 2001, the Ann Arbor, Mich.-based company employs unconventional tactics to make "joy," not profits, its primary goal. Co-founder Richard Sheridan, author of Joy, Inc.: How We Built a Workplace People Love, hopes the company's experimental methods--which include pairing programmers at shared workstations and instituting a boss-less hierarchy in which anyone can contribute to decisions--will eliminate the fear, ambiguity and doubt that stifle most operations.

He contends that Menlo's employees benefit greatly from the company's methods. For example, paired programmers are able to learn technical and interpersonal skills at breakneck speeds and make (and recover from) mistakes more quickly--all while sharing a keyboard and mouse.

"The amount of technology you've been exposed to here, the number of domains you'll deep-dive into, the number of projects that actually see the light of day ... give you a leg up on most others who are still figuring out how to make coffee in the conference rooms," Sheridan says.

All this is accomplished within strictly maintained 40-hour workweeks, with no possibility for overtime. Anonymous reviews on Glassdoor lament Menlo's underwhelming pay and lack of private space, sacrifices Sheridan acknowledges. And because these things are not for everyone, staffers sometimes leave.

But after Menlo, they can struggle to fit in at other companies. Babik says that while working for Sheridan, she matured into a "fearless creature," unafraid to speak her mind. So, rather than offering her resignation at Dynamic Edge, she suggested the company create a new position just for her. Today, as the "Dyneducator," Babik employs Menlo's practices at her new company by orienting new employees and producing training materials. "You don't stop being a Menlonian when you leave," she says. "You're changed--you can't turn it off."

Menlo's paired workers and open communication channels constantly create friction and teach resolution. "You and I are going to have interpersonal conflict with one another, guaranteed," Sheridan says. "What if we make the opportunity for it to happen every minute of every day, and then coach people in how to deal with the conflicts as they arise?" That may sound like a killjoy--but clearly, it works. --John Patrick Pullen