What to Do When Your Employees Want to Start Their Own Business
Leaders, think of your smart, driven, innovative team members. Those few at the top who streamline systems and boost morale. Would you say they remind you of yourself? Would you say they are entrepreneurial? Guess what? Some of them are. In fact, just last year Global Entrepreneurship Monitor reported that roughly between 15 and 20 percent of the workforce is engaged in running a startup. With barriers to entry and startup costs low, it’s never been easier to do so. But that doesn't mean it is easy to accept that some of your top-talented employees are thinking of jumping ship and leaving for their own adventure.
So what’s a CEO to do?
Look for the warning signs.
Often when people are toying with the possibility of starting their own business, they are actively building up their presence. They are becoming increasingly active on LinkedIn. They are blogging more or posting more about their work on social media.
They are interacting more with client contacts or account representatives, even if only in a friendly capacity, online or in person. They are becoming more active in community organizations or industry clubs. They are reading, tweeting and sharing posts from sites covering entrepreneurship, small business, online marketing, or dream chasing, all of which market to aspiring entrepreneurs. They also are talking more about their "hobby" in person and through social-media channels.
Consider a proactive approach.If you suspect one of your best might have the entrepreneurial itch, consider approaching them about it. This may be a hard pill to swallow, but how much better to plan for their exit than to be blindsided one Friday morning? You could ask them where they see themselves in a few years, or directly ask them if they’ve considered starting their own business. I realize this approach may not be for everyone or people may be hesitant to ask as it opens up a whole new can or worms but for many aspiring entrepreneurs, the seed has already been planted. So, if possible, try to make the most of it. If you openly discuss their plans, you can work out a non-compete agreement that protects your current clientele and employees. You can offer to help them “spread their wings” with a few final high-visibility projects. This way you are in control of how and when they exit.
Capitalize on their drive (and ego).Entrepreneurial types know that they are truly working for themselves, no matter where employed. You can use their ambition to your advantage. For instance, if their hobby can be used within your company, do so. For example, a photography buff could become the in-house photographer.
Assign them to highly visible projects or initiatives that will result in a noteworthy before-and-after case study. Hand off stalled internal initiatives to them to finish and actually launch. The key is to let them “own” and promote these projects. The more of these they have, the longer they are likely to stay – hopefully. Keep in mind, by focusing on the "intrapreneur" strategy, or having a corporate culture that keeps entrepreneurs content, people may end up staying. Google, HP and Unilever are famous for this sort of culture.
Also, nothing will push them from the nest faster than asking them to work hard for a project that is credited to “Company Team Member.” If their name is attached to a project they will put extra effort into its execution and promotion. That said, make sure the project does fall in line with the company's needs and provides value to your business.
Publicize their solo success.You can capitalize on their success as a “Company Alumnus.” This will attract other go-getters who want to learn from the best and be known as the best. Yes, you’ll probably have to change your hiring tactics and policies for high-risk employees. But you can appeal to them with the tactics discussed in point two, above, and then have them commit to staying employed for a certain amount of time via contract. This may mean your best people won’t be “lifers” but news flash: the age of “lifers” is over. Indeed, according to multiple surveys by Pay Scale/Millennial Branding and Future Workplace millennials expect to stay in a job about two years, compared to five years for Generation X and seven years for Baby Boomers. As each one of your former employees reaches success, the company just looks better and better. Think of the PR: You’re growing leaders, creating more jobs, helping the local economy, investing in the world-shapers of tomorrow, the list goes on.
Keep open lines of communication.
While employees may leave to start their own company, I suggest keeping lines of communication open. This would be the time to take on a bigger role and have a larger impact in the entrepreneur's vision. You can mentor, provide networking opportunities or offer priceless introductions. Not only does it feel good to give back, but there could be opportunities for reciprocity.
I believe, as a former executive who had the itch myself, that we have entered a new era. Today, it is safe to assume your best employees are essentially consultants or contractors. They may only stay a few years, but in that time will revitalize departments, improve morale, solve large problems and make your company look better than ever…if you let them.