When Martin Renkis founded Cary, North Carolina-based learning software company Trainersoft.com Corp. eight years ago, he was the company. He did all the work alone, putting in 17-hour days amid the rented confines of his 6-foot-by-8-foot office space in a Nashville, Tennessee, office building. For Renkis, a typical day meant working from 8:30 a.m. to 7 p.m., then trekking to a nearby pub for dinner before heading back to the office and working until 1 or 2 in the morning. He was in survival mode. "I was doing everything myself and kept thinking, 'What do I need to do to get some business today?' There were times that my phone and electricity were cut off because I couldn't pay the bills," he says.
Most entrepreneurs can relate to Renkis' story. After all, starting a company can easily consume every waking moment, especially in the early years when an entrepreneur is single-handedly keeping the company afloat. Eventually, every successful company reaches a point where it's time to hire some employees. Renkis hired his first employee, a sales assistant who "did a bit of everything," a year and a half after he started Trainersoft. But while Renkis continued on his typical schedule, he noticed that his employee was heading out the door by 6 p.m. to spend time with his kids. It didn't sit well with Renkis. "I'd still be working, and this guy would leave for the day," says Renkis, 38. "I'd be seething inside, thinking, 'Where is his commitment to my company?' It took me years to change my way of thinking."
It's easy for new entrepreneurs to expect the same level of dedication from employees that they expect from themselves. In fact, most entrepreneurs have a blind spot when it comes to setting reasonable expectations for workers, according to Andrew DuBrin, an industrial psychologist and professor of management at the Rochester Institute of Technology in Rochester, New York. "Entrepreneurs are so wrapped up in building the company that they automatically assume employees have the same level of commitment," he says. "But you have to be realistic because the employee is not the owner. This forces you to set reasonable expectations." But in this "new economy," where people eat, sleep and breathe work, what is reasonable?
A Different Mind Set
Being an entrepreneur automatically puts you in a unique group of risk-takers. But the concept of self-employment-or, as Renkis calls it, "holding up the sky"-can be a hard one to translate for employees who have never done it. So while you are wondering how to stay in business next month, chances are, a number of your employees are seeking the security of a paycheck and a few years of job experience. This fundamental shift in mind-set escapes many who run businesses. As an entrepreneur, you have to realize that most employees can't relate to some of the pressures that are part of being the CEO of a fledgling company. "Ninety-five percent of people work to pay the bills. They aren't entrepreneurs," says Tony Jeary, an entrepreneurial success coach and the CEO of Dallas-based High Performance Resources Inc.
An employer should expect an employee's best efforts, and offering financial incentives, or "golden handcuffs," is certainly a motivating factor for employees to be loyal and to perform well. But failing to distinguish the entrepreneurial role from the employee role leads to frustration, burnout and turnover. DuBrin has seen it in the employees he's counseled who work for entrepreneurial businesses. "They say, 'I work for a madman who thinks [the employees] own the business.' It leads to a lot of resentment," he says. "Especially if it consumes an employee's entire life."
Terry Gold, 41, CEO of Boulder, Colorado-based Gold Systems Inc., a privately held software applications company with 70 employees, also found out the hard way. "Since I started the company, there have been a lot of lessons learned. A big lesson I had to learn is that you can't hire founders," says Gold. Sales this year are estimated to be about $7 million, and the company was on Deloitte and Touche's 1999 Fast 50 list as one of the fastest-growing companies in Colorado. But back when Gold co-founded the company in 1991, he struggled with how to set his expectations of employees. "It's tempting to make your employees share the pain. But they aren't signing on to be entrepreneurs," Gold says.
Separating themselves from the company, however, is hard for many business owners. The business can easily become the entrepreneur's whole identity. Gold says he didn't realize that starting a company would consume his mind. Sometimes it was difficult for him to distinguish a life outside of work for himself, not to mention for his employees. "I didn't think like an employee and it caused problems," he says. "At certain points, this just wasn't a fun place to work." Today, Gold offers advice to frustrated entrepreneurs, and has created a Web site devoted to problem-solving.
Setting reasonable expectations of employees depends on hiring for the right fit, creating a clear blueprint for employees to follow and working with them to define what is reasonable. But entrepreneurs make some common mistakes, like being so focused on bringing certain skills into their companies that they don't think in-depth about the work culture they want to create. Gold says he often listens to fledgling entrepreneurs say they only care that their future employees can sell or write code. A company's work culture, however, defines the business and underlies its success-or failure-and employees need to understand the core values that underlie your expectations of them on the job. "The skills don't matter if you can't sell employees on your company's values," Gold says.
Also, while entrepreneurs are visionaries who are good at starting things, they often have a hard time creating job procedures and tracking employee progress, according to Sharon Ragsdale, a Raleigh, North Carolina, executive coach who helps entrepreneurs develop leadership and life management skills. For employees, work becomes a game of juggling an unstructured workload while trying to read their bosses' minds. "If there's no framework for the employee's job, of course the employee will do it wrong," Ragsdale says. "Then there's frustration on both sides."
Another common problem in the entrepreneurial workplace is establishing a reasonable time commitment. Renkis admits being angry at employees who didn't see the business opportunities the same way he did and weren't showing their devotion by staying late. He credits change to his wife, Laura, who told him that he set an expectation when he didn't tell employees that he would like them to take the initiative of putting in some extra hours. It was a big lesson. "I kept thinking, 'Why aren't they performing well?' when it came down to my expectations. The groundwork had to be in place, and it all came down to me," he says.
Renkis has learned to communicate and set clear expectations. Now business is not about survival but growth: 25 percent of Fortune 500 companies use the company's training software and Trainersoft is averaging $5 million in annual sales. Renkis employs 17 employees in a variety of positions from sales to marketing to tech support, and the company recently moved to a 10,000-square-foot space.
What Is Reasonable?
Setting reasonable expectations of employees begins with finding out what motivates them to come to your company every day. Are they with you for money? Work experience? A specific type of project they can't find elsewhere? Do they have a special commitment to your vision? Learning how employees think will clue you in to why they do things the way they do.
Jeary sees the relationship between entrepreneur and employee as a growth process where the entrepreneur has to separate from the business enough to realize that every employees has his or her own unique approach to work. "There's a maturation process entrepreneurs go through, where he or she figures out that employees have their own life goals," he says.
Making the connection that employees aren't entrepreneurs takes time-seven years on average, according to Ragsdale. For Renkis, time has meant coming full circle. He says that he went through a phase where he expected everyone he hired to be just like him. Now things are different. "I've come out the other end and learned to genuinely respect other people," he says. "I can see the big picture now and how my employees fit into it." One of his employees is openly running a small business on the side, something Renkis encouraged.
Gold has this tip for entrepreneurs: Don't worry; it's normal to feel that no one works as hard for your company or cares as much about it as you do. This is where some self-analysis comes in handy. Are you holding a grudge toward your employees over some expectation you've never voiced? Step back and look at the culture you're creating and how you're communicating your needs. "Realize that you've got to work on the business, not just be in the business," Gold says. Talk to employees to determine what they see as reasonable to expect from a day's work. Finding a peer group and creating a board of advisors where you can get advice are valuable, too. Gold says that taking those steps made a big difference for him. "As an entrepreneur, you need to do these things to survive," Gold says. And the sooner you do them, the better.