Bringing an Entrepreneurial Employee on Board
One of chris Shonk's newest employees is the last person some entrepreneurs would want to hire. Brad Bentz, 38, was just out of a university MBA program for entrepreneurs when he joined Virtus Financial Groupin June 2005. Shonk, 32, wanted the newly minted MBA's resourcefulness and adaptability on the $3.3 million financial services company's 15-person team-and didn't worry about Bentz leaving to start his own company.
"Some people don't want to hire entrepreneurial-minded employees," Shonk acknowledges. "But when you have people who can not only recognize a potential opportunity or threat but also have the latitude to act responsibly and capitalize--that's where entrepreneurship pays dividends."
It's not unusual for companies to hire entrepreneurial-minded employees. Tom Kinnear, executive director of the entrepreneurial studies institute at the University of Michigan, Ann Arbor, guesses that 80 percent of his program's students take
Jobs after graduating rather than starting their own companies. Even 10 years later, an estimated 65 percent are employees rather than entrepreneurs. "We don't expect that most of them will ever make the jump and start their own businesses," Kinnear says.
A part of the reason many would-be entrepreneurs don't start their own businesses is that employers find them so attractive. Innovation is probably the most frequently cited benefit for employers. Entrepreneurship students "are always looking for ideas and new ways of doing things," Kinnear says. "That mind-set is part of what employers are looking for."
Employees with entrepreneurial backgrounds, whether as students or as former business creators, also have a sound grasp of how and when to take chances. "They have a prudent sense of risk taking," Kinnear explains. "That doesn't mean they're wild and crazy. They know how to balance risk."
Entrepreneurs are also persistent and action-oriented, Kinnear adds. "They aren't easily discouraged. They are willing to work very hard if the rewards are right."
Getting the rewards right requires some effort, says Leo J. Sheridan, president and founder of Advanced Group of Companies, a 125-person Northbrook, Illinois, staffing and HR firm. Sheridan, 46, says he seeks out entrepreneurs to hire as heads of his different business units. "I certainly wouldn't put an entrepreneur into a rote job," he says. "They have to be in a creative position, and they have to be running the show."
Sheridan also structures compensation so that entrepreneurs at the $50 million sales firm are rewarded for performance with equity and large bonuses if they exceed expectations. "That gets to what they are all about," he says.
The risky side of hiring an entrepreneur is dominated by the concern that the employee will leave to start his or her own business. "I wonder if this person is really going to be with me for a while or [if the person will] come in, learn whatever we can give them and go off on their own," Sheridan says.
Entrepreneurs can manage that risk by making sure the entrepreneurial-minded employee gets enough stimulation, freedom and reward from the job so starting a business isn't quite as attractive. "If it's set up right and you're feeding what drives them, you can create an environment where they'll be really successful," says Sheridan.
That's exactly the kind of environment Shonk has tried to create for his recent hire, and it's the kind Bentz thinks he has found at Virtus Financial Group. The learning opportunities and financial rewards should keep him at his new job for quite some time: "There's almost no limit on your growth potential," Bentz says, "so there's less [inclination] to feel at some point that you've hit a ceiling and there's no way to grow."
That's the same optimistic hope his new employer has for the company, thanks in part to his latest hire. Says Shonk, "If you get entrepreneurs and incentivize them properly, there's nobody out there who can stop you."