Drive Operational Effectiveness Through The Right Relationships With Your Teams
People leave our businesses, but how they leave counts. If you've built good relationships with your employees it will hurt when they leave, but you'll both have benefited from the experience.
A subject that is not covered extensively in entrepreneurial literature but which probably affects us more than most, is that of our staff leaving.
Staff who leave impact the business and often even emotionally impact on ourselves. By far the majority of earl- stage entrepreneurs I have encountered take the leaving of a staff member incredibly personally, seeing it as yet another rejection, another disconfirmation of their ability or even probability to succeed.
Even though the pain never goes away completely, what is certainly true from my experience is that over time, as you experience more exits of employees on your journey, the pain diminishes. And there is a point on your journey where, despite the pain, there comes a level of acceptance.
This article is written for those entrepreneurs who are still on their journeys to acceptance and to those employees who work for crazy entrepreneurs, so that they can better understand where their bosses are coming from and how to exit an entrepreneurial company in an elegant and dignified manner.
To the entrepreneur
Transactional versus relational
There are two types of relationship you can have with your employees – transactional and relational. Transactional relationships are an unemotional exchange of value.
The employee is contracted to deliver a certain output and you pay them for that output. If they produce higher than expected levels of output, there is a higher probability of more money or a promotion. If the output levels are lower than expected, there is a high probability of exit.
Relational employer–employer relationships also require an exchange of value. However, they encompass the personal and situational needs of both parties as well.
For example, if an employee is going through a divorce, the employer is more likely not to expect the required output for a certain period of time. The corollary to that is that the employee would not hesitate to support the boss during a crisis when more than the contracted output is required.
Although it's impossible for an organisation to have relational relationships with all of their staff, it is my experience that those organisations with higher levels of relational relationships between entrepreneur and employee (or manager and employee) operate more effectively and are more flexible.
The cue for which type of relationship – transactional or relational – will dominate the culture comes from the entrepreneur.
The DNA of the organisation's culture is imbedded within the few first months of its inception and is predominantly based on the type of relationship the entrepreneur has with his or her original employees and their relationships with their subordinates.
The law of impermanence
The law of impermanence states that nothing with remain the same forever and, by default, neither will your employees.
No matter how great your relationships, no matter how perfect the exchange of value, things will change. For some that change means more or different responsibilities or a promotion. For others, many others, it means the exit from your business.
I am reminded of a quote from M Scott Peck's The Road Less Travelled when he says, "Once we truly know that life is difficult – once we truly understand and accept it – then life is no longer difficult. Because once it is accepted, the fact that life is difficult no longer matters."
This wisdom can be applied very directly to a valuable employee leaving or shifting. It's just going to happen. They are simply abiding by the law of impermanence.
We are best-supporting actors
Most entrepreneurs I've come across – even if they won't admit it – live in some Hollywood-like drama about their journey towards building a great company. It is filled with trials and tribulations, victories and villains, and the entrepreneur sits squarely as the central character.
Ironically, this narcissistic and egocentric view of the world is necessary for the entrepreneur to grow. However, it creates an incredibly large blind spot which could cause their downfall.
Every day, when Miss Moneypenny comes to work, she is the main actress with James Bond, Q and M merely supporting actors in her Hollywood movie. Miss Moneypenny might be given the opportunity to work for the CIA or simply tire of 007's misogynistic behaviour and will then move on to the next chapter of her movie.
I think it's imperative for entrepreneurs to design formal one-on-one engagements with their employees and make sure they are diarised.
The engagements should encourage two-way feedback and the entrepreneur should be particularly alert to any frustrations or issues their employees may have.
Very often, issues boil down to a simple misunderstanding or misconception that can be easily explained and ironed out. Your focus can then be directed to real issues with a view to a resolution.
Such one-on-one meetings create a higher-fidelity message, create more intimacy between you and your employee, and offer a phenomenal opportunity for constructive feedback and on-the-ground intelligence.
Something I keep reminding myself and other entrepreneurs about is to remain kind. As we whizz off from one meeting to the next, our vision squarely planted in front of our eyes, entrepreneurs have a strong tendency to not acknowledge others around them.
Often, we don't greet people – not because we don't want to but because our minds are on 37 other things. In the many human transactions we have each day, efficiency is the only way to get through the high volumes.
This often translates into one-word answers with no eye contact, and the recipients mostly interpret this in a negative way. Be aware of this and, where possible, slow down, listen more intently and respond in a more comprehensive manner in a kind tone. It means a lot and really does have an impact.
To the employee
Working with entrepreneurs is tough. As mentioned above, you are the main actor in your own movie and that crazy entrepreneurial boss of yours is but a supporting actor – or sometimes even the villain.
If you are the transactional type of employee who likes working from nine to five and doesn't really care then read no further. However, if you are the relational type, below are a few pointers on how to exit an entrepreneurial firm the right way.
Give ample warning
The moment you start feeling that you aren't growing or that there's more financial opportunity elsewhere or indeed that the business is in a precarious situation, use your one-on-one time with your boss to express these feelings in a constructive manner, sharing what it is that is making your feet itch or feel insecure.
Doing so will create one of two outcomes: Either your boss will listen and take action to meet your needs; or the shock will be substantially diminished when you hand in that resignation letter sometime in the future. The general rule of thumb is to speak out earlier and not the day after you've handed in your letter.
If you are going to resign, ideally you should consider the time it will take to replace you and provide the business with sufficient time to find a replacement – either internally or externally.
One of my previous PAs not only gave me four months' notice when she resigned but actually searched for, interviewed and shortlisted a number of replacements before she left. The impact of her departure was minimal and she has always since been welcome to visit and, indeed, reapply for another role in the future.
Leave everything with a bow
Resist the natural human impulse to take your foot off the pedal – both physically and emotionally – from the small business you're about to leave. Categorise all your functions, and identify all unfinished projects and do your damnedest to conclude them in the time you have remaining.
In the same spirit, write comprehensive notes and instructions to your successor and, if they arrive before you leave, spend days with them going through each element of your role and, in particular, any outstanding projects. Another important thing to remember is the handover to your boss.
Spend time with him or her going through the same handover agenda as you do with your successor. Ensure that he or she knows where everything is filed, where your passwords are kept and what important relationships need to be maintained with suppliers, clients, etc.
Once you have left, unanticipated events will invariably arise. Make sure you remain accessible to both your successor and former boss for a few weeks or months in case they need questions answered or anything clarified. A nice touch would be to check in with them from time to time to ensure that everything is running smoothly.
To both entrepreneur and employee
The crux of this article is that both parties should be human, should be kind and should be courteous. Neither should take the exit personally and both should wish the other every success going forward.
The market is small and our time spent in it is long. Who knows when you, as the boss, may need to resolicit a former employee back into a new and more exciting role? And, as an employee, who knows if those greener pastures you are leaving for are indeed greener?