Wisdom Without Waiting: How do you keep them down on the farm once they've seen dot-com?
How do you keep them down on the farm once they've seen dot-com?
© John L. Mariotti 2000
Maybe this was a more serious problem a year ago-before dot-coms ran into reality and ran out of cash. It's still a problem, but for a different reason than originally thought. People leave old economy companies for the new economy companies ("dot-coms") primarily for three reasons:
- wealth building potential;
- a chance to contribute and have fun at the same time;
- to feel part of building something new and exciting.
The first appeal of dot-coms for employees from your old economy "farm" is the pot-of-gold represented by stock options. It's hard to build real wealth on a salary and even on a bonus. The real way to build personal wealth is by building wealth for shareholders and being one of them. Radical idea, huh?
That's tough to deal with if your company has a typical (anal-retentive) old economy stock option policy. God forbid you would dilute the ownership of who? The large institutional investors, that's who. In most companies, institutional investors (mutual and pension funds) own most of the shares. So why not dilute them to keep good people and build the stock's value.
After all, you talk about wanting people to have "ownership" of what they do for the company. Well, here's a way to give it to them-and get something in return. And heck, stock options don't even count against earnings like regular cash salaries and bonuses.
ADVICE-Give out lots more stock options, further down the organization!
Most of those attracted by dot-com riches could use a little lesson in the economics of options and their tax consequences anyway. A simple series of articles-in the company newsletter or the email "grapevine"-would do it. Find examples of where the stock price spiked up right after the IPO and then plummeted later-leaving those who grabbed some of their new found wealth finally owing a larger tax bill than all their shares were worth!
ADVICE-Prove that the pasture is not always greener over there at dot-com!
The second appeal of dot-coms is that the environment is not stifling, not structured, not stuffy, and not even quite like work at all! Let's see, the dot-coms actually let people have fun and offer home-like amenities for people who work 15-20 hours a day. That's not such a bad tradeoff. Of course they dress poorly. But then who wants to sleep in a $700 suit after working around the clock to create something really new and valuable. How many hours do your people work? Would you be trampled if you stood in the corridor by the exit at "quitting time?" Probably!
Dot-coms don't have a "quitting time" or a "starting time". So no one is ever late or leaves early-saves a lot of time keeping track of absenteeism. If people are really involved in what they do, they produce. And if the leadership creates an environment where excitement, enthusiasm, and lots of energy are downright OK, who knows what might happen. Maybe people would stay "down on the farm" at your old-economy company!
ADVICE-Create a more home-like comfortable environment.
The third reason people leave is to escape in hopes of finding a better, more interesting place to work-or actually not having to work at all. Those are two different kinds of turnover. The latter type people, you should be happy to lose. You know who they are! The former types are the problem. These are the high potential people, and losing them hurts. You know who most of them are too! The answer here is a preemptive strike to keep them. How?
Here's how. Throw out the rule book. If you have a Hay system or similar mediocrity-inducing central-tendency horse collar, break its rules or get rid of it. Such systems drive off the best and brightest people and retain the mediocre ones. You know why. The system won't let you reward them for their true value and uniqueness.
There's a damning phrase: "The system won't let you". Whose system is it anyway? Yours, of course-you paid dearly for it-so you could "structure" things and not face those difficult (subjective) people decisions. Well, guess what-you still have to face them, but the system gets in the way of doing what's best.
ADVICE-Go outside the system or trash it entirely. Promote young "hi-po" people. Make up cool titles for them. Give them insane raises and stock options.
That's what the dot-coms do. You'll do it to get them back after they're gone, so why not do it before they leave. It'll cost less now than later anyway. Give people who are a full generation or two younger than you'd normally consider ready, the responsibility for some major projects, functions, teams, divisions, whatever you call them. Assign them a "graybeard" counselor to help them avoid known pitfalls. But for heavens sake, don't make them "report to" the graybeard. If you do that, just start looking for their replacements.
ADVICE-Promote on potential not age, rank or length of service.
Let them set their own hours, dress codes, convert cubicles to quasi-apartments, put in music of their own choice, hang posters, connect to the Internet at will, and so on. Ask them to set the rules for their own groups-and tell you what they are. Of course your senior management will want to have you committed for doing this, so find an area off the beaten track where it's not so obvious to the remainder of the old-economy drones.
ADVICE-Tell them what you want done, and what are the constraints. Just don't tell them how to do it. Let them have freedom (both professional and physical), provide resources and seasoned mentors (only when they want them)-and stand back-but expect results!
How do I know this works? Because I did it-long before dot-com was the threat or even a term-and it will work long after the dot-com craze is over. It not only works but the best people get the bragging rights for making it work-and they will stay with you "down on the farm"!
