When the thrill is gone - retaining managers at growing small businesses

Nation's Business, March, 1988 by Cowan Robert A.

When The Thrill Is Gone

Many entrepreneurs find that once their small, seat-of-the-pants businesses become more established and more professionally run, something awful happens. The invigorating esprit de corps that kept their committed cadre of engineers, salespeople, executives and middle managers working round the clock to launch those companies evaporates. As a result, their most gifted employees start to leave.

A certain amount of attrition among original managers is natural as a new business moves to the second stage of growth. That's because some achievers flourish in those exhilarating, initial phases of development but grow bored with routine.

And it's not just entrepreneurial firms that feel the draft from an open door. Ambitious professionals now switch posts an average of every 2 1/2 years, mostly because they're convinced it's the only way they can advance.

The defection of competent professionals can be costly in terms of productivity, employee morale and the bottom line. The costs include the expense of recruiting and training replacements. And it can be especially troublesome as a business moves out of the start-up phase. Losing even one or two key employees can derail a start-up firm before it has a chance to get firmly established.

The first step in preventing the loss of valuable middle managers and other competent employees is to find out if they are unhappy and exactly what is bothering them. A classic problem in growing firms is that entrepreneurs are so busy concentrating on building their business that they don't pay attention to internal beefs until it's too late, says Mitchell Lee Marks, a professor of organizational psychology at the California School of Professional Psychology in Los Angeles. "But you must check with your people."

Sound out subordinates and let them air their grievances. As an executive recruiter, I've heard every kind of complaint imaginable from frustrated executives, managers and professionals about why they want to leave their employers. But the real reasons why talented professionals leave small and medium-sized companies usually boil down to a handful of common--and often easily remedied--concerns derived from the company's growth from infancy to adolescence and beyond.

Some of those innovative mavericks who sparked your firm's start-up may feel that the thrill is gone and they are stagnating. Others may feel their personalities clash with the changed corporate culture. And a handful just won't fit in.

Still others may feel that they're not being compensated fairly for their considerable efforts on behalf of the company. A few may feel powerless because they don't have much of a voice in the more professionally run company. Some may think that they're just languishing in an area where they once played important roles.

These are legitimate gripes. But how can you re-create the indefinable chemistry that once made your company such an exciting place to work? How can you revitalize company loyalty? Build team spirit? Boost motivation and performance?

In short, what can you do to create a corporate atmosphere that's just too good to leave? Plenty. Here are some of the approaches that seem to work best.

Think about broadening the current range of responsibilities of your talented professionals. Can you assign them additional tasks that emphasize their strengths, such as brainstorming new marketing strategies or improving your product line?

Start a career-development program to help your top performers identify and sharpen their skills and talents and determine how their particular gifts can be used in your new stage of growth. Most small to midsized firms don't have the resources to establish such programs in-house. But many universities and consulting companies offer excellent managerial-level career-development classes.

Investing in such training seminars enables your best people to test their limits and expand their professional horizons, and it assures them that there's potential for advancement in your company.

And if you discuss the training with an employee afterward, you can work together toward making sure the employee is matched with the right challenge.

"More than half the people I meet are simply in the wrong jobs, and even more are not working to their potentials," says William Ellermeyer, president of Career Management Services, an outplacement firm in Irvine, Calif. "But those who are in sync with their jobs are naturally motivated to produce more because they're using their inherent abilities."

Reward your best employees. Nothing is more annoying to a manager who consistently makes an extra effort than to be lumped in the same compensation category as clock-watching nine-to-fivers. A typical comment came from a disgruntled marketing manager who had masterminded an advertising campaign that had helped triple his company's sales: "The salary structure here is a sacred cow. No matter what you contribute, you are locked into a fixed income, and they refuse to bend, even for their best people."