If you want your employees to stay engaged and motivated, and you want to increase retention rates, encourage your employees to start side businesses. That's right! You didn't misread what I wrote.
Don't worry -- not all of your employees will start side ventures, just your smartest and most creative! I am sure you are wondering why you should encourage your best employees to go out on their own.
There are four elements I have learned about human nature when it comes to business.
- Security: Few people are daring enough to give up a guaranteed salary to have to hunt, kill and cook on their own. Many people can't financially afford to go out on their own. This is why not everyone goes into business for themselves.
- Control: Everyone likes to know they have some control over their lives. Most people don't feel that way, especially if they work in large companies. They want to know they have some control over their future.
- Creativity: Really smart people are usually creative in some way and yearn to fulfill those creative urges. Some do this through writing, painting or hobbies, but there are many people who prefer business as their creative outlet.
- Money: How many people do you know who feel they are fairly compensated? How many talk about starting a side business for extra money?
Some companies try to provide a nurturing and intellectually engaging environment. They send their employees to seminars and workshops. People are offered new assignments or are just rotated to take advantage of their skill sets. Still, at the end of the day, most people feel bored and worn down by the same day-to-day routine. You can see it on their faces as they leave the office.
In the organizations I ran, I encouraged employees to come up with new ideas that they could take ownership of and have a financial stake in. Some of their ideas made for good businesses outside our organization but brought us value through new opportunities and revenue. I felt it was good for the business because it met the four elements I listed above.
Here are six initiatives you can take to encourage your employees to think entrepreneurially but still allow you to retain them.
: I used to purchase business magazine subscriptions to
I am also a big fan of
What I liked about those magazines was the varied stories about entrepreneurs trying to start or turn around a business. Magazine stories ignite the mind.
: I am not big on motivational speakers unless they are successful businesspeople with a substantive message. I find that pure motivational speakers are like getting a sugar high -- when the euphoria is over, you wonder why you wasted your time. If the speaker is someone like Steve Jobs of
or Meg Whitman of
, I believe it is time well spent.
: I am big on "how-to" books and biographies of successful people. I love biographies because they motivate those who want to be successful. "How-to" books are great when they are written by people who have actually experienced what they are writing about. Sometimes books are written by professional writers who lack the true understanding of what they are recommending.
: There are blogs written by venture capitalists, futurists and stock market analysts. I encourage employees to read these types of blogs to pick up ideas about where markets and people's interests are heading.
: This concept is similar to what musicians do when they get together to create music. I would order pizza, sit in the conference room and throw out some ideas. This would encourage others to share their ideas. If I heard an idea that made sense, I would encourage the creator to do some preliminary research and share with us what they learned.
Lunch and learn
: I liked bringing in clients and vendors to share what they were doing and where they saw their industry going. This would often generate new ideas.
My ultimate goal was to keep the best and brightest employees engaged, and try to meet their personal and intellectual needs. I had employees come up with ideas for new businesses and better ways to capture income that we had never considered. By doing that, my turnover went almost to zero and my profitability increased.
If someone really wanted to leave or we couldn't afford to back their idea, we would help find an outsider and take a percentage of the stock for ourselves. This also bought great loyalty because it created openness between management and the employees.
Kramer is the author of five business books on topics related to venture capital, management and consulting. He is a faculty member at the Wharton School of Business at the University of Pennsylvania and the veteran of more than 20 start-ups and four turnarounds.