Entrepreneurs creating a startup will eventually need to bring on key players to help. This covers the Board, Advisors, and Staff. Sometime, the entrepreneur works for months alone trying to get the business formed and running. During this time he/she has determined what needs to be done and may have been multitasking to accomplish everything. It is great for the entrepreneur because when making presentations they tend to be better informed because they have developed extensive knowledge about all aspects of the business. The listeners will get a great feeling once they see the presenter appear to be on top of the business.
Sooner or later there will be others participating and this is extremely important. Most businesses need specific people to manage the different segments. The business also needs people performing the routine and more sophisticated work. After all, NO single person can know everything and NO single person knows the best way to accomplish all the tasks in the company. More importantly, the entrepreneur / CEO has a few really important responsibilities: RAISING MONEY, KEEPING INVESTORS INFORMED, SETTING STRATEGY, AND MONITORING MILESTONE ACCOMPLISHMENT.
Recruiting a team is very important and the team that is in the company is expected to work hard. The CEO sets goals but the team delivers them. Without a great team, the company will likely be less impressive or be non-existent. Products will not be invented or made, sales goals not met, marketing a disaster, and accounting will be a mess. Sure, you can create a virtual company with no internal staff, but that is a team of sorts.
It is easy for the senior management to think they are the most important; this is why their compensation and stock grants are greater. But remembering to take care of your team is equally important. They deserve to get rich if the entrepreneur / CEO does. The team most likely did everything humanly possible to make the company successful. So remember to recognize them along the way.
A few ideas that provide meaningful recognition:
· Regular Option Grants – These typically require board approval, but the management recommends the number. Grants are made at the current price /valuation and carry a significant time to exercise. They usually have a vesting period to encourage the employee to stick around. It does have a cost and this is reflected in the accounting. The number of options can also reflect the degree or lack of contribution.
· Bonus – Cash bonus is something all employees recognize as great to have. The bonus can reflect the contribution of the employee. When the company has less cash, bonus may be small or none. When the company has more cash bonuses can be larger. A bonus pool should be in the budget at the start of the year. Management does not have to issue them, but they are approved by the board early and distributed later.
· Pay Increases – Everyone likes this, but be careful as these will have the long term effect of increasing the budget. Give the increases, but one time bonuses can help and these are not annual.
· Awards – Ok, awards have no monetary value, but calling a staff member in front of the whole group and making a big deal about what they did will let everyone know you liked it. The employee may even smile for the next few days!
· Promotions – Great employees that can lead others will need to see upward mobility if you want to keep them.
· Send them on a trip – It may be for business or it can be a vacation or both. Sending an employee to a meeting in a great location and telling them the company will pay to take the family can be a different way to reward the employee and get work at the same time.
This is not a complete list but just a few common ways that companies help motivate employees and encourage them. Your goal is to have them feel they are cherished and their work is important. You are likely going to be so busy that you will forget this important task, so set the strategy for recognition and make sure you find new ways to say “THANK YOU.”
Taffy Williams is the author of: Think Agile: How Smart Entrepreneurs Adapt in Order to Succeed to via Amazon