The Entrepreneurial Approach to Management

Editor’s Note: In this first of a two-part series, you will learn why an Entrepreneurial Approach will help you manage and motivate your staff.  In Part 2, The Entrepreneurial Approach in Action, you will learn how to put this approach into practice.

Preface: The New Blue Shirt Case Study

Imagine you are the manager at ZingScoop, the new Zingerman’s ice cream business. After much discussion, we’ve decided to put in a new dress code. As of Monday, all staff are expected to wear new blue shirts. It’s Sunday afternoon; the day shift is getting ready to go home. Remembering that tomorrow is the big day, you decide to help out a long-time employee, Sue, by reminding her,

“Sue, don’t forget about the new dress code, okay?

“Oh, sure, she says, smiling. “No problem. See you tomorrow.

Next day, Sue shows up for work, not wearing the new uniform. You sigh, take a deep breath and head over to where she’s working. “Sue, you told me you would wear the new blue shirt. What happened?

“Oh, man, I am sorry. I just forgot all about it.

“Try to remember for tomorrow, okay?

“Oh yeah, I promise.

Next day, no blue shirt. “Sue, where’s the blue shirt?

“I asked my mom to wash that one. And she thought I said not to wash it because last week she washed the wrong stuff and all my best clothes got faded. I’ll try to get it done for tomorrow.

“Okay, it’s important, Sue. Don’t forget?

“Don’t worry. I won’t.

Soon, Laura, the general manager—and your boss—stops you in the hall.

“I notice Sue hasn’t been wearing the new blue shirts. This has been going on for over a week. You have to do something here. Or pretty soon, if she doesn’t get with the program, she’s just gonna have to go.

You think for a minute, then decide to put the real issue on the table.

“I hear you, Laura. But the problem is that I can’t afford to let her go. There are only so many shifts I can cover on my own. Other than this shirt thing, she’s a great employee. She cares; she’s here on time; she’s great with customers; she stays late to help. And we do have those big football weekends coming up.

“Well, alright, she sighs. “But you better get her in line soon.
Next day, guess what? Sue shows up again, but still no blue shirt. “Sue, this is going overboard. I need you to show up in that blue shirt or there will be serious consequences.

“I’m sorry. I’ll get right on it as soon as I get home today. You know I love working here. You can count on me.

“Alright. But I’m not messing around here.

Sunday arrives. Sue comes in the blue shirt. You exhale in relief. Finally! “Thanks Sue, I appreciate it. You smile. A small but significant victory.

Unfortunately, it’s short-lived. Next day, no blue shirt. Your stress level shoots way up. “Sue, where’s the shirt?

“Do we have to wear ’em every day? I thought it was a good idea on the weekends. During the week, the regular customers know who we are, so I figured we didn’t need to wear ’em.

“No, Sue. It’s every day. Can I count on you to wear it tomorrow? This is important. Laura will kill me if you don’t get this together. (When stressed, we pull out the “other parent card.)

“No problem, she says. “I’ll have it on.

I could take this scenario out another three paragraphs without exaggerating much. This is the way it works in most organizations when we put changes into place. Ultimately, Sue either:

a) gives in

b) the new dress code fizzles out

c) she gets fired

The last two are, obviously, not desired outcomes. And, although the first option is a bit better, it’s not great either. What we need to attain is commitment and conscious choice. Sue “giving in” may be better than “getting fired” but it’s still not optimal.

Negotiate Agreement on the New

In theory, effective leaders should negotiate agreement on the new before implementing it. But, unfortunately, that is not working in Sue’s case. And there’s another problem in the making—one which may have bigger negative implications. During these two weeks, Jamie, one of our best staff members, has been wearing the new blue shirts. From day one, she’s been on top of it. She even bought five shirts so she’d have enough to wear—clean—every day.

Every morning, there she is, ready to work in a new blue shirt. You smile. But there, next to her, is Sue, NOT wearing one. Day after day after day. After a few weeks, how does Jamie feel? Some combination of angry, frustrated, unappreciated and disenchanted. Why? We aren’t holding Sue to the new expectations, the exact expectations Jamie is diligently coming through on. Our integrity rating is taking a big beating in the eyes of a top staff member. And we’re trapped. We don’t think firing Sue is a good move, yet the new dress code is important.

What messages are we sending to Jamie? The implicit message is that you do not make a difference. You can ignore what we ask you to do if you don’t like it because we will let you do what you want anyway.
Jamie did what we asked; Sue did not. And yet, they still make the same money, work the same shifts. Jamie is stressing, and Sue is not coming through. Granted, Sue might eventually get fired. But that firing, if it comes, is still weeks or months away. What’s the upside for wearing the new shirts? Maybe some praise en route, but probably no more than once or twice in the first few weeks and then not at all. Assuming that Jamie is a good employee, she might get a small raise. But that’s about it. Basically, Jamie and Sue perform at different levels but they’re compensated identically.

Integrity Suffers

Our integrity is suffering. We are not firing the offender because it’s not “that big a deal and “we need people to work. And one of our best employees is increasingly less motivated to excel. What do we do? We need to make sure that we’ve been clear about our expectations. And throughout this situation, we need to focus on performance results, not on intentions. It’s nice that Sue is trying to wear the blue shirt, but the reality is, she isn’t. Which leaves us stuck with the choice of letting her get away with it, continued ineffective nagging, or ultimately firing her.

What would work more effectively? Be entrepreneurial! Imagine the staff as your customers, and that you are selling them on wearing the new blue shirts to work. Apply all the same techniques to selling them on the new dress code as you would selling customers on a new dessert. That, in a nutshell, is what the Entrepreneurial Approach to Management is all about.

Selling Beats Nagging

I’ve previously written about Servant Leadership; the belief that, as leaders, our number-one responsibility is to serve our organization, not the other way around. One key tenet of Servant Leadership is to treat staff as customers. The Entrepreneurial Approach follows directly from that supposition. If the staff are our customers, we need to apply the same creative approaches to sell and serve them as we would when dealing with paying customers. The Entrepreneurial Approach brings market forces and well-practiced merchandising and marketing techniques into our work as leaders.

The more traditional model of management is a “bureaucratic or “authoritarian approach. In this model, we bring about change by commanding it to happen from the top. Management in this style is done essentially by one of two methods:

a) sending out memos from headquarters, and/or

b) calling a meeting and giving directives.

Unfortunately, despite the best of intentions and the most well-written memos, the desired changes rarely happen. We then work to bring the sources of resistance—our critics, foot draggers and even opponents—onboard. When the pace of change lags, we may try to persuade; sometimes that works, often it doesn’t. Sometimes we simply turn a blind eye and hope the problems go away.

The Four Horsemen of Ineffective Management

Almost inevitably we fall into using The Four Horsemen of Ineffective Management: cajoling, begging, nagging, and, finally, threatening termination. These are the unspoken, but predominant, techniques used in bureaucratic management. This bureaucratic approach is rarely effective. It presents significant problems:

a) Ultimately, we need our staff more than they need us. So while it may seem “normal for bosses to give orders and send memos, the staff can probably go find 15 new jobs within a week.

b) The “no problem” problem. Most of us have been “trained” all-too-well as children in the art of nodding our heads and saying “sure, no problem,” but then going right on doing what we want to do anyway. This is how we learned to “manage” our parents and other authority figures while growing up.

c) We say we reward our best staff members the best but . . . Although nearly every organization says that it rewards top performers at the highest level, few do. There is little (if any) difference in reward and recognition between those that buy in and implement the new changes and programs and those who do not.

Most managers revert to those old parental tactics: cajoling, begging, nagging and finally, threatening. These tactics are about as ineffective now as they were for our parents.

Why the Entrepreneurial Approach? 

Here are reasons why you should use the entrepreneurial approach.

a) If staff are, essentially, our customers, we need to treat them as such, not just pay lip service to the concept.

b) It’s difficult to effectively make changes in any organization. Anything we can do to encourage positive change will reduce management, staff and organizational stress.

c) If we believe in the changes, values, visions, and programs, then we need to actively solicit support from people in the organization.

d) We should make it as rewarding as possible for people to support the changes and ideas we are “selling and, at the same time, to make it less than appealing to not get on board.

e) It’s more fun!

The Entrepreneurial Approach to Management puts a wide range of new tools into our management toolbox. Conceptually, it’s just putting the same free market principles into play in management that we comfortably use with customers.

Can selling to staff be the same as selling to customers?
Yes. Say we wanted to increase sales at off-peak hours, maybe on Tuesday evenings? What might we do?

• Create a special promotion to run on Tuesday evenings.

• Make shopping on Tuesdays more fun than at other times of the week.

• Create incentives for customers to buy more on Tuesdays, such as discounts, special Tuesday price packages, early bird specials, etc.

• Reward frequent Tuesday buyers with something extra like free desserts

• Make personal appeals to customers to come in on Tuesday

• Run staff contests for sales

• Do samplings or tastings

Note what’s missing from this list? No memos, and no meetings. Imagine a nice memo to customers.

Dear Zingerman’s Customer:
Greetings. We’ve noticed that our Tuesday evening sales are lagging. In order to get back on track, we’re asking that each of you—our valued customers—increase the frequency of your Tuesday evening purchases by ten percent per month. While this will only be a small inconvenience for you, it will help the company. And in the end, we’ll all be better off for it. We appreciate your support and look forward to seeing those increased sales.

Sincerely,

Your Zingerman’s Management Team

What do you think most customers would do with this politely written memo?

a) Laugh?

b) Wonder if we’d gone crazy?

c) Toss it in the trash?

d) All of the above?

This scenario is a little ludicrous. But sending memos to our staff about improving service performance would be almost as ineffective as sending this memo to customers to encourage them to buy more. A memo of this sort to the staff is likely to get the same results: laughter, amazement and a quick trip to the trashcan.

Be Consistent Over Time

None of this will work easily at first. You do have to stick with the Entrepreneurial Approach consistently over time while you and others get comfortable with it. In the short term, it may take more proactive work as leaders to make this a reality. It’s almost always easier to stay with the status quo, to repeat the same old problems we complain about. But aren’t you tired of those same old problems? Of carrying an inordinate share of stress? Of being mad at people who don’t do the things that they said they’re going to? The Entrepreneurial Approach to Management is one tool which can help you get out of the old and tired reality into a new, more invigorating, more entertaining, more rewarding reality of our own choosing.