The Mistake of Raising Employees

Every small organisation initially depends on its founders. In their journey of scale and growth, founders need dependable people who can effectively execute their ideas. Hence, the emphasis on a founder leading with his or her thought, rather than diving into execution.

Soon, more growth brings in more employees. The organisation then builds systems to manage those employees. Annual appraisals, feedback systems, KRAs and KPIs, HR systems, recruitment mechanisms, exit policies, compensation plans, etc., become the points of focus. You will recall that Mistake #8 was about culture and performance. Your act of setting up culture, along with performance, helps you align your organisation for long term and sustainable scale.

However, there is a fundamental mistake that needs to be avoided. In your journey of scale, you end up raising "employees". The mindset that your people are your "employees" is the basic assumption. This hypothesis does not allow you to treat them as collaborators. Consequently, an air of mistrust and angst remains between the organisation and its employees. A classic outcome is that founders feel that employees do not display a sense of ownership, while employees feel annoyed at being constantly managed and driven at sub-optimal levels of their capabilities and potential.

Every fancy "Leadership Development Initiative" also carries this same hypothesis and fails primarily due to this dichotomy. On the one hand, the participants are asked to assume greater responsibility, but on the other hand, they are constantly reminded of being employees.

Scale needs collaboration. For collaboration, you need entrepreneurs. There is a fundamental distinction between leaders and entrepreneurs, and it is this mindset that needs to be inculcated and nurtured.

When people in the organisation are assured of getting wings for their ideas and initiatives, and when they know that they will eventually create something for themselves and others, they start to take initiatives instead of having to take it. This is when they transform from "employees" to "entrepreneurs".

Employee vs. Entrepreneur is a game of mindset alone. An employee is the one who is unable to deal with his or her fear of uncertainty, while an entrepreneur thrives in such situations.

When, instead of managing and controlling people, an organisation focuses on helping them realise their potential, it is setting itself up to become an enterprise.

Most people are eager to realise their potential. Only a few are content with their existing life state. As an organisation, you need to offer the willing ones an opportunity to realise themselves while allowing the unwilling ones to remain content with their sense of security until they become willing to actively embrace discontent.

You might say, "…but Sameer, we are a company that employs 25,000 people, how can we treat everyone as a collaborator? Won't there be chaos and unruliness? EVERYONE trying to function as an entrepreneur is a crazy idea! Maybe it applies to smaller organisations but not ours!".

I have heard this excuse over a hundred times. My response is simple. Whenever you are looking to partner/ merge/ acquire a company, you do the due diligence to choose one out of the millions of enterprises out there. Similarly, on the path of developing an entrepreneurial mindset, you need to choose those individuals who can collaborate with you for your cause.

There is always a large segment of people who remain sceptical and unwilling to accept your offer of entrepreneurship development. At the same time, there are those set of people who are eager to realise their full potential and are willing to work towards it. Look out for these hi-pots (The High Potentials) ready to take the organisation into the future. But do not approach this with a hypothesis of them being an employee.

The entire concept of "ESOPs" shouts and tags your top people as "employees" only. When you treat them like this, they will, of course, reciprocate in the same measure. But when you treat them as entrepreneurs and seek to collaborate with them, your purpose of sustainable scaling up is automatically met.

When you do this, you will soon realise that it is far easier to work with self-employed people than with people who treat themselves as employees. So go ahead, launch an Entrepreneurial Development Program instead of a Leadership Development Program that you know does not deliver what you truly desire!