To Get a Commitment, Make a Commitment 12-12

To Get a Commitment, Make a Commitment

by Jim Dougherty  |  11:00 AM December 12, 2012 

A few years back, I was running a software company   with about 150 employees. I'd been brought in from the outside, and it was my first time as a CEO. In the middle of a workday, a few months into my tenure, a popular employee collapsed and died while training for a charity bike race. He was middle aged and in seemingly good health. His death came as a huge shock to the entire company. Many employees were distraught.

We were three weeks out from a major service upgrade, and under a tight schedule. I thought I needed to do something to acknowledge everyone's loss, but I also was under pressure to deliver. I went to my boss, the chairman (who happened to be the son-in-law of the billionaire owner), and asked his opinion. He thought those close to the employee should be allowed to visit with his family, but we had a deadline. He wasn't going to tell me what to do, but I still had to meet our goals.

I went against his advice. It was a Wednesday, and I decided to close the company until Monday after the funeral. Team members could work if they wanted to, but we declared the days as holidays. This was greeted with great relief. It eliminated the tension between being a good colleague and person and doing one's job.

Before long, in fact, it was clear that the positive impact of putting aside work to honor a team member was worth far more than the days lost. The lost days actually didn't cost anything — the team doubled down and we beat our schedule for the upgrade. More important, the message it sent was that I valued individuals more than any work accomplishment. And because team members now understood that they were valued and special, they vastly increased their emotional commitment to making me, and the company, successful. It was a turning point in the company's fortunes. Six months later, the chairman told me that he'd been wrong and the shutdown had been the right thing to do.

Not that I'd meant it that way, of course. It had just been a snap decision, albeit within a value system of trying to be decent and do right. But I learned the lesson that the highest motivation for team members is to get that kind of emotional connection to the team leader.

So, in my next job, I looked for ways to do the right thing and gain that emotional commitment. I was CEO of a VC-backed early-stage company that had risen with the dot.com bubble and was being decimated by the blow up. The company was down for the count. Over the previous year it had lost over $14 million on just over $3 million in revenue. It took major and painful changes — including big layoffs — to turn it around. But we had far to go, and I needed to find ways to motivate the remaining team of 100 employees.

After the turnaround was underway, we raised $50 million in VC money. The investors allocated 15% of the recapitalized company's stock to employees — 7.5% to me, 7.5% to everybody else. I'm all for CEOs owning a big stake in their company, but this seemed profoundly unfair. It also seemed like an opportunity to do well by doing good — and get the emotional commitment from employees we needed to keep forging ahead in a very difficult economic environment.

We allocated the options as directed by the board. When that was completed, I went back to the board and asked permission to pass on almost half of my new options bonanza (3.5% of the company) to the other employees. The board members were all VCs, who tend to be somewhat coin-operated. They didn't understand how anyone with a brain could give up money voluntarily. But after they got over the initial shock, they saw no reason to stop me. With just HR knowing, we sent letters to employees' homes with a nearly 50% increase in options. At-home spouses starting getting these letters, and calling their husbands and wives at work to ask what was going on. We anticipated this, and had called a company meeting for late that afternoon. With the team gathered, I explained what I had done. At first, there was stunned silence. Had they heard correctly? To say the team was shocked and thrilled would be an understatement.

They also became committed. As one example, the normal time for shutting down the service for software updates had been Thursday afternoon. Not optimal, but acceptable. The very next week, the updates were changed to Sunday afternoon, a much better time in that it impacted many fewer customers. I didn't have to ask. The team knew it was best for the company, even if it meant a few people had to work on Sunday. From then on, motivation wasn't a problem. We were the only independent vendor in our space that survived. The company is still viable today  , 12 years later.

What's the lesson here? If you want to get an emotional commitment from the people who work for you — or with you, or with whom you have business relationships — you need to be willing to commit to them too, unsolicited and without direct hope of reward.

You can think strategically about how to do this, so you're ready when opportunity presents itself to take the kinds of actions that produce such a result. But you can't force it, or fake it. If do something purely for the hoped-for economic gain, it will show and you will likely fail. Part of the secret to getting this balance right is liking the people you work with — and working with people you like. Then you never have to fake it.by Jim Dougherty  |  11:00 AM December 12, 2012

A few years back, I was running a software company   with about 150 employees. I'd been brought in from the outside, and it was my first time as a CEO. In the middle of a workday, a few months into my tenure, a popular employee collapsed and died while training for a charity bike race. He was middle aged and in seemingly good health. His death came as a huge shock to the entire company. Many employees were distraught.

We were three weeks out from a major service upgrade, and under a tight schedule. I thought I needed to do something to acknowledge everyone's loss, but I also was under pressure to deliver. I went to my boss, the chairman (who happened to be the son-in-law of the billionaire owner), and asked his opinion. He thought those close to the employee should be allowed to visit with his family, but we had a deadline. He wasn't going to tell me what to do, but I still had to meet our goals.

I went against his advice. It was a Wednesday, and I decided to close the company until Monday after the funeral. Team members could work if they wanted to, but we declared the days as holidays. This was greeted with great relief. It eliminated the tension between being a good colleague and person and doing one's job.

Before long, in fact, it was clear that the positive impact of putting aside work to honor a team member was worth far more than the days lost. The lost days actually didn't cost anything — the team doubled down and we beat our schedule for the upgrade. More important, the message it sent was that I valued individuals more than any work accomplishment. And because team members now understood that they were valued and special, they vastly increased their emotional commitment to making me, and the company, successful. It was a turning point in the company's fortunes. Six months later, the chairman told me that he'd been wrong and the shutdown had been the right thing to do.

Not that I'd meant it that way, of course. It had just been a snap decision, albeit within a value system of trying to be decent and do right. But I learned the lesson that the highest motivation for team members is to get that kind of emotional connection to the team leader.

So, in my next job, I looked for ways to do the right thing and gain that emotional commitment. I was CEO of a VC-backed early-stage company that had risen with the dot.com bubble and was being decimated by the blow up. The company was down for the count. Over the previous year it had lost over $14 million on just over $3 million in revenue. It took major and painful changes — including big layoffs — to turn it around. But we had far to go, and I needed to find ways to motivate the remaining team of 100 employees.

After the turnaround was underway, we raised $50 million in VC money. The investors allocated 15% of the recapitalized company's stock to employees — 7.5% to me, 7.5% to everybody else. I'm all for CEOs owning a big stake in their company, but this seemed profoundly unfair. It also seemed like an opportunity to do well by doing good — and get the emotional commitment from employees we needed to keep forging ahead in a very difficult economic environment.

We allocated the options as directed by the board. When that was completed, I went back to the board and asked permission to pass on almost half of my new options bonanza (3.5% of the company) to the other employees. The board members were all VCs, who tend to be somewhat coin-operated. They didn't understand how anyone with a brain could give up money voluntarily. But after they got over the initial shock, they saw no reason to stop me. With just HR knowing, we sent letters to employees' homes with a nearly 50% increase in options. At-home spouses starting getting these letters, and calling their husbands and wives at work to ask what was going on. We anticipated this, and had called a company meeting for late that afternoon. With the team gathered, I explained what I had done. At first, there was stunned silence. Had they heard correctly? To say the team was shocked and thrilled would be an understatement.

They also became committed. As one example, the normal time for shutting down the service for software updates had been Thursday afternoon. Not optimal, but acceptable. The very next week, the updates were changed to Sunday afternoon, a much better time in that it impacted many fewer customers. I didn't have to ask. The team knew it was best for the company, even if it meant a few people had to work on Sunday. From then on, motivation wasn't a problem. We were the only independent vendor in our space that survived. The company is still viable today  , 12 years later.

What's the lesson here? If you want to get an emotional commitment from the people who work for you — or with you, or with whom you have business relationships — you need to be willing to commit to them too, unsolicited and without direct hope of reward.

You can think strategically about how to do this, so you're ready when opportunity presents itself to take the kinds of actions that produce such a result. But you can't force it, or fake it. If do something purely for the hoped-for economic gain, it will show and you will likely fail. Part of the secret to getting this balance right is liking the people you work with — and working with people you like. Then you never have to fake it.

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