A special Build supplement in the December 2013 issue of Inc. magazine.
When Web strategist Cara Olson returned to digital marketing company DEG following a four-month maternity leave, she had big news: She planned to resign and start her own company. CEO Neal Sharma heard Olson out and made a counterproposal: Why not launch it within DEG? The division, he told Olson, would be hers to lead and direct.
Eight years later, Olson — now director of direct marketing and e-customer relationship marketing for DEG — heads a unit that employs more than 30 people and generates one of the company’s largest revenue streams.
This was no one-off decision for Sharma. He has tapped many DEG employees to oversee projects that let them pursue their passions while meeting the company’s business needs. In fact, about half of the employees who have been with DEG for more than a year hold different positions from those they were hired for. The result: a 92 percent retention rate. Sharma offers three strategies for fostering the kind of “intrapreneurship” that can help you retain top talent:
1. Think like a VC.
Even though Sharma is predisposed to letting employees embark on new projects, he assesses the risks and potential returns in much the same way that a venture capitalist would. The chance to retain a key employee should be regarded as “an opportunity to invest,” he explains.
2. Crowdsource the company’s values.
Rather than craft a mission statement, company leaders posed this question to everyone: “What does this company stand for?” The answers inspired new mission and value statements, which helped map the job paths that employees can travel.
3. Insist on solutions.
Employees are free to criticize and complain, as long as they also pitch solutions. When they are required to find answers to the problems they see, they are already thinking about their next project within the company, whether they realize it or not.
Alas, employee retention is a major challenge for many growth companies. Shai Bernstein, an assistant professor of finance at Stanford University, published research in late 2012 that shows that innovators tend to leave their jobs at an increased rate after companies go public. One way to combat this is to separate the roles of CEO and board chair. “When CEOs are more protected from market pressures, they are more likely to take on more innovative or risky projects” that satisfy the needs of inventive employees, Bernstein tells Build.