Turning Your Employees Into Owners
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Giving as Good as You Get

A successful CEO needs a mentor, for all sorts of reasons, but just as important as having a mentor is being one. Helping and teaching others is a big part of your role as a leader—especially if you want to be in a position to sell your company to your employees someday.

Mentoring Other CEOs

You do not have to know everything knowable about business in order to mentor others. If you are a CEO, then you have already have a foundation of success and you can share that success with others. In any case, one of the best ways to learn something is to teach it because that way you uncover how much you already know. Making yourself available to other business leaders is just an extension of basic professional networking. And while organizations such as Vistage that offer peer support to CEOs are one way to get help for yourself, participants offer assistance as well as receiving it.

Mentoring as a Component of Leadership

A lot of CEOs are very good at attending to the daily minutia of running a company, but they forget to step back and keep track of the big picture. And that is not helpful.

As a CEO, you can think of yourself as the captain of your ship—but the captains of real sailing ships do not raise and lower the sails themselves. If they did, their focus would narrow to just the rope in their hands and they would lose their awareness of the ship and its crew as a whole. The reality is, your job as CEO is not to play wack-a-mole with every crisis that comes up, but to train and support your employees to take care of those crises for you. In order words, the more you can function as your employees’ mentor, the better your business will go.

Learning to Be a Mentor

But if you do not keep up with changes in culture and technology, how are you going to stay relevant to the people you are trying to help? My mother bought herself a smartphone so she could learn to use Facebook and Twitter—not that she’s interested in Facebook and Twitter, but she wanted to be able to understand her grandkids. In order to be able to offer useful guidance to others, you need to keep learning yourself and a mentor of your own can help you do that.

So we’ve come full circle; one of the most important thing you can learn from having a mentor is how to be a good one yourself.

 

We talk a lot of about how important it is to be able to get out of our comfort zones. Getting out of the comfort zone is how we grow, it’s how we learn, it’s how we discover new things, both personally and professionally. If we’re only ever willing to do what’s comfortable, we can coast along, just paying attention to the daily minutia of our businesses, and then wake up five years later to discover we’re no longer relevant in our industry.

But what’s outside of the comfort zone? If you go too far outside of the comfort zone you get into what my friend Vince Langley calls the sheer terror zone.

The sheer terror zone is where whatever’s going on is too much and we just stop. It might not even be a conscious decision—when you find yourself just forgetting to take certain steps, or maybe there’s never any time to try something new because you’re too busy dealing with day-to-day issues, what I call playing Wack-a-Mole, to take a step back and look at the big picture—that might be the terror zone at work.

Different things do it for different people. Some people are afraid of heights. Other people are afraid of looking like fools. Whatever it is, you get too close to that terror and you jump back automatically. It’s like touching a hot stove. It’s important to stay away from the sheer terror zone, because we don’t have time to stop. We can’t afford to not take risks.

So, what can we do? How do we learn to tolerate discomfort so that we can push ourselves and grow?

The question applies not just to us as CEOs, but also to our colleagues and employees. It’s our job to build their capacity to handle discomfort as well, so they can grow and our companies can thrive. Just ordering people to do things they can’t stand to do won’t work, just like willing ourselves to quit being terrified won’t work.

Instead, we have to look at potential costs vs. benefits. If someone is stuck because a task is so far outside of their comfort zone that they’re just panicking, we can get them moving by either reducing the perceived cost or by increasing the potential benefit. If I ask you to climb up the cables of the George Washington Bridge and you’re afraid of heights, you’ll probably say no. If I say there’s ten thousand dollars waiting for you up at the top, maybe you’ll try it. If your kid is stuck up there, you’ll climb up to save your kid. Or, maybe we can reduce the perceived risk by giving you a safety harness and maybe a mask so you can’t see how high up you are.

As CEOs, we have to find ways to do both, increase perceived benefit and decrease perceived risk—and we have to do it in ways that are meaningful to the person facing the challenge, because different people have different fears and look for different rewards.

Maybe that means being more transparent about why the company needs to take certain steps or adjusting compensation packages so people have a greater stake in the outcome. Maybe it means breaking up a project into manageable tasks and letting multiple people work together as a team. A big part of it is helping the people we work with find ways of accomplishing necessary goals in ways that work for them. For example, let’s say you have a colleague who is painfully, just intolerably shy, and you need this person to make a couple of cold calls for you. It’s not going to happen—that phone might as well weigh three thousand pounds. But if you let him or her make the contacts via email, that could work.

The take-away here is that sometimes in order to get ourselves—or our employees and colleagues—out of our comfort zones we need to make challenges seem a little less scary and a little more worthwhile. Given the choice between comfort and sheer terror, we all choose comfort every time. But if we can make a little space between those two extremes, then we can go ahead and take the risk. And every time we take risks, we get a little better at it.

We become more able to face the sheer terror zone.

So, you’ve put time and energy—maybe years of your life—into growing your business and making it a success. Congratulations. But if you think retiring or moving on to your next project is as simple as hanging out a “For Sale” sign, you might want to think again. Many of these sales simply do not go through. Since 74% of those failed deals involve businesses worth less than half a million dollars, if yours is a small business you face especially long odds.

You can improve your chances of success by treating the ownership transition as a process, a process that begins with careful planning, sometimes years before you actually plan to move on.

One of the reasons that selling is particularly difficult for smaller companies is that the buyer is typically another individual looking for an employment opportunity, not a private equity firm trying to make an investment. And as the Baby Boom moves into retirement age, there aren’t very many younger entrepreneurs coming up to take their places. Generation X just isn’t as big. You’re facing a classic buyer’s market, and that weakens your negotiating power and reduces your options.

One way to shift the advantage your way is to grow your own successor by training your employees to take over the business.

As a small business owner, you probably have little experience, if any, with ownership transitions. That is the other reason why the owners of smaller companies often can’t close the deal. But you do know how to grow your business and how to work with your people. You can draw on the experience you already have by treating the transition as just another phase of developing your business and training your team. Focus on preparing your company to change hands and preparing your people to take over. This is a great opportunity to reflect on exactly what it is you do that works so well, where you want to make sure your successors stick to your vision and where you need to let go and allow their innovations to take your company in a new direction.

Training new, prospective leaders does not necessarily obligate you to sell to insiders (unless you start making promises). If an outside buyer comes along with a more appealing offer, you can take it. The point is that you will have more options and you will be able to oversee the leadership transition from a position of power, not a place of desperation.

Turning employees into owners is one of those situations where everyone wins. You win, because you know you’ll have at least one qualified, interested buyer and so you can negotiate from a stronger position. Your employees win, because one or more of them gets to own a successful business. Your business wins because a smooth transfer to a fully trained team increases the chance that your winning strategy will keep on winning. And since most people do better work when they have a sense of ownership of a project, training to your employees to take over not only protects the future of your business but also enriches its present.