Loyalty is not a word that is used a lot in the business world anymore. Customers used to be loyal to products and channels, but the Internet changed all that. Employees used to be loyal to their employers, but layoff after layoff, often with little regard for the human implications, changed all that. Companies used to be loyal to their suppliers, before the world of global sourcing and cheaper prices.
I am a perhaps just a little old fashion. Loyalty still matters a lot to me. It is a key ingredient of successful start ups, many of which would fail without it.
So why is loyalty so critical in the start up world when it has been so denigrated in the rest of the business world?
Simple. It makes a huge difference in performance. Savvy founders realize that money, equity and bonuses can only go so far. Loyalty is what gets the products out the door on time. Of course, it does not hurt that there is a pot of gold at the end on the start up exit rainbow, but the huge uncertainty associated with the payout implies that other factors, such as loyalty to a cause, are at work driving high performance in the early years.
How can a founder gain and enhance loyalty in their team?
- Straight Talk--good communications around exactly what is going on in the company are critical to maintaining loyalty. The worst way to have information become available is via the grapevine. Communicating in company wide meetings is best so everyone hears the same message at the same time.
- Lavish Praise--praise is the best, and cheapest, motivator a founder has to dole out to the team on a daily basis. The best founders put their teams ahead of their own ego, letting them interact with investors, customers, analysts, etc. to make sure they feel appreciated.
- One on One's--the best founders spend a lot of one on one time with their people at lunch or dinner, learning about them as individuals as well as part of the team. Loyal people follow successful serial entrepreneurs from company to company because they are treated well and appreciated.
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