Empowering Employees

/ Source: Entrepreneur.com

Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. What follows is the latest edited round of insightful responses. Ask him a question and your query might be the inspiration for a future column.

Q: As much as I think of you as a role model, I find some of your recommendations rather unrealistic, especially for businesses just starting up. For example, I would like to keep my employees happy and having fun, but find it a great challenge due to limited resources. I am not able to pay my employees well, nor provide a good working environment. My priority right now is to make more money and turn this business into a reality. On the other hand, my employees want good salaries and to work in a slick environment. We have conflicting priorities, therefore I am forced to micromanage my staff to get results. Please advise what I should do to make my employees happy. -- Emily Bosco, Kenya

A: This is a challenging dilemma for entrepreneurs: During a business's precarious launch stage, can one afford to be generous, foster a fun and caring atmosphere, and give employees freedom?

It is not only realistic, but vital to your business's long-term success.

During our early days at Student magazine, I did not have much money to pay my staff or improve our premises. We worked in a basement flat, with a few beanbag chairs, some desks and phones. But the thrill and promise of possible success united us and we all worked long hours in those cramped conditions. No one complained -- everyone was intent on making the magazine work.

The same was true of our first Virgin companies -- a mail-order business selling records, and later, a few record stores. Again, we tried to keep the vibe relaxed, maintaining small, friendly offices. This decision paid off, attracting great team members who were drawn by the flexible working conditions and lively industry.

We always strove to create an atmosphere of team spirit and mutual appreciation. At Student, we had a party or at least a few drinks whenever a staffer brought in an important advertising account, and we celebrated the publication of every edition. We tried to make sure everyone had a great time at work, which generated great loyalty.

My philosophy has not changed: Do something you enjoy and your enthusiasm will rub off on others, ensuring a committed and spirited team. For more than 40 years, I have felt that one of my most important jobs is to attract and motivate great people who genuinely feel their job is more important than just money.

Emily talks about having to micromanage her team. I find this counterproductive: Employees will not take responsibility for their actions if the boss is looking over their shoulders all the time. They will not take the initiative to work that extra hour, make that extra call or squeeze that little bit more out of a negotiation.

The credit for Virgin's enduring and varied success is often attributed to me, but it's actually due to the people who piloted those businesses. My decision to give them autonomy and encourage them to take risks has allowed us to grow while keeping costs down.

Giving my employees room to work has often meant my moving out of the business's headquarters. In the early days I used a houseboat as my office, and later my home in Holland Park, to give my managers the space and authority to make their own decisions.

When things do go wrong, you must teach yourself to listen to your employees and encourage them to find solutions. If you are worried by the business's finances, share this with your team and then listen to their suggestions. Your employees should never feel like hired hands, but your fellow entrepreneurs.

Finally, it sounds as though some employees are not working out at Emily's business. If you are in this situation, take a long, hard look at yourself and how you treat your employees. Then look at your senior team (rot starts at the top), and whether direction is being effectively delivered. Letting people go should be your very last lever.

Managers should never rule by fear. I find enthusiasm, genuine openness and camaraderie with your people are far better. Successful entrepreneurs usually have excellent people skills that exponentially increase their ability to make things happen. So remember: encourage, enthuse, and try to make work fun.