We have been asked to write a companion to our book, The Barefoot Spirit, which distills out the essentials necessary to create a positive, productive, and growth-oriented culture in corporations. Our new book, The Entrepreneurial Culture, 23 Ways to Engage and Empower Your People will soon be released. This book specifically targets the corporations and provides them with tools that successful entrepreneurs use to engage and empower their people.

Many of these tools can be applied directly to the existing corporate structure. But all culture and all change starts from the top, and the top execs have to be willing to change in order for these tools to work their magic. Many C-Suiters are fearful of change. They feel that it might cause a “revolution,” result in legal challenges, or run-away costs. So they stifle methods that can empower and engage employees that, in their minds, step on the three sacred corporate cows:

1 Corporate Structure: The basic structure of most corporations resembles a pyramid and is ipso facto top-down by its basic architecture and function. Within the pyramid are silos which are mini-pyramids. Each mini-pyramid’s turf is fiercely defended from perceived infringements by the other mini-pyramids. This top-down, turf-war-prone structure can prevent the upward mobility of good ideas and interdepartmental cooperation necessary for real breakthroughs. How can employees be empowered and engaged if they think their boss will sit on their idea, change it, or claim it as his or her own? How can employees come up with comprehensive solutions that involve changes to other departments if they are perceived as “off-limits?”

2 Compensation:  Most corporations today pay a salary which is basically paying for attendance, not necessarily production. Raises tend to be based on tenure, not great ideas, sales, or profits. This results in employees being viewed as “labor,” and as a cost center to be reduced, not as an asset to be appreciated. If two or more employees are responsible for doing the same job, they get equal pay regardless of the imbalance in their production. This discourages employees from working harder or being more engaged. Why bother? It’s not going to make a difference in their paycheck, or even in the appreciation and recognition they receive. Real producers tend to leave for better pay commensurate with their production. How can employees be truly engaged if their compensation plan discourages them?

3 Compliance: Corporate legal departments, in their well-meaning effort to mitigate liability, want “everything” to go through compliance. They look for reasons why things should not be done rather than ways in which things can be done. Of course this takes a long time, because when everything must go through compliance, that creates a backlog. Corporate employees know this and are discouraged from requesting approval for an idea or project. Legal doesn’t want to offer “safe” parameters inside of which ideas can flow without formal review since legal also gets paid by the hour. Some legal departments even recommend against any public written acknowledgement for a job well done in the fear that it may be used against the employer in a wrongful termination dispute. Yet public acknowledgement engages employees by validating their productive behavior, increasing respect from their colleagues, and demonstrating to others what garners appreciation.

Tune in next time to see how we recommend corporations achieve an entrepreneurial culture by removing the fear and introducing a few new cows!

Who We Are

Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.

Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.

They offer their Guiding Principles for Success (GPS) to help entrepreneurs become successful. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.

Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular brand building site at www.consumerbrandbuilders.com.

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

The post Corporate Structure, Compliance, and Compensation Plans Can Stifle Employee Engagement appeared first on The Barefoot Spirit.

It’s no laughing matter when your staff finds out that they are out of a job because your company lost a major buyer or couldn’t solve a critical problem. But if they don’t understand the challenges, they can’t help with the solutions. If their good ideas are suppressed or the free flow of information is stopped because of politics or turf wars, the challenges your company faces can be become even greater.

Your people are your greatest assets. They all come with a brain, imagination, and a desire to better themselves. They will use those resources to the benefit of your company if you let them.

Here are some effective practices we found that engaged our people to help us solve our challenges and keep the information free flowing:

1. Need-to-Grow Trumps Need-to-Know. We told our entire staff our major challenges and asked for their suggestions. Their outsider’s view in many cases provided fresh, out-of-the-box solutions. What if they didn’t know? We would have lost those insights.

2. De-Specialization. Every year we asked each employee what they would like to do within our company. We put our various job requirements on the table and they were all picked up, but not necessarily by the same folks who had them the previous year. We found that people whose job fit their skills and desires out-performed strict job specializations.

3. Performance-Based Compensation trumps position, tenure, or attendance-based compensation. Once all our people were getting bonuses on sales it became clear to them that the money came from the customer, and not the “company.” Sharing information and ideas was good for everybody’s paycheck.

4. Out-sourcing. Rather than trying to do everything in house, we would out-source for as much as possible. We paid only for the products and services that were to our specifications. Our people managed outsourced companies, which had the net effect of keeping us smaller and less restrictive. It reduced the typical company pyramids and enabled people to communicate directly with the decision-makers in our company, allowing more good ideas to reach top management.

5. Public Acknowledgement. We would “catch” someone doing something beneficial to the entire staff and, much to the chagrin of the lawyers, publicly acknowledge them in writing. We encouraged everyone to come forward with new ideas and for that they would gain appreciation. This practice also built a strong company culture since everyone understood and appreciated how other folks in the organization were improving their job security and increasing their paychecks!

Of course, all these ideas may not work in every situation, but it’s the spirit behind them that can help any business. Respecting the intellect of your human resources, giving them a financial reason to work as a team, and sharing your challenges can avoid hardening of the information arteries and prevent them from saying “I did not know that.”

Who We Are

Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.

Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.

They offer their Guiding Principles for Success (GPS) to help entrepreneurs become successful. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.

Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular brand building site at www.consumerbrandbuilders.com.

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

The post Corporate Structure Can Turn Information into Currency – Part 2 appeared first on The Barefoot Spirit.

Although these structures seem unavoidable just to get the job done, they can have a sinister creative-stifling side effect. The heads of each mini- and maxi-pyramid can actually stop good ideas simply because they did not think of them, and they find that threatening to their position. Job preservation can become job number one, even at the expense of the company itself. When this happens, the flow of information and ideas become constricted.

Add to all that the well-meaning policy of  “need to know.” Now you have inadvertently put a price on information. It can become a commodity used as a type of corporate currency where one person will only tell what he knows in return for administrative favors or other scraps of information. When you add in the possibility of incorrect information, rumors and gossip, corporate culture and morale can suffer. This results in a decline in productivity and profitability.

Since the top of the pyramid is narrower, there’s simply not enough room there for all the ambitious and aspiring folks further down the pyramid. So there’s a natural competition for those top jobs. Many see using and controlling information as critical to their advancement.

We recently attended a fund-raising dinner and sat next to a top executive from a major corporation. We were talking about why so many of the new good ideas seem to be coming from the entrepreneurs and not the big companies. When we pointed out the free flow of information and ideas enjoyed by entrepreneurs and the restriction of information flow in some corporate structures, due to their size, he responded, “We don’t have those problems in my division.”

When companies are in their start-up phase, information and ideas flow freely. They listen to all ideas, from anyone who will offer them, because they are struggling just to stay in business. Being small and undercapitalized encourages this to happen naturally. Everybody in a start-up knows that their job is dependent on the survival of the company. They readily share information with other divisions because they are not cast in stone – yet.

As a company grows, it’s hard to say where this potential “hardening of the arteries” begins to set in, but we think it is more likely to happen as more employees are hired. However, without governing factors, it can happen in a company of any size.

Next time, we will share some ideas we employed to encourage the free flow of ideas and communication, and ways to prevent information from becoming a currency.

Who We Are

Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.

Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.

They offer their Guiding Principles for Success (GPS) to help entrepreneurs become successful. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.

Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular brand building site at www.consumerbrandbuilders.com.

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

The post Corporate Structure Can Turn Information into Currency – Part 1 appeared first on The Barefoot Spirit.