entrepreneurial culture | The Barefoot Spirit

The 7 Hallmarks of Leadership

Michael Houlihan & Bonnie Harvey — Fri, 24 May 2019 16:38:02 +0000

What does it take to be a leader? It’s such a broad term and encompasses so many skills, it’s hard to answer with just the one thing that’s required.

Then there are the differing meanings of leadership. Are we talking thought leader, political leader, or the leader of the band?

For us who teach entrepreneurship and entrepreneurial culture, leadership is taking an enterprise from concept to cash. In other words, it’s creating a business and becoming an acquisition target, and setting a good example for your team to help you get there.

Here’s our short list on what it takes for that kind of leadership:

1. Sensitivity – The ability to see beyond the present. The ability to recognize opportunities. And the ability to imagine solutions to problems and look for answers.

Leaders recognize the limitations of their own skill set and allow others to take the lead to solve the technical and marketing problems. They have the humility to be open to the input of others who have more experience in the space they will be venturing into.

To read the complete article, please visit The Business Journals

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.

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Organizations That Say They Want an Entrepreneurial Culture Need to Walk the Talk

Michael Houlihan & Bonnie Harvey — Thu, 11 Aug 2016 17:00:16 +0000

Every day we hear companies, organizations, and institutions say they “want to hire people with entrepreneurial DNA.” They all say they “want an entrepreneurial culture where their employees are engaged and empowered.” But do they really? You can hire the best. You can vet for self-starting, creative, resourceful people with a sense of urgency, who take responsibility for their own actions. And you can even hire entrepreneurship grads. But without the proper environment in your own company you will stifle the new hires, and lose others who are frustrated.

We saw a cartoon recently that best summed up the paradox. The tired, haggard, office employee was down at the bar after work, sipping on his martini. He turns to the woman next to him and says, “Sure, they want me to be creative, imaginative, and resourceful, but I have a career to think about!”

Long before Barefoot Wines, Michael worked for the Federal Government. Right out of college, he was keen on being productive, making a mark, and moving ahead. But he ran into office politics, turf battles, and empire building within the organization. Few folks seemed to care about more than their job security. Most had become isolated and insulated from the real job at hand. Upon realizing that this could become his future too, Michael decided to not just quit his job, but quit the idea of having a job in any siloed organization.

The good news is that if it wasn’t for that experience, there would be no Barefoot Wine today!

The biggest problem with any kind of vertical or pyramid structure is that the structure itself is contrary to the entrepreneurial culture. Why? Because as the organization grows, sales and personal responsibility for the customer experience become more removed from the process. Soon, under the guise of efficiencies of scale and divisions of labor, folks get comfortable strictly focusing on their own specialties. They figure they‘re going to get paid, no matter what. Sales is someone else’s responsibility, they think. At the governmental level, it can be even worse. They can feel like their organization exists without customers, sales, or accountability.

Sales is the key to the entrepreneurial culture. Three entrepreneurs in a garage have no question that they must make sales happen or they won’t be there tomorrow. No matter what their skill set, all know that sales are critical. So what happened as they grew? Simply, many new divisions were created and they separated themselves from sales! So it’s not so much how to build an entrepreneurial culture as it is how you lose it! Little by little, the principles that allow an entrepreneurial culture to survive and flourish are replaced by fear, compliance, and restrictions on communication. Compensation systems increasingly are based on attendance, status, and tenure, rather than sales, growth, and productivity.

In order to attract and retain a staff with entrepreneurial DNA, you must provide the fertile ground that is essential for them to thrive and be effective. Just like an early stage startup, you must provide a culture of permission, enthusiasm, inclusiveness, recognition, acknowledgment, and performance-based compensation. The customer experience must be more important than the structural or political limitations of the organization.

You must get back in touch with the organization’s goals and means of support (i.e. sales). That must be the entrepreneurial motive that overrides corporate divisions of labor, status, and tenure. Serve your customer with an engaged and empowered culture that wants to, and is allowed to, deliver the excellent customer experience you desire. Your people are engaged when they know they can make a difference, and are encouraged, appreciated and compensated to do so!

Who We Are

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

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Entrepreneurs’ Organization – Three Sacred Cows of Corporate Structure

Michael Houlihan & Bonnie Harvey — Fri, 18 Sep 2015 20:51:57 +0000

Corporations today say they want a more entrepreneurial culture. Some of the top search terms coming out of the C-Suite today are: entrepreneurial culture, employee engagement, and employee empowerment.

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: Read more…

Who We Are

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

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Communication World Interview

Michael Houlihan & Bonnie Harvey — Thu, 20 Nov 2014 20:04:58 +0000

We were recently interviewed by Natasha Nicholson of Communication World Magazine on how to create an entrepreneurial culture. To read the article, please visit Communication World Magazine. To listen to the audio interview, please click the play button below.

https://thebarefootspirit.com/wp-content/uploads/2014/11/Communication-World-Interview.mp3

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The President Salutes Millennial Entrepreneurs

Michael Houlihan & Bonnie Harvey — Sat, 11 Oct 2014 18:30:20 +0000

Last week President Obama made a stop at Cross Campus’ innovative collaborative space. It is a start-up hub that brings together entrepreneurs, start-up teams, freelancers, venture capitalists, and creative professionals. More and more of these hubs are popping up all over the country. We have spoken at the Syracuse Tech Garden in Upstate New York, will be speaking next week at Florida Atlantic University’s newly opened Tech Runway in Boca Raton.

As the President pointed out, many of the millennials (born between 1980 and 2005) entered the workforce during the recession when corporate entry level jobs all but disappeared. This has compelled that generation to take a more optimistic view of self-employment, entrepreneurship and self- reliance. “And all of that can support millions of new jobs. So in some ways entrepreneurship is in the DNA of this generation,” he said.

We couldn’t agree more. Not only is “the gender pay gap lower than any other generation,” as he pointed out, but the number of female students of entrepreneurship we are seeing is truly remarkable – over 50%! What we like about the millennial students of entrepreneurship is they are truly interested in learning what skills they need to be successful. They soak up advice from experienced entrepreneurs like a sponge. They are ready to do what it takes to be successful. They don’t rely on the corporations for security like our generation did.

The President said the millennials are “…the nation’s largest generation, representing one-third of the population.” They are not just the largest, but they harbor the largest number of students of entrepreneurship. He said they are a driving force in rebuilding the nation’s economy, and one that will change the face of the business world, adding, “That’s going to change how we do things.” With reference to the “lost generation” label foisted on the millennials by some cynics, he countered, “I don’t buy that because when I travel around the country I see the kind of energy and hope and determination that so many of you are displaying here.”

We see it too. There are few folks who have spoken to 25 of the universities across the nation who teach entrepreneurship in the past year, but we are honored to be in that few. The state-of-the- art snapshot we see portends a bright future for the economy, mostly due to the entrepreneurial spirit of the millennials. Nobody is dozing off in class. Most are taking copious notes and asking great questions. They love to hear real success stories with all the mistakes and misconceptions admitted to by those who have been there, done that.

Just the way these millennial entrepreneurs work collaboratively with established entrepreneurs, academics and funders makes their whole approach much more likely to succeed. They want to know the best practices. They want to know how others solved the challenges they faced. They are very interested in all forms of cause marketing and positive company culture. They get it! Coming from a transparent generation, they know that doing good is good for business. And we are honored to help them achieve their goals.

Thank you Mr. President, for the encouragement, recognition and public support our future leaders need and deserve. Now, how about backing up the rhetoric with something tangible, something to further encourage millennial entrepreneurs, such as forgiving their student loans if they stay in business for 3 years and create 3 new jobs? Just a thought…

Who We Are

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

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The Entrepreneurial Culture is In Demand!

Michael Houlihan & Bonnie Harvey — Sat, 23 Aug 2014 18:30:54 +0000

The “entrepreneurial culture” is suddenly all the rage in, of all places, the C-Suites of large corporations. Why? Because they see small, agile companies moving quickly and seizing fleeting opportunities. They see an increasing number of start-ups disrupting entire industries with fresh, new takes on consumer demand with innovative products and services to satisfy them. And they don’t want to be left out.

Corporations want to know why they can’t have that culture in their own companies, and they’re under increasing pressure from board members and stockholders to make it happen. They find they have become over-organized and staid in their policies, procedures and structure. They are beginning to realize the very efficiencies of scale, standardization and mitigation of liability they built over so many years have actually disengaged and disempowered their own people.

Employees cannot be pressured into being engaged and empowered, nor can C-Suiters take a magic pill and create an entrepreneurial culture. This is not a fad or an item to be checked off this year. This is an on-going commitment that is contrary to some sacred corporate cows, such as compensation, compliance, and corporate structure. This change will require the introduction of a few new wild mustangs:

1. Pay for Performance. Unless your people are paid commensurate with their performance, they will be skeptical of any other initiatives to foster entrepreneurial culture. Some portion of their compensation must be based on production measured by sales, growth, and profitability. It’s nice to think that your people are driven by factors other than compensation, but the good ones always seem leave for higher paying jobs. Paying for attendance alone says “You get paid the same, whether the company makes a profit or not!” Entrepreneurs simply can’t afford to pay for attendance alone. Entrepreneurs have to hire entrepreneurial thinkers who are willing to “bet” their income on their own productivity.

2. Put Legal on a Short Leash. Too many corporations are virtually “run” by their well-meaning legal departments, who, in their desire to mitigate corporate liability, have actually hamstrung creativity. Instead of finding ways to make things happen, they tend to find ways to stop things from happening. We think legal should be required to develop parameters inside of which formal compliance reviews are not necessary. Further, their compensation should be based, at least in part, on sales, growth, and profitability. Why should they get paid the same whether the company stays relevant and competitive or not? “How can we do this legally?” should be the challenge, not, “Can we do this?”

3. Act Like a Two-Division Company. If the customer truly is on top, how can sales and customer service be on the bottom? All entrepreneurs know that no matter how their companies are officially organized, there is an overriding two-divisional structure and mindset: sales and sales-support. Everybody who is not in sales is in sales-support. This includes marketing, production and administration. Why? Because entrepreneurs are painfully aware of how everyone gets paid. It’s from the customer through sales. Sales and customer service know most about what the market needs, so provide a regular feedback loop that keeps marketing and production informed and relevant.

We’ve distilled out the essentials of the entrepreneurial culture we created at Barefoot to be applied to any corporation in our new book, The Entrepreneurial Culture, 23 Ways to Engage and Empower Your People. It will be released in early September, 2014, with the launch of Jeff Hayzlett’s new on-demand C-Suite TV, and will be available through the C-Suite Book Club. It’s the perfect companion to our New York Times bestselling business book, The Barefoot Spirit, How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. Check it out!

Who We Are

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

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Corporate Structure, Compliance, and Compensation Plans Can Stifle Employee Engagement

Michael Houlihan & Bonnie Harvey — Sat, 16 Aug 2014 18:30:22 +0000

Corporations today say they want a more entrepreneurial culture. Some of the top search terms coming out of the C-Suite today are: entrepreneurial culture, employee engagement, and employee empowerment.

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

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

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To Get True Entrepreneurial Culture, Corporations Must Pay for Performance

Michael Houlihan & Bonnie Harvey — Sat, 02 Aug 2014 18:30:35 +0000

Some of the most popular search terms we see coming from the so-called C-Suite (top corporate executives) these days are, “entrepreneurial culture, employee engagement, and employee empowerment.”

Nowadays it seems even the big corporations want to make the shift to a more entrepreneurial culture. So we put together a companion to The Barefoot Spirit just for the C-Suite. It’s called – you guessed it– The Entrepreneurial Culture, 23 Ways to Engage and Empower Your People.

We will be announcing it this week with several media appearances in New York, including the taping of a new TV show run by Jeff Hayzlett (the former Chief Marketing Officer of Eastman Kodak) called C-Suite TV. We are very excited to have our new book launch coincide with the launch of the C-Suite TV and C-suite Book Club in early September.

We saw a great cartoon recently where a haggard employee was sitting at a bar after work, complaining to the bartender, “Sure they want me to be creative and innovative, but I’ve got a career to think about!” One of the chapters from The Entrepreneurial Culture suggests entrepreneurial compensation to solve this problem.

Chapter Four

Use performance-based compensation, and share the wealth.

Allow us to be blunt: we don’t think that set salaries are a great idea. When you have a compensation plan based on an hourly rate, you’re paying for attendance, not production. Regardless of how much they do or don’t accomplish, your employees will have an “I was there, pay me!” attitude…and can you blame them? Instead, our experience has shown us that performance-based compensation is better for everyone– you, your employees, and your company as a whole.

We created a pretty radical pay system at our company for a simple reason: We were a small company that needed to sell large quantities of merchandise, and we couldn’t afford unproductive people. So basically, we asked employees to bet on their own productivity. (Or as Michael told job applicants, he was asking people to bet on themselves.)

For salespeople specifically (and to a lesser extent, sales-support people), we offered a small base salary and told new hires, “The more you sell, the more you make. There’s no limit.” And in order to ensure that our employees didn’t ease off when they felt they were making “enough,” we set up an increasing incentive, so each step—though harder—would be worth a lot more than the last.

Here’s an example of how it worked: If someone sold, say, 100 cases in April 2000, and 100 cases in April 2001 (these numbers are unrealistically small for simplicity), their commission would be the same in both years. But if they sold 10 percent more – 110 cases – they would get $1 for every case over that 100, or $10 more.

If they sold 20 percent more in April 2001 – 120 cases – they would get $2 per case for every case over 100. Not just $1 for cases 101-110 and $2 for cases 111-120; they would make $2 for each case, or $40 more. They didn’t just get higher pay for additional growth, they got the boost for all the growth. It kept multiplying. So, 30 percent more – 130 cases – would earn $3 times 30 cases, or $90, and on up. (And again, keep in mind that these numbers are unrealistically small!)

At various points, we were chastised by other businesspeople who felt that we were “overpaying” salespeople. This was partially due to the fact that several of our top salespeople made more than we, the owners, did! Yet when we looked at the numbers, we knew we were doing the right thing.

Our unorthodox compensation system didn’t stop with our salespeople, either. Performance-based pay also applied to our sales support-staff (i.e., everyone who wasn’t a salesperson). In addition to their salaries, these employees received bonuses based on quarterly sales.

At first, many members of our sales-support staff were skeptical. For example, one bookkeeper claimed that it wasn’t fair to be paid a bonus based on quarterly sales because bookkeepers could not affect sales. Turns out, that claim wasn’t entirely accurate. Here’s what happened: Soon thereafter, one of our salespeople got a last-minute meeting with “Mr. Big,” a supermarket chain buyer, at 8:00 AM the next morning. And because the bookkeeper in question knew that his bonus would be affected by the sale, he made sure that the salesperson had all the necessary reports by 7:00 AM. Needless to say, our salesperson came back to the office with the purchase order.

Here’s another example of how pay-for-performance motivated our sales-support staff. One day, a gentleman walked into our reception area wearing an aloha shirt and Bermuda shorts. Although he appeared to be on vacation, this man was checking out our wine display and everything written on the walls. Our receptionist, who knew that her bonus was based on sales, proactively asked the visitor if he was a wine buyer. When the man shared that he was actually a big wine buyer for a 30-store chain in the Southwest, our receptionist immediately introduced him to our national sales manager. And because this wine buyer was relaxed, on vacation, and in discovery mode, he ended up putting our product in all of his 30 stores! You can bet that our receptionist really savored that particular quarter’s bonus.

Overall, performance-based pay really helped us grow, and best of all, the increased “pay” was “found money” that cost us nothing.Plus, we reduced turnover, which is the #1 hidden cost of doing business. Think about it: when members of your team leave, you don’t just lose those employees; you lose their hours of training, their institutional knowledge and their relationships outside the company. In the case of salespeople, you can lose customers who are more loyal to your former employees than the product they represented. Plus, it can be costly to look for and train new candidates.

Basically, our compensation system meant that producers couldn’t afford to leave, and non-producers couldn’t afford to stay. Meanwhile, we constantly attracted new go-getters who were willing to bet on themselves.

It’s simple: How you treat your employees directly correlates to how successful your business will be. If you treat them like a commodity—if you’re stingy with pay, recognition, and benefits—they’ll do only the bare minimum to keep their jobs, and eventually, they’ll leave.

We suggest you use performance-based compensation, too. Yes, every company and every industry is different, but if it’s possible to earn profits, it’s possible to tie those profits to your employees’ salaries and bonuses—and we guarantee that you’ll see results! Sharing the wealth never looked so good!

Who We Are

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

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