Smells Like Team Spirit.

Boosting Employee Engagement

First, a cold hard truth: engagement takes a hit when you're in wartime. A new competitor is snagging some of your market share? You're struggling to fundraise while your runway is getting shorter and shorter? You just had to do layoffs? All of this impacts morale, and if you haven't done the foundational work needed to secure employee motivation and happiness, you will feel this impact tenfold.

Since the last few years have been difficult for entrepreneurs, particularly in Canada, I’m not surprised that this is a popular topic of conversation among the founders I know.

So let's talk about boosting employee engagement by covering the reasons why employees find themselves disengaged (beyond personal reasons, which you have no control over).

Lack of incentives/Poor compensation

I define incentives/compensation as the combination of: salary, equity (stock options), benefits, perks, professional opportunities (such as learning new skills, going to conferences or other events, etc) and flexibility (WFH or hybrid, ability to set your own schedule, working from another city or country, etc).

Startups can rarely offer market rate on salaries and few can offer benefits like health, dental, RRSP or IRA matching. If you haven’t gotten substantial funding, odds are you also can’t offer costly perks like free gym memberships, transit passes, lunches, etc.

There are three things I highly recommend you do to make employees feel like they are properly incentivized/compensated:

1. Offer stock options for every role and give stock option bonuses to reward strong performance. Take the time to make sure employees understand how ESOPs work and walk them through terms like vesting, exercising, cliff, etc.

2. Offer resources to accelerate professional growth. This can be a physical and/or virtual library with books, blogs, videos and other helpful materials. See if you can get tickets or access to events through your network (accelerators, investors, friends). Coursera and Udemy offer free courses on a variety of topics. Set up “Lunch & Learns” for employees to take turns teaching their peers a particular skill or subject.

3. Offer flexibility. Let your employees go to the gym or a doctor’s appointment in the middle of the day. If you have an in-office policy, reconsider it — studies show that people are happier and more productive in hybrid work models. As long as the work gets done on time and to your expectations, do you really need people at a desk from 9 to 5?

Confusion about roles and responsibilities

This occurs in companies of any size but tends to happen more often in startups because roles keep changing as the organization grows; if your startup is successful, that means constantly.

First and foremost, make your job descriptions flexible. You can do this by adding language such as “this role is subject to change as the company grows and/or receives funding…” / “you’ll wear many hats” / “the role will change over time but for the next 3-6 months, your priorities will be xyz.”

If you’re not doing this already, start having one-on-one meetings between managers and direct reports, 30-60 minutes, weekly or bi-weekly. These touch points can ensure that everyone is aware of their own priorities.

Finally, set OKRs (or any other goal framework). Start by outlining the major goals for the organization (“Find PMF” / “Be the most loved brand in [industry]” / “Breakeven”) and break them down into measurable targets. Then, come up with different initiatives to reach those targets, and assign an owner to each one. This way, responsibilities are clear regardless of title and everyone will understand how they’re contributing to the success of the company.

The A-Player’s Affliction

You want A-Players. The competent, disciplined, hardworking employees who are a good influence on the rest of your organization. These Aces don’t just keep up with your startup’s growth, sometimes they cause it.

But the surest way to kill your A-Players’ engagement is to put them in a team with B, C or D players. It’s like if Michael Jordan had played for the Celtics in ‘96 instead of the Bulls — sure, he might have improved their winning percentage, but it’s unlikely they would have won the championship.

Don’t bring in A-Players unless you’re ready to emphasize and enforce an A-Player culture. This means giving difficult feedback, or even letting people go for poor performance, regardless of personality fit. This means holding everyone accountable to the same standards. This means fostering a culture of excellence by promoting results, the ability to learn, and the ability to teach. Too often, I’ve seen founders and leaders promote based on potential rather than proven success.

If you’re losing A-Players, make sure to do exit interviews to understand their point of view but if you’re noticing their disengagement, get their feedback as soon as possible to see what you can improve before it’s too late.

Uncertainty about the fate of the company

This one is tricky; most startups have uncertain fates — in fact, over 90% of startups fail. So how do you keep people engaged if they’re constantly wondering if they’ll have jobs in 6 months?

Balance transparency with productivity. I’m a fan of being transparent with employees, letting them know when cash is a bit more tight, but I usually don’t share specifics like “we have two months of runway.” Why? Because if I had told my employees about every time I only had two months of runway, I would have given them four strokes in the last 18 months. Four unnecessary strokes because we were able to extend runway each time. It’s the nature of the beast. If a piece of information is likely to result in employees quitting or stressing, I think twice about sharing it.

However, try to avoid asking yourself this question altogether by favouring candidates/hires with either previous startup employment or a deep desire to work for a startup, knowing the trials and tribulations this entails.

Culture not defined or inaccurately defined

I see a lot of disengagement happen when a startup doesn’t have a well-defined culture, or their culture on paper is very different from their culture practically.

Some recommendations:

1. If you haven’t already, come up with your core values.

2. Bring your values into the interviewing process to make sure you’re hiring the right people for your organization (more on this here).

3. Come up with habits, rituals and artifacts to strengthen your culture. Nerdy and collaborative? Host a monthly game night. Disciplined and accountable? Hold a weekly All-Hands where everyone gives an update on their projects. Want to prioritize self-improvement? Start an employee book club. Come up with a company song, handshake, coveted prize — turn a pet into a mascot, a play on words into a chant. The possibilities are endless.

4. Survey your team. Do they know your core values? Agree that they’re strong? Is there another value they think should be added? What do they like or dislike about the culture?

5. Don’t have values or a vision/mission just because they “look good.” This helps no one. It’s okay if your culture is more competitive than collaborative - by being upfront you can ensure that you’re hiring the right people and that they won’t feel out of place.

If you’re unsure where your employee engagement stands today, consider using a tool (like OfficeVibe) and if you haven’t already, look into hiring a Chief of Staff, HR/People Ops specialist and/or an external resource like a leadership coach.

Voila! Avoid future headaches by setting up a good infrastructure for employee engagement. Onward 🚀