What should you do when one of your key staff comes into your office and tells you they are resigning to go start their own competing business? The simple thing most of would do is to take their resignation and call them a Judas. But, consider an alternative. When your key executive has that entrepreneurial spark and an idea, try harnessing it to your advantage!
In an article on The Build Network, I was reminded of a great term that should be in every business owner’s vocabulary — “intrapreneur.” These are the people on your team that aren’t your typical 8:00 to 5:00 employees. They are the employees that help grow the firm, that work the extra hours, they challenge the status quo, they care about keeping the expenses in-check, they propose new ideas, and are generally more difficult to manage! But, if you can harness their entrepreneur approach as intrapreneurs, you can use their skills and energy to build growth in your business long-term, instead of allowing/forcing them to leave and start a competing business. From a succession perspective, these team members are necessary, but unless they are given a forum to succeed/contribute, you will lose them.
We have had many clients that have spent years grooming their successor, and for whatever reason, the successor ends up leaving the firm to start their own business. Sometimes this is because the comparison of buying-in versus building their own business just doesn’t “pencil out,” other times it is because the current owner won’t/hasn’t created a path to ownership. The loss of talented human capital in a personal services business is hard to quantify, but it can have a major impact on client retention, employee retention, your ability to retire, and morale. So, think twice before letting them walk out the door. Even if a staff member comes to you about striking out on their own — before you react like most of us owners would, find out what is driving their decision and what their plan is. Spend a moment and see if you can turn it into an opportunity for both parties to benefit.
Explore more on Succession Planning.
Want to read the article on The Build Network? Visit How to Create a Culture for Intrapreneurs at https://www.forbes.com/sites/lisaquast/2011/06/20/do-you-have-the-skills-to-be-a-successful-intrapreneur-corporate-entrepreneur/.
Original post: Jan. 6, 2014
Updated: July 8, 2019