In late 2010 the Bureau of Labor Statistics reported that on average an employee changes jobs 11 times between the ages of 18 and 42. That translates to an average tenure with a given employer of less than 2.5 years.

In the aerospace industry, as well as in other high technology, service-focused industries, a primary indicator of market-dominating success is the prevalence of employee talent with 5 to 20+ years of experience in the company. Those high performers that grow up with your company gain wisdom from battle scars and lessons learned.

To paraphrase Mastercard: Value of talented employees that know your business and customers intimately? Priceless.

This might frighten you, but it can also excite: Be great at retaining great talent and industry-leading success will follow. There is much to be said for “Do One Thing Well” and this is a pretty good “One Thing.” There are many strategies for retention – incentive packages, vesting options, generous benefits. Some are expensive; some work better than others.

But I believe one of the most powerful strategies flies under the radar:

If you want talent that stays, manage for the family.

When Starsys was founded more than 20 years ago, we had declared that while we strived to be best-in-class, we would also make quality-of-life a guiding principle. We drove that deep into our company DNA along with the more familiar excellence, integrity and innovation. We wanted to be the kind of company we wanted to work for.

This evolved over the years to managing the company to be not only the company employees wanted to work at, but to be the company that the family was glad mom or dad worked for. It permeated our decision process: balancing the conflicting needs of financial return with the quality of life of our employee families.

Dozens of policies and practices came from this balancing act through the years. None by themselves were earth-shaking, but the sum total said much about what was important to us:

•                Children and spouses were welcomed in the company. We took the time to get to know the family, explain our work, make it clear that a visit was welcome, not an imposition.

•                We encouraged employees to take company time to go into their children’s classrooms, whether it be talking about Mars, performing Mr. Wizard experiments with liquid nitrogen or storytelling.

•                We worked to minimize overnight travel. When possible we were creative with travel budgets to support employees taking spouses or the family along to special locations.

•                Rewards for performance honored the spouse: weekends away at a bed and breakfast, hot air balloon rides for two.

•                We supported local schools by opening the doors for tours given by company leadership.

•                We experimented with, and then adopted a work schedule with every other Friday off, giving employee families a three-day weekend 26 times a year (a topic for a future blog).

The result?

For the first 15 years of Starsys growth, annual employee retention hovered between 90 and 95 percent. At our 15-year anniversary we counted 65 employees with five or more years of tenure. More than 20 of these had 10 years or more experience in our company.

By any standard, the Starsys Christmas party was epic. A talent show with a manager on a unicycle. Great food. A rowdy band. A gag gift exchange that included a can of pickled herring so beyond its spoil date it had inflated and had to be kept away from sharp objects.

The evening was a Keeper, one we knew we would all remember. After dinner I stood in the warm glow of a great party to toast and thank the 150 employees and spouses that were there. When I got to the point of sharing the profit numbers for the year I was astonished by spontaneous cheering. Not the “Since Jim the suck-up is clapping, I guess we all should” variety. The room just erupted with “Wahooo!” I was caught unawares by not only the enthusiasm, but by my emotional response to it.

Towards the end of the evening she went out of her way to track me down. Mary was the wife of a top project manager we had brought into the company a couple years back, and she motioned me to a quiet part of the room. “I just wanted you to know how much it means to us the Bill is working here.” I brushed off the compliment with a quick “We’re glad to have him…” She stopped me short and put her hand on my forearm. “No. You need to know that it has changed our family. Thank you. We are here for good.”

As Christmas parties go, that evening was a high-water mark for the company. Looking back, the telling thing was my most memorable moment. Rather than the public celebration of the money made it was Mary’s private “thank you.”

Later that year Bill navigated us through a minefield of a program and saved us far more than any of our family-oriented management had cost. Although not our original intent, through the years we discovered that driving “quality of life” deep into our corporate DNA was also very good business.

When Starsys Research was sold to SpaceDev Inc, (and later acquired by Sierra Nevada Corporation),  people suggested that I share the Starsys story, not only because it’s a great story, but also as a framework for passing on lessons learned.

The catalyst for this came three years ago in a Pearl Street coffee shop. I was telling the story to a friend, and on the way out a woman unknown to me said “Excuse me, but I couldn’t help but overhear. You really should be telling that story as a public speaker” and helped introduce me to the head of a speakers bureau. 

 Three years later the result is “Jailbreak! Escaping the Entrepreneurs Prison” which uses the framework of a great entrepreneurial story to describe the self limiting prison walls that entrepreneurs can’t help but create because of their unique, visionary DNA’s.  

 With the sponsorship of the CU aerospace department and eSpace.  I’m going to be giving a version of the talk at the University of Colorado campus in the Old Main theatre Dec. 1st at 6:30.  

http://tinyurl.com/8358u46

It is a great story, and Old Main is a wonderful venue;  a 200 seat theatre in the first building built on campus.  Parking is a bit sporty.  There are some parking spots on Pleasant Street, or on the Hill, or the Euclid pay lot.  Location of Old Main is:

http://www.colorado.edu/Directories/WebMap/map.html?bldg=MAIN

Would love to see you there!

Scott

Bill Nye the Science Guy is my hero.  I want his job.  I told him so when I met him a couple of years back at the National Space Symposium.  I expected it to quickly lead to a pithy conversation over beers about how he has been looking for his successor.  His response made it clear I was probably the ten thousandth person that had asked the same thing.  He exited the elevator and disappeared into the crowd.

Plan B:

Ahhh yes….bring your child to work day (remember how it used to be bring your daughter to work day, then the PC police intervened?).  This is often delegated into HR: PLEASE come up with a program to keep the kids interested and let everyone do their work. 

I propose a different strategy: Ingredients needed:

-five ping pong balls

-five carnations

-package of marshmallows

-bag of popcorn

-bunch of balloons

-two quarts half and half, two quarts cream, one bag frozen strawberries, thawed, bunch of sugar

-four liters liquid nitrogen (surprisingly easy to get at your local welding supply store)

-wizards hat and cape

-safety glasses and gloves

-CEO

This of course worked particularly well for Starsys as we could make a tenuous tie-in to our product (you see children, spacecraft hardware has to be able to work when it’s really, really cold), but the reality was it was an excuse to scratch my science guy itch while creating a legendary (or at least memorable) experience for the sons and daughters, and slip in some teaching at the same time.

Turns out liquid nitrogen is hugely underrated as a toy.  It is truly amazing entertaining stuff, and not as dangerous as you might think (as long as the right precautions are taken)  I’ll leave it as an exercise as a reader to google “liquid nitrogen experiments” to find out what you do with the above, except to say that it is supercool to put a couple of tangential pin holes into a ping pong ball, fill it with LN2, put it on the floor, have a child blow on it with warm air, and have it quickly spin up to thousands of RPM.  

And liquid nitrogen ice cream is an undiscovered treat.  you can whip up some of the best ice cream anyone has ever tasted, in a flurry of fog, in less than a minute.  Gives a great excuse to bring the rest of the company into the room and have an ice cream break with their kids.

Reportedly there is an experiment that can be done with goldfish that involves freezing them solid and bringing them back to life again, but I could picture a number of ways this could go horribly wrong, particularly after “Finding Nemo” so left that one to braver wizards.

Alright.  I’ll buy it’s great fun,..but what’s the pay off?  Have the CEO take a couple hours off to entertain kids?  You’re kidding me?

No.  

Lead your company for the family, not just the employee. Lead so that the family is thankful this is where Dad or Mom works.  Manage so that at the Christmas party,  a spouse grabs you, pulls you aside, looks you in the eye and says “I just have to tell you how much it means to our family, that my husband/my wife is a part of your organization…it has changed our lives”

Scott

What is your exit?

The question typically elicits a knowing chuckle or breath-in.  There are few other questions as provocative to an entrepreneur.

Or in other words….how and when are you as an entrepreneur going to create a financial reward for you and your investors for  the blood, sweat, tears that have been put into your venture?  The range of responses to this question is broad, with some having clear strategies.   Others squirm uncomfortably with the question:  Exit?  I Love this…why would I Exit?  Whether it is something that will happen next year or is 20 years away, it deserves a well thought through answer. 

Aaron Rose is an entrepreneur that is also the author of popular blog Solutions for a Sustainable World.  

Aaron teaches entrepreneurship, and promotes to his students the counterintuitive concept that the best exit is not necessarily the sale of a company.  Entrepreneurs are driven by a variety of motivations, one of which being to create wealth quickly, but often other values are behind the entrepreneurial drive, not the least of which is to create a place to work that supports the quality of life for those within the organization, and for that influence to be as broad as possible.  The potential problem with a “sale of company” exit, is that the quality of life of the entrepreneur themselves might be catalyzed by the wealth, but the acquiring company is likely to have a narrower, financially focused agenda, with the result that the entrepreneur wins financially, but  the individuals within the company that share the vision are left behind in an organization that does not carry the “quality of life” torch forward in the same way.  

This is particularly true with the  tech-entrepreneurs that may have bootstrapped their company.  The motivations for starting the company are often less “to make money and retire quickly” than to create a unique context for themselves and others to do what they love to do and be paid well for it.   As I’ve talked to other entrepreneurs that have sold their companies, they have shared that the conversation by the acquiring company prior to sale almost always emphasizes the importance and value of the culture that has been created, with passionate assurances that this will continue into the future. However; those promises do not always survive the requirement that a merger perform financially.  I am aware of one particular situation ten years ago where that promise lasted for about 24 hours, terminating with a “we are going to do it differently now” speech to the assembled company the day after the merger closed.   I consider myself fortunate that in the case of the sale of my company, Starsys Research to SpaceDev, those promises were kept, and the company continued forward with a unique culture that emphasized quality of life.

Aaron’s point of view was to look at exit more broadly;  create an organization that has at its heart a robust financial model that is a strong enough generator of cash to provide liquidity to shareholders through its operation rather than through its sale.  From the get-go, make decisions about what business you will be in, how you will do business, from a focus on “how can I return my investment to shareholders without having to sell the company”. The advantage of such a thing is the exit strategy has degrees of freedom…the financial reward for the entrepreneurs and investors is already in place, allowing the consideration of gentler transitions that accommodate a broader set of values, and ones that better serve all involved.

Scott

NASA-KC 135 “Vomit Comet”: Somewhere over the Gulf of Mexico

The tools for creating excellent organizations don’t change nearly as quickly as what those tools are called.  Shortly after Tom Peters “In Search of Excellence” arrived in the mid 80’s, Values (with a capital V) were touted as a powerful lever for the creation of extraordinary organizations.  As with other philosophies, Values management had a finite shelf life in terms of popularity. An unfortunate thing, given the leverage Values management provides.  Fortunately it experienced a rebirth in the last decade as Principal (capital P) based management. Yes…it is possible to draw a fine line between organizational Principals and Values, but it serves little purpose; independent of what it is called, they create the backbone of an Organizations DNA. Everything an organization is, derives from what that organization says (or more importantly, demonstrates) is important:  no kidding, we won’t compromise this, ever, Important (with a capital I).

The process of selling a company is not a quick one.  When we merged Starsys Research with SpaceDev, the courtship took 6 months, a big part of this was getting to know each others teams and how we would get along.

A key meeting was held with all the principals around the table and tensions were high. As a statement of solidarity with the acquiring company, I introduced the meeting by looking squarely at the COO of our new partner and declared that both Rich and I firmly believed in aggressively promoting two Values into the blended organization; profitability and the “F” word. The room went silent…really silent.   After a few seconds to let the uncomfortableness fully develop, I said “Fun”and the tension released.  

As a leader, you sometimes develop your organization from scratch. You determine your organizational DNA. What Values will it manifest? It is a decision not to be taken lightly. Without intention, the organization develops the values that the leader holds personally. Some of your personal values are high octane fuel, some are sugar in the gas tank.  As Yoda would say; Values; wisely you must choose.

Values declared for an organization often align somewhat expectedly (and boringly) with the product. They have a decision-by-committee feel to them: Hospitals declaring a commitment to “Medical Excellence”.  Restaurants declaring a commitment to “Customer Service”. In the formation of Starsys, we did declare Excellence, Integrity  andQuality as important; not much of a surprise, but at the same time, we tried something counter-intuitive:  We declared a set of Values sideways to the grain of your typical aerospace company; from the get-go we declared that Starsys would hold four Values in high regard:  Fun, Family, Balanced Lives and Failure Is Not An Option.

We were dead serious about Fun. When you walked in the company, you couldn’t miss the big sign saying “this is what we believe in”, and Fun was near the top of the list.  It brought out creativity.  It broke down silos between departments. It brought people together. It killed stress. It kept us from taking ourselves too seriously.  And most importantly, it attracted the best and brightest employees and customers to the company.  

Fun is hugely underrated.  In life, in relationships, in business.  If it’s Fun, it must be unimportant.  Sadly ironic, methinks.

I look forward to sharing stories from our years at Starsys that came from these Values: april fools jokes that are legendary.  Traditions far from PC that created friendships lasting for decades. Submitted for your approval; a case in point:

As an aerospace company, we had the opportunity to fly on the vomit comet many times.  This is the NASA plane that is used to simulate weightlessness.  When you test hardware on the plane, you experience 25 seconds of weightlessness at a time, 40 times in a row, whether or not your stomach can handle it (hence the name).  The Fun Value demanded that we would fly as many from Starsys as we possibly could on the plane as this was likely the closest any of us would get to being in space. Everyone could go..we needed “observers”.  If you wanted you could put your name in the hat for the weightlessness lotto.  You had the same chance if you were the CEO or were working the front desk. 

For those of back in the company, we participated vicariously through the “Vomit Comet Pool”.  A matrix was put on the wall of who was on the trip, and what days they were flying.  It was our version of March Madness. Put $5.00 in the kitty and check of who you thought would throw up on which days. The team reported in each day.  The best guess at the end won the pot.

The attached video is a compilation of one of the test flights where we evaluated an ejectable cover for a critical space-borne telescope (that worked perfectly in space I might add).  Enjoy!

Scott

#mce_temp_url#

Highlands of Scotland

It didn’t really take much time and always seemed easy.  All those business trips in planes, a couple hours to yourself, off the grid.  I started when Ryan was 5 and Alyssa was 1.  Spending 15 minutes each flight adding another page to a letter on the laptop,  each starting “Dear Alyssa” or “Dear Ryan” and following with all that was going on in our lives, what was great, what wasn’t, what Jackie and my fears and hopes were for them at that moment.  A snapshot of the past month.  Every month or two I would add another page, and over the years it began to transform from snapshots to a time-lapse movie of their growing up.  The changes were dramatic when taken in one reading  learning to walk, getting on the bus the first day, struggling through the science fair, first boyfriends or girlfriends.  A record of father-mother-son-daughter through the years. They did not know of the letters, and they each became more than 40 pages long.  

When Ryan was 15, we had had our first trip overseas, just the two of us, to Scotland.  The week before I printed out the letter with caligraphic type, and with great care pasted each page into an old, worn journal, the weatherbeaten cover a good match for the content.   At the end of our trip, I penned an introduction explaining the honor of being his father, and a final chapter, with the trip high-points of this father and son adventure.  I slipped the book onto his bed, not knowing when he would find it, or when he would read it.

Not a word was said by either of us for two days, that being the code of communication for father and son.  Two nights later I had reason to take a look at the book again, to check some fact, and when I picked it up it opened to a new page that I had not written.  

The freshly written letter started;  ”Dad, I don’t know if you will ever read this, but I need to share what it has been like for me these years…

The time it took to write the letter was nothing.  The remembering to add to it every trip was not hard.  And the value of the resulting written, shared record of a father and son is hard to measure.  I will never forget reading his response.

For those of us that travel, being away is hard.  I suggest that you find your own way to take a slice of that time to create something of great value that came from the being apart.

Scott