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Entrepreneurial spirit Featured

12:59pm EDT June 27, 2006
Chris Koehler gave up running a $50 million business to become president of RATIONAL Canada, a subsidiary of Germany-based RATIONAL with revenue of less than $1 million.

“It was the smallest business I had ever touched, but unique and interesting in that it was a start-up,” Koehler says.

During Koehler’s fours years with the company, which is best known for its computerized cooking unit — the SelfCooking Center — RATIONAL Canada’s revenue grew more than 1,000 percent to reach $11 million. That success earned Koehler a promotion to president of the company’s $21 million counterpart, RATIONAL USA.

RATIONAL USA’s revenue has increased from $13 million to more than $21 million over the last two years, and Koehler plans to continue that growth by challenging his employees to be entrepreneurial.

“My approach is really to make people into entrepreneurs and give them ownership of their business and challenge them in that way to think first and then act,” Koehler says.

Smart Business spoke with Koehler about the challenges of growth and how he motivates and retains employees.

What challenges come with being president of a fast-growing company?
The biggest challenge is finding enough great people, because growth and the company and its result is directly tied to having enough great people with the right attitude that want to win together.

Also staying focused on the process. Sometimes when you grow fast, you can get off on tangents, so make sure you stay tied to your core values, your core objectives and the processes that you defined as a way to get there.

As you grow, you add complexity to your business. Complexity can be a killer in a business, but if you continue to challenge yourself to come back to the core process as opposed to, let’s say, departments — what is it that we are ultimately trying to achieve as an output, and what are the inputs? — then we have a process. Whereas if we just look at objectives, then we’re managing numbers, we’re not managing how we do it.

What are the most important qualities you look for in an employee?
Always passion and attitude in people. You can train other skill sets. We would like people to be computer-literate in this day and age, but you can train almost anything.

You can’t train passion. You can’t train attitude. You have to find people that want to win, that are tenacious, that are resourceful, that don’t readily accept ‘no’ as an answer.

Once you have those people, how do you retain them?
They have to see opportunity. In a growth company, there are constantly new opportunities because as you grow and evolve, your structure changes and you add management positions or supervisory positions. People who are here see that as an opportunity to further their own development.

We communicate in a very transparent way, with charts showing results both at a team level or an individual level throughout the business, and we’re open with those numbers even to the operating costs and the profitability of the business. We put a profit-sharing plan in place that will afford them the opportunity to earn up to an extra month of salary on top of their personalized bonus.

We have personal objectives and everybody is tied into those in the same way. If you have a sales assistant who works here at headquarters with somebody who is out in the field, the sales assistant’s bonus compensation is tied to the field consultant’s.

We really want to have a team that’s tied together that wins together and loses together. We all have to strive together in this entrepreneurial environment to achieve the same goals.

How do you encourage employees to be entrepreneurial?
We asked (regional sales managers) to build up a cost budget for 2006 and gave them a framework of things to choose from with an activity plan. So it was their plan to develop with some top-down guidance on the expectations, but then they could fill in what it is they thought they needed to do to get there.

Plus, we furnish them with a mini (profit and loss statement), so its like a mini-business unit, so they can see the direct result of sales, margins, costs they incurred for that month. They’re a small business owner at that point in time.

It’s fun to see people develop and understand their business better and take control of it and be motivated to want to do it, as opposed to being managed to do tasks.

HOW TO REACH: RATIONAL USA, www.rationalusa.com