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Go for it Featured

8:00pm EDT September 25, 2009

Mike Marcon didn’t want to fail when he launched Equity Risk Partners Inc. over a pizza with his wife back in October 2000. But he wasn’t afraid of disappointment either.

“I said, ‘I’m about to bet the house that I’m going to be able to build this company, and if it doesn’t work, we’re going to lose the house,’” Marcon says. “My wife looked at me and said, ‘That’s not why I married you. I didn’t marry you for the house. If we lose the house, we’ll go live in an apartment, and you’ll go do it all over again. So go do this and don’t worry about it.’ Ever since then, it’s given me the freedom to swing for the fences.”

That freedom gave the founder and CEO the positive energy he needed to make the financial services firm a success. Now with 45 employees, Marcon’s biggest challenge is making sure his people are ready to keep growing.

Smart Business spoke with Marcon about how to help your people keep pace with you and what to do when they no longer can.

Be upfront with people. Being able to continue to grow and develop the firm and attract the talent you need to continue to thrive without abdicating the responsibility you have to the people who were there with you on day one and still making them feel part of the overall success of the enterprise, that’s a significant challenge.

As we grow the firm, we might add a division or add a new practice group, and as those people come into the firm, they are used to being senior leaders where they came from. Are they going to displace the existing senior leader? How do you get them to work together? Obviously, in this type of environment, you need all the oars pulling in the same direction.

One of the things I pulled out of one of Jack Welch’s books was brutal honesty. Be upfront with them, be direct, and that solves a lot of problems. I’ve learned to not tap dance around these issues.

I sit down with my colleagues and I say, ‘Here’s the issue, here’s what we’re dealing with, and here’s why I want to bring this other person in. They’re not better than you or superior to you, but they are bringing this skill set and this business acumen, and we need to find a place for them. In order to do that, this is what I need you to do.’

Explain your plan. In our business in particular, insurance brokerage and insurance agencies, there tends to be a lot of firms that start up only to be sold a short time later and get merged into a larger business when the principals cash out.

It’s hard to get people vested emotionally and intellectually into a long-term business plan if they think the owner is going to cash out in three to five years. One of the things I repeat constantly is, ‘We are eight years into a 100-year history.’ I make it loud and clear to everybody that the firm isn’t going anywhere.

Think before you hire. One of the things I’ve learned is I don’t make decisions right away with personnel. I have an initial meeting and then I have them filter through the senior management team as well as some people below them.

It’s in the follow-up interviews that I do two things. One is I start to focus on potential areas of disconnect. I also really start to hammer on the uniqueness of our business model and how it’s different from where they worked before.

You can’t prevent someone from lying to your face, but I challenge them as best I can. I tell most of the people, ‘It doesn’t matter what you tell me now; everybody has their own alone time when it’s just them with their thoughts. Sometimes it’s when you’re working out. Sometimes it’s when you’re washing the dishes, whatever. When you have your alone time, I want you to think about the environment I just painted for you and whether you truly fit in this environment. I don’t want you to mistake not fitting with being an inferior person. There is just a right fit and a wrong fit for certain individuals. It’s better that we find it out now than we find out six months from now.’

That’s worked pretty well.

Do what you can to help. Sometimes you get the people that see the box above them on the organizational chart and they want it just because it’s above them. It doesn’t matter that they are not going to be happy there. It doesn’t matter that they are not going to perform well there. There are certain people that want the bigger title because that’s next.

In situations like that, it’s very easy for me to go to that person and say, ‘I want to put you over here, and I think this is the best spot for you.’

Those people, I can say, ‘I’m doing this because I’m putting you in a position to succeed. If you take this other opportunity, you are not going to succeed. It’s my responsibility to know the difference. That’s what I get paid to do.’

The other side of the coin is those people who just don’t belong in the organization anymore. The organization has passed them by. With those types of people, the key is to act right away. It’s a tough thing to do, and you don’t want to do it, especially if they have been loyal.

But very early on I got a good piece of advice from one of our board members: Deal with it right away because it’s not a surprise to the other person either. They know most of the time that the organization has moved passed them. They know they don’t fit in like they used to anymore.

Most people are not ignorant of that. So when you have the conversation with them, their usual response is, ‘Yeah, I know.’ Depending on how they have performed in the past, you make their landing as soft as you possibly can. You just deal with it.

How to reach: Equity Risk Partners Inc., (415) 874-7100 or www.equityriskpartners.com