At a time when many American businesses are waiting for the signal to reopen their doors, Mark Cuban has some compelling advice for employers:
Give your people equity in your company.
"Even if it's a small private company that may never grow big, if you're a dry cleaner, share," Cuban said in a recent interview with LinkedIn editor in chief Dan Roth. "Your employees will work harder. They'll recognize that they're an owner. They'll have a completely different perspective. And that benefits everybody."
As an employer, you'll need to depend on your employees more than ever, the billionaire Shark Tank investor and owner of the Dallas Mavericks said on a 30-minute LinkedIn podcast on what business owners can do to fight against the negative effects of the recent pandemic.
This isn't new advice from Cuban, who has long believed in giving ownership to employees as a way to motivate them.
"When we sold Broadcast.com to Yahoo, 20 years ago give or take, out of 330 employees, 300 became millionaires. And those 30 weren't only because they started too late. But they got paid as well," he said.
Of course, once those employees are invested, it's also important to leverage their relationships, as well as their smarts and knowledge of the business.
Cuban explained two ways to do just that.
Maintain good relationships
One idea Cuban floated was to put together a gift certificate program that gives customers a major discount for prepaying for services. For example, said Cuban, consider selling $500 gift certificates for $400, just to establish some cash flow.
But when it comes to offering these discounts, Cuban said, it's pivotal to have forward-facing employees making the calls--because it's these employees your customers know best.
"They have the personal relationships," said Cuban. "You want the people who have relationships with your customers calling each and every one of them, offering this special."
He continued, "Obviously, not everyone is going to say yes. But every 'yes' is a win for you ... The more calls you make, the more people you contact, the better position you're going to put yourself in."
Ask for ideas
By giving employees equity, you make them a greater partner in making sure the business succeeds. An additional advantage is that you can tap their knowledge for more ideas and potential innovation.
"Some of the best ideas and some of the best approaches will come from them, because they're on the frontlines," said Cuban. And now that the economy is experiencing a type of reset, it's exactly the time to turn to employees and ask for help.
"Now of all times, no CEO, no entrepreneur can do this alone. You need every single employee committed to helping you get through this. Recognize that. Reward them for it," said Cuban.
"You don't have all the answers. Don't pretend you do," he said.