It's an issue every small business owner struggles with. How do I get employees to be engaged and enthusiastic about their jobs? Can I inspire them to love this company as much as I do?

NetProspex, a software-as-a-service company that helps marketers manage data, seems to have some of the answers. For the past three years, it's been named among Boston Business Journal's 20 best places to work in Massachusetts, ranking No. 4 in the most recent survey. That's especially impressive considering that the company has grown from about 10 employees to more than 120 over the past five years.

But that's not the most important statistic, according to CEO Michael Bird. The company doubled in size last year, and more than half those new hires came from referrals by existing employees. "That's the metric I'm most proud of," he says. "I'm a big advocate of the net promoter score. People never recommend anything to their personal network--a restaurant, car, or job--if they don't personally believe in it. That's one of the most important metrics, and most companies don't pay attention to it."

How did NetProspex gain so many enthusiastic, engaged employees? More important, can your company do the same? Yes, Bird says. Here's how:

1. Don't settle for less-than-terriffic hires.

"It's hard to hire great people. Everybody struggles with that," Bird says. The key, he adds, is never to settle for an employee who doesn't feel like a great addition.

"The best way to miss your goals is by not meeting your hiring plan," he says. "Especially if you hire the wrong people. Hiring one wrong person is worse than three empty seats in terms of the time and energy eaten up. So we value hiring the right person no matter how many cycles it takes."

Hiring is only half the battle, he adds. How you bring a new hire into the company also makes a big difference, so onboarding new people at NetProspex is a big deal. "We try to do a mix of hires together if we can," Bird says. "People get exposed to the whole company and what we're trying to do, setting the cultural mindset right from the start. Every dollar we spend on that process pays for itself in multiples."

2. Free food is not the answer (but you still need to provide it).

"A lot of companies think, 'We have M&Ms everywhere. That's enough,'" Bird says. "It has to go way beyond unlimited amounts of sugar, beer on Fridays, and a yoga class on Wednesdays--all of which we do. That's just table stakes." Really making employees feel motivated means providing more than perks like these. And offering free amenities at a workplace where employees don't feel their ideas and contributions are valued might simply turn them cynical.

3. Show your face. Often.

Bird is a big proponent of MBWA (managing by wandering around). So much so that, until the company's most recent round of financing, he didn't even have an office of his own. Strictly speaking, he still doesn't--he shares one with the company's CFO. "In the middle of raising a C round of venture financing, I had to be inside an office more than usual. But I feel like I'm in jail in there," he says.

Being out among everyone--popping by different workspaces--makes him accessible to all employees, and he encourages other NetProspex leaders to do the same. In fact, since the company recently moved to two floors, Bird has been wearing a step tracker, with the goal of reaching 10,000 steps a day--within the office.

4. Ask questions. Then really listen to the answers.

Bird asks NetProspex managers to do two things: First, ask questions of employees. Second, really listen to the answers and make an effort to retain the information. "That's a place where a lot of people miss the mark," he says. "They don't want to listen. They're just asking a question because they think they should."

5. Set goals together.

Some goals, such as reaching financial benchmarks or product-launch dates required by investors, need to be imposed from above. But wherever possible, Bird tries to set goals collaboratively with his team.

That way, he and the team can settle on objectives that have just the right level of difficulty. "We don't want to set goals that are wildly unattainable," he says. "But it should be a bit of a stretch. We don't want people to coast, and the people we hire don't like to coast. You can't find that balance if there isn't some collaboration. And you won't get buy-in."

6. Forget cash incentives.

Instead, motivate people with incentives they really want. For instance, as the company grew and parking became tight, Bird established VIP parking places for employees who met certain goals. For a developer facing a very tight release deadline, Bird took personalized incentives literally to new heights.

"He loves some special beer brewed only once a year in Maine," he says. "He also just got his pilot's license. We said, 'OK, if you can get this done by X date, we'll pay for the hours to lease the plane and fly to Maine and buy the beer on the day it's available.'" The developer met the deadline, and flew off for his beer. "That was an accelerated timeframe," Bird says. "It was an absolute stretch to get it done."

7. Let them make mistakes.

Bird gives employees a lot of guidance about overall goals and directions. Then he gives them a lot of autonomy. "I don't have the license on all the good ideas, and any leaders who think they do are wrong," he says. "If we do a good job of getting the right people, training them, and engaging them, they'll make the right decisions. If I have to make all the decisions, we won't get a lot done."

What if they make the wrong decisions? "You have to be willing to allow people to make mistakes," he says. "That's easy to say but hard to do. It's hard for the individual, too--people don't want to make mistakes."

The key is constant communication, he says. "Decisions happen. I find out about them or a manager finds out about them, and we don't get too far down the path without check-ins. When something goes wrong, we identify the problem and fix it fast. One rule here is that good news travels fast and bad news travels faster. That helps."

8. Treat them like investors, because they are.

In today's job market, the kind of engaged, enthusiastic, talented people NetProspex hires have many other choices for their employment. This is something Bird always keeps in mind.

"I want people to want to be here," he says. "Our employees don't have to be here. If they're good, they can go anywhere. That's why we try to grow from within, investing in their careers. They're investing in us by being here, and we're investing in them as well. It helps breed a culture that's mutually positive."

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