6 Secrets to Running a Virtual Company
January 1st, 2008 (6:00am) Dian Schaffhauser 16 Comments
Michelle LaBrosse believes she knows how to motivate people. After all, the company she founded — Cheetah Learning — trains people to achieve their project management credential, the Project Management Institute’s Project Management Professional or PMP. She says that 97% of the people who attend one of Cheetah’s classes will pass their exam.
That focus on motivation trickles through to how she runs her 20-person firm, a totally virtual operation with people in Ohio, Connecticut, Nevada, California and Alaska. “I run a boss-free zone,” she says. “We don’t like people who want to micro manage. We also don’t want people who want to be babysat.”
How motivated is the staff? One person who had surgery wasn’t making plans to give herself time off for recovery. After all, the thinking goes, if we’re working from home offices, why can’t we do it while lying in bed? So LaBrosse offered her $5,000 to take off an entire week and let others pick up the slack. “She said it was the hardest week of her life,” reports LaBrosse, but she got the payoff.
Not so long ago, LaBrosse says, she’d forgotten her roots and decided to open up an office so that the company would have a headquarters. Suddenly, payroll was up and profits were down. Most of the people in that office have since been booted out and profits are back up — with the current staff focused on customer-facing activities.
Here are six secrets to LaBrosse’s success.
Use the web to stay in touch with customers. Cheetah has eliminated printed marketing materials totally. That philosophy was confirmed recently in a decision about how to thank its 2007 customers for their business. “A couple of years ago, we sent out cards to 9,000 students,” says LaBrosse. “That cost me $18,000 — ridiculous.” Along with the card was an invitation to take a free course, which 900 people took advantage of. This year, LaBrosse decided to send out an email holiday greeting — and included free access to video cooking lessons online.” That emailer had a 25% open rate — higher than the cards, as far as LaBrosse calculates it. “I didn’t print out any materials. They got a better product.” Total cost: $5,000 to sponsor the site providing the cooking lessons.
Invest once, grow infinitely. LaBrosse says she has very little overhead in her infrastructure. The company built its web site over seven years, and it’s fully depreciated. She figures she can triple her business before she needs to invest anymore.
Hire technically literate people with an attitude that they can work anyplace anytime. She gives people new notebook computers every 18 months. They all have iPhones. Their high-speed Internet access is paid for. They receive $150 a month towards their cell phone bills. LaBrosse points out, “I don’t have to pay for their electricity, heat or rent for office space. I can pass that onto them in higher salaries and bigger bonuses.”
Look everywhere for good people to hire. One of her top customer service people came from LaBrosse’s bank. “I saw him every week when I’d go into the bank,” she says. “He’d just been promoted to manager, and they’d stop doing a lot of their customer-focused activities. I told him, come to work for us!” She starts everybody in customer service (another word for “sales” at Cheetah). After six months, she says, “We figure out the best fit for them.”
Stay in touch with your team daily. LaBrosse says she “touches” people almost every day — by instant messaging and email and phone (a “distant second”). She — along with everybody else — can monitor company health by monitoring sales through a CRM system that tracks the results of sales and marketing efforts.
Get together in person too. The most recent gathering for Cheetah took place in Vegas for the company holiday party. LaBrosse flew them and their families in, allowed them to choose their own hotels, covered a nice dinner and tickets for the Blue Man Group and gave them $500 each for spending money.
16 Comments Post your own comment
Brian says: January 1st, 2008 7:12am
Great article. There are some good take aways for regular business too and I call them “Free Benefits”, although there is some cost associated they are free in the sense of costing the company very little to get a lot back from employees.
Michelle clearly trusts her employees and understands that investing in them is an investment for her company. Little things like keeping laptops up to date, giving them iPhones etc mean a lot to her people I bet. The trip to Vegas with spending money no less. These things build loyalty to the company, something that is fading these days.
I wonder what her attrition rate is? I bet very low.
I also bet her staff puts in more hours than are expected. When you give you get.
I could go on and on here.
Anyway good work.
Amie Gillingham says: January 1st, 2008 7:49am
I came away from this VERY inspired. We’re also totally virtual, although not yet in a position to do as much for our employees yet(or even hire more than we have). But I definitely see Michelle’s model as one we want to emulate as we grow over the next year.
Davey Moyers says: January 1st, 2008 8:27am
Where do I sign up.
Trina Roach says: January 1st, 2008 9:08am
What a great aspirational message for 2008!
As a leadership and business coach, I work with both entrepreneurs who went into business for themselves in order to make a difference in their own lives and the lives of the people they work with, as well as executives who want to find a new (read: better) way to work with their teams. I will certainly enjoy passing this article on to inspire both groups and to share and motivate a discussion around the great tips Michelle includes.
Chapeau!
howardtoronto says: January 1st, 2008 9:26am
I have ambitious plans for 2008 and do run a virtual company. Project management has always been an issue for me as a manager. I can grow if can handle 10s of projects. It is mostly about the juggling act. Anyways, I would like to mention what is becoming my online reality - Vertabase. If it is ok, here is a link to a case history that tells the story well on their site: http://www.vertabase.com/blog/project-management-software-for-marketing-companies-and-ad-agencies/ .
There is a big trick in herding creative cats who are generally poor project managers. This is a real solution.
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Matthew Griffin says: January 1st, 2008 1:25pm
I love her philosophy and the world is obviously ready for it too based on her success. It’s inspiring to see someone make a business work and also empower employees to live a lifestyle that doesn’t kill their relationships with family and friends.
Grahame says: January 2nd, 2008 12:47am
Michelle LaBrosse? Gimmie a job - now! It sounds like a great company with a great philosophy. I used to be part of a virtual company too. We published a trade magazine with the editorial, design and advertising “offices” hundreds of miles apart. It worked great, but the publisher/owner had aspirations to be seen as a big wheel rather than a virtual big wheel and brought it all in-house. The magazine still gets published, but if the last set of accounts are accurate, its not making a lot of money for its owner. Oh well…
Dian says: January 2nd, 2008 8:47am
Actually, Grahame, I asked Michelle if she had any job openings. Her response: She’s looking for a really really great PHP programmer. :-)
Eric says: January 2nd, 2008 10:11am
I can’t believe that phone conversations come a distant second to email and IM. If I ran a business like that (virtual, technological, or otherwise), I’d lose every client I had. Other than ‘personal touch,’ I’ve found that the next best thing is picking up the phone and closing Outlook. I don’t see how sales or project management could be run efficiently when relying on email so heavily.
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Carey says: January 13th, 2008 10:29am
I see email as the caffeine of business today. With coffee, you have to know when to put the Joe down or you get the jitters. In business, you have to know when to pick up the phone or do something in person…and I think LaBrosses’ point was about the power of the technology, and how email is a critical communication touch point — not the only one.
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