When Harvard Law graduate, Sheela Murthy, started her own law firm specializing in immigration law she was putting in 16-hour days and expected her small team of paralegals to do the same.
Murthy was just getting her Baltimore-based company off the ground and was the only lawyer there but "was doing the work of three."
Then, in the span of one week, three of her four paralegals walked out the door, frustrated by Murthy's management style.
"I think they were telling me, 'Buzz off, bozo. You're stressing the heck out of us,'" Murthy tells The Story Exchange.
The Indian-born Murthy says she demanded too much from her staff, pushing them to stay past midnight, and expecting them to "work like robots."
Murthy's experience is not entirely unusual for a startup. According to recent research from The Kaufmann Foundation, employee turnover is 35 percent in startups compared to 15 percent in established firms.
While the reasons for that higher rate vary, one problem new entrepreneurs face in managing employees is due to the uncertain nature of the startup environment itself, says Monica Mehta, author of The Entrepreneurial Instinct.
"If you've been working in a corporate environment the roles are clearly defined. In a startup environment the plan changes all the time and things are constantly evolving." Mehta tells The Story Exchange.
And with entrepreneurs wearing lots of hats -- and trying to get their employees to wear different hats as well -- there's bound to be tension.
Murthy's motivation for starting her firm stemmed from her own negative experiences working with a lawyer to obtain U.S. permanent residence. For her own company, she envisioned a culture of "compassion and empathy and caring about people."
But while Murthy was constantly telling her staff to take care of the needs of clients with compassion, she wasn't taking her own advice when it came to her employees.
The walkout was a "huge bucket of cold water" that made her realize if she wanted to grow and be a better boss, she had to change her ways. "I had to eat humble pie, do the work, and really begin to ask myself what am I doing wrong because I knew the problem was me," she says.
Mehta says entrepreneurs need to understand that what drives them is different from what motivates their staff. "They need to make sure that their incentives are aligned."
She adds that there are a number of benefits small business owners can offer their employees -- such as flexibile work arrangements, and 'having a say' in the company's direction -- that can make their companies more attractive than traditional work environments.
Entrepreneurs should also ensure that they are hiring the right type of employees, which in a startup, Mehta says, means people who are going to thrive in a constantly changing environment. "Three traits -- optimism, confidence and problem solving -- make people adaptable. I wouldn't recommend that you start profiling people but hiring people that are adaptable is an asset," Mehta says.
For Murthy, she learned to see her employees' working lives through their point of view and not only hers. She also became more sensitive to their concerns and acknowledged that they "have lives" outside of the office.
"I had to make them buy into my dream, and share my enthusiasm and excitement for the firm, our clients and our mission," she says. She began holding meetings with her team where they could brainstorm about the firm's mission and what could be improved in the firm's working environment.
Murthy's improved management style paid off. Today she has 92 employees, including 22 lawyers and Murthy.com is the most visited law firm website in the world.