Is The Corporate Brain Drain Inevitable?

Right now, it may just be a whiff of fear that's keeping your best employees from becoming micropreneurs. What happens when the wind changes?

Melissa Kirby, Contributor

July 17, 2012

4 Min Read

In his column, Here Comes Corporate Brain Drain, Jonathan Feldman warns: "If large enterprises that rely on innovators, like IT organizations, don't get their act together, there's going to be a massive brain drain, and we're all going to be in trouble."

Should we be alarmed? Not yet. Should we start getting a plan in place to keep our best and brightest? Most certainly.

People become entrepreneurs for all sorts of reasons. Some because they have to--they get laid off or have family duties or health issues that don't align with a conventional job. Some just don't like working for others; Amanda Palmer is, literally, the rock star example. And now, some are striking out on their own just because they can. Those are the ones you need to worry about.

The World Domination Summit, on which Feldman bases his premise, attracted a mix of attendees. Some are actively engaged in the quest to live "a remarkable life." Others just wanted to see what the fuss is about. After all, any event that sells out in 13 minutes must be worthwhile, right? I met some people who give leaders a glimpse into the challenges that lie ahead: an engineer from one of the world's most prestigious defense contractors who's now doing a Ph.D. in electrical engineering on a full scholarship for fun, an ex-Big Four tax accountant now working seasonally on his own terms, and a CIO who can frighten the willies off anyone with even a passing concern about security and who got kicked out of school for writing software for pleasure.

When such people hand in their notice, human resources tags them as "regrettable loses." They're not the malcontents we manage out. And they were at the World Domination Summit in force, learning how to forge the independence they crave while earning the income they need.

Leaders tend to tell themselves that the go-getter who just quit is a hard-wired entrepreneur and was always destined to break free of the 9-to-5 grind. The folks who enjoy the resource-rich and social environment of a large corporation are really the ones we want to keep anyway, right? Maybe. But the evidence suggests reality is more nuanced. Noam Wasserman, in his 2012 book The Founder's Dilemmas, says startups survive the longest when founded by people with midrange prior work experience--around 25 years. That's a long time to keep your wires hot if you're a natural-born entrepreneur.

CIOs have no room for complacency, because corporations no longer have a monopoly over "the means of production" (I love that old Marxism!). Chris Guillebeau's The $100 Startup boils it down to getting a product or service, finding people who want what you're offering, and having a means to get paid. A Web page costs just a few dollars for a domain name and hosting, and startups can find customers on Facebook, Twitter, or LinkedIn. Getting paid through PayPal costs next to nothing, too. Many of your smartest employees are cottoning on to this reality.

So why aren't they jumping ship in droves?

The check on the brain drain, for now, is the fear of risk. It goes like this: "Every two weeks I get a paycheck from BigCo Inc. It comes without fail. Business startups are statistically more likely to bomb than succeed. Ergo, starting my own business is risky. My mortgage/car payment/kid's education depends on that paycheck. I can't risk it."

We say "for now" because events in recent years have had a depressing effect on our willingness to take risk. Don't fly because the plane could get hijacked. Don't buy shares because the global financial crisis will gut your investment, and don't let your kids play outside because "something" might happen. Governments have responded to this risk-averse climate by increasing regulation and restricting our freedoms--and thus, presumably, the likelihood we'll get ourselves into dangerous situations. In Australia (and some corners of the United States) it's called the "nanny state," and apparently, some of us like it.

Fear of taking a chance is also what's keeping your best and brightest employees from striking out on their own and putting the World Domination Summit message into practice. There's still a perception that being employed by BigCo Inc. is safer.

The key word here is "perception." As the top brass in Barclays Bank or JPMorgan know all too well, it only takes one crack in the facade to kill off the perception of trustworthiness.

Many corporations are struggling in the current environment. Stalwarts of the corporate world have become obsolete, technology makes starting up your own business cheaper and easier, and people like Guillebeau and the denizens of the World Domination Summit are showing step by step how to detach from BigCo. The global financial climate is improving--yes, it's happening very slowly, but history shows that this too shall pass and we'll enter a cycle of growth and confidence. If corporations want to retain the best and brightest when that happens, we need to seriously lift our game.

About the Author(s)

Melissa Kirby


Melissa Kirby is associate general counsel at Honeywell, advising its Automation and Control Solutions business group in the Asia Pacific, sub-Saharan Africa and Middle East regions.

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