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Plan for the unexpected

Many things can and do go wrong during succession planning, but here are the top 3 we at Gibson’s see during succession planning:

  1. The owner is not mentally prepared. The mind dictates clearly that it is time to hand over, but the heart does not want to let go. It is one of the key tasks of a supporting consultant to prepare the owner for the exit. If the owner is not ready to let go, progress will slow down and can even stop, and the succession ends up in the “too hard” basket.
  2. Waiting for better times. If during the succession planning the business does not perform as hoped, progress can come to a halt. Especially if external circumstances such as market decline or currency exchange rates impact business results, companies tend to put their succession plan on hold and wait for better times.
  3. Different understandings of the same terminology. A classic example is the offer of a multiple (to the profit) for a company. For some, this means all the assets and goodwill, others understand this includes stock, work in progress, etc. The same is true if a business broker is involved: commission on sale price includes for some business brokers, also the value of the owner’s stock. It’s important to be clear about terms and meanings from the start.

You only get to exit your business once, so it pays to get it right. Most owners are very successful managers but have very little experience in selling a business. Bringing in an independent business consultant with the experience and knowledge – one who has no agenda and who doesn’t act as a business broker or legal or financial advisor – can help define the best fit succession plan for the owner and achieve the best overall result.

Your role as an owner

There’s a saying amongst business consultants that some business owners aren’t looking for a successor, they’re looking for a monument conserver!

Understandably, leaving behind the business you’ve built up through your hard work is an emotional one. You need to remember however that you’re selling the company, not yourself. When owners are having difficulty letting go, they can send conflicting signals that compromise credibility and create confusion and doubt in the minds of potential buyers.

As the current owner, ensuring your house is in order and that you, your advisers and your team are pulling in the same direction and presenting the business well, is critical.

The first step is changing the way you see yourself – no longer as an operational owner but as a managing director of a strong management team. In many companies the owner wears many hats from General Manager to CFO to Sales Manager. Although this is often for good reasons, it is a big hurdle to overcome in succession planning. The value of a business is enhanced if the owner is not required to run the business. To get your business ‘sale ready’ you need to hand over any unique knowledge, such as customer contacts, special production or product knowledge, to the team that will remain when you leave. Without this, the business is worth far less.

Often it goes ‘against the grain’ to hand over control. But when you are planning to exit your business, you need to find ways to delegate responsibility to streamline the management of the business so that you as the owner are not tied to running every major aspect of the business. For now, you might control of some critical tasks, such as hiring of new staff, sales reviews and cash flow checks, and keep sensitive information such as company profit and employee salaries to yourself. But having a strong management team in place for all day-to-day activities is much better place for a successful succession plan. After all, you will need your employees’ help to prepare the business for the transition and then to make that transition successful. And while you negotiate the sale, you need to know that the on-going management of the company is running smoothly so that no surprises crop up at a critical point in the sales process.

While there is no one-size-fits-all approach to managing the challenge of simultaneously overseeing a successful business and managing a sales process, careful preparation and ensuring you have a strong management team is vital. Employees feel empowered and informed, you are freer to focus on succession planning and the sales process, and the new owner gains a thriving business. In that scenario, everybody wins!

Timing is key

“Retirement timing is always a tricky thing. I think it’s different for everyone. How you say goodbye to the thing you have really focussed on that much is a tough one. I’ve always intended to leave in good shape, to exit on a high note”. – Damian Woetzel

Business owners will inevitably move on from their business, yet the data shows that succession planning is typically last on their list of priorities. Business leaders are usually focused on building the business, and don’t like to think about the day they will leave it behind. But the reality is that planning for the sale or succession of your business is one of the most important decisions you can consider, and that proper succession planning will deliver the optimum results for you, your employees and the new owner.

To understand basis for succession planning, take yourself forward in time and imagine what you want to put on the table for potential buyers. You want to show them:

  • A successful business with a steady sales growth over the last 3 years
  • A stable management team which has demonstrated their management skills over many years
  •  A stable cash flow over the last 3 years, and a strong financial position
  • A predictable future income for the business, ideally supported by long term contracts
  • No legal disputes
  • A stable and engaged work force
  • A very presentable premises with well-maintained assets
  • A managed business that does not rely on the current owner for its success.

When a business can tick all these boxes, a succession plan can be implemented quickly, but unfortunately this is not often the case. This timing can make an enormous difference in what you take away from the closing table.

Succession planning should ideally start more than five years ahead of the business sale, with more detailed planning over the three years before the planned exit. If your circumstances allow you proper time to plan, you will be able to turn your attention to critical issues that need to be addressed before the sale. Depending on the business these types of issues might be:

  • The owner is heavily involved in operations. When they leave, production, sales or other areas will struggle.
  • The product portfolio is at the end of its life cycle or under threat of cheaper Asian imports.
  • Other key members of the management team will also leave once the owner leaves, and the business depends heavily on single individuals because of their knowledge or skills.
  • The company has no sales plan and a very unstable sales history

Within a reasonable timeframe, most issues are fixable – although one of our Gibsons Consultants fondly remembers a client who stated “I am 73 years old and want to get out of the business by the end of the year”.  Succession planning in this environment is obviously challenging and reduces the options on the table. In succession planning, timing is everything!

 

The key to successful succession planning

Whether or not you like to think about it, it’s inevitable that one day you’ll leave your business. It may be that you decide to sell up and enjoy the fruits of your labour in retirement, or you have to exit the business due to health reasons. Whether today or far in the future, the time will come when you, as a business owner, have to answer: Who will continue to run my business?

The key to successful succession planning is to ensure you are not asking this question too late! Leaving it until you have reached an age where you are no longer healthy enough to work, or when the enthusiasm that drove your business to success has disappeared, will devalue your business.

You could decide, or need, to sell at any point in time – but it takes time to have the business in a state to maximise the sale value. The reality is that planning for the sale or succession of your business is one of the most important decisions you can consider, and that proper succession planning will deliver the optimum results for you, your employees and the new owner.

Succession planning has a time horizon for the next ten years and allows you to plan ahead all the necessary changes for an optimal handover. A succession plan answers two basic questions:

  • Who will own the company in the future?
  • Who will run the company in the future?

For many SMEs, the owner is heavily involved in the daily business, so essentially the owner and the managing director are the same person. A Succession Plan might split these two roles, with a potential scenario being that the owner first steps back from operations while remaining the owner, and a certain amount of time, transfers the ownership.

But first, the current owner has to answer some fundamental questions:

 

1. What is my target for the transition?

  • Maximum upfront money
  • Legacy for my family
  • Protection of my brand name
  • Shortest transition period
  • Job security for my staff
  • Monthly income for the retirement

2. How much do I want to be involved after the transition?

  • A day or two per week
  • Consult to the business for some years
  • Bye, gone fishing

3. When do I want to step out?

  • Next 3 to 5 years: Plenty of time to make the company really attractive, optimise the product portfolio, clean up structure, train internally or hire required key positions
  • Next 2 to 3 years: Sleeves up, clean up fast, fix broken processes, prepare accounting
  • Less than 2 years: Doable, but no time to waste. Some transition models might be already gone, avoid a simple fire sale

The answers to these questions will guide your timeframes and approach.  It’s all about having choices. If you have a plan or strategy in place, then you can choose what you really want to do, at the time when you want to do it. And isn’t that what success is all about?

 

Engage Your Staff and Improve Your Bottom Line

Organisational leaders who exhibit a committed focus to people practices not only increase their chances of having a more engaged workforce but can also drive profit growth.

Recent studies by Real World Group and others have found that organisations with a highly engaged workforce have significantly better profit growth than those that do not.

There is no doubt that there is a high correlation between profit growth and employee engagement.

What do we mean by employee engagement?

Some people see it as being ‘job satisfaction’ but this can be a transactional relationship that is only as good as the organisation’s last round of perks or bonuses. Other people gauge employee engagement by employees’ emotional commitment to their organisation. While this is an important element it is only part of the engagement equation.

From our extensive experience in business consulting and human resource management, we take the view that employee engagement focuses on the:

  • Contribution of individuals to the organisation’s success
  • Personal satisfaction of individuals in their role.

We believe that aligning employees’ values, goals, and aspirations with those of the organisation is the best method for delivering the sustainable employee engagement required for an organisation to thrive and increase profits.

Full employee engagement represents an alignment of:

  • maximum job satisfaction – “I like my work and do it well”, with
  • maximum contribution – “I help achieve the goals of the organisation”.

Leadership commitment is one of the key features of organisations that rank highly in relation to employee engagement and effective human resource practices.

There is a very strong correlation between leadership commitment and employee engagement.

While the need to build employee engagement within a workforce may seem clearly obvious to many employers and HR managers, some businesses still fail to understand the importance of effective human resource practices to develop and engage your people.

While leadership commitment needs to come from the top of the organisation it is important to understand the key role played by line managers who are critical to the building and maintaining of high employee engagement.

Building employee engagement includes:

  • Recruiting staff who are aligned with the organisation’s values
  • Promoting flexible workplace options for employees
  • Creating succession plans for key staff
  • Providing opportunities for continued employee growth

It requires managers to build their leadership skills and not just focus on their management skills and theories of human resource management.

Practical steps you can take to help encourage higher levels of employee engagement:

  1. Set a positive tone of partnership. This is not a performance appraisal (not that we are suggesting performance appraisals should be adversarial).
  2. Talk about the importance of the employee’s job and how it fits with the organisation’s larger goals.
  3. Discuss your employee’s top priorities. Many managers find gaps in perception which can have a negative impact on engagement.
  4. Ask ‘What support do you need from me?’ and ‘What kind of feedback is most useful to you?’
  5. Talk about ways to use the employee’s talents (the ones that this person enjoys using).
  6. Ask about job conditions: What gets in the way of great accomplishments? What gets in the way of a great day at work? What does the employee enjoy most?
  7. Discuss how you work together. It is not enough to agree you should meet regularly. Clarify what that term means to you both.
  8. Agree to meet again. You can’t have one discussion and check off the box that you have addressed your employee’s engagement successfully. Engagement levels are dynamic. Things change. The conversation lays a foundation for specific HR-related discussions about performance, development, or career management. It also establishes a common language you can use to check in quickly – and regularly – about engagement issues.

Employee engagement is an integral part of managing the human resources in your business which can transform unknown ‘resources’ into people who will engage with their work, engage with your business and drive profit growth.

 

The Importance of Cultural Resilience in a Downturn

If there is one thing that companies learn in an economic downturn, it is the importance of resilience – the ability of an organisation to withstand shocks and remain sustainable under prolonged periods of duress.

The most resilient companies display the following characteristics:

  • A high level of staff engagement
  • A low level of cultural entropy
  • A vision of the future shared by all employees
  • A set of values shared by all employees
  • A focus on adaptability and innovation

Not only do these qualities create resilience, they also lead to internal cohesion, a key component in building a strong internal community that can drive the goals and performance of the organisation. The current economic climate shows us that organisations that are strong on the inside are also strong on the outside.

Being strong on the inside means having a values-driven culture, a highly aligned, cohesive and effective leadership team, a low level of cultural entropy, and a high level of staff engagement. It means effective human resource management practices / people management to develop your people and develop leadership.

Cultural entropy is the degree of dysfunction in an organisation. It is the amount of energy consumed in unproductive work and is therefore unavailable for useful work. Cultural entropy arises from the presence of limiting values such as bureaucracy, internal competition, blame and fire fighting rather than an environment of promoting positive values.

The experience of our business consultants shows that low levels of cultural entropy are accompanied by high levels of financial performance and high staff engagement. Companies with these attributes are able to grow their incomes significantly faster than companies with high entropy.

The following checklist of actions will help you to build your organisation’s resilience, support you in traversing economic downturns, and place you in a strong position for success when growth rates pick up.

This checklist is based on the core principles of a ‘values’ driven organisational culture. Each of the six items on the checklist represents a critical step in building a sustainable organisation.

How to build your organisation’s resilience:

Step One: Be clear on your direction. Re-energise your vision, mission and values to build internal cohesion.

Step Two: Communicate with staff and customers: confidence is important. Ensure everyone knows what you are doing to get through when times are tough.

Step Three: Focus on your core business. Get lean. Streamline your systems and processes to reduce costs and increase agility.

Step Four: Learn to adapt to a changing environment. Eliminate activities that don’t add value.

Step Five: Build strategic alliances. Align with your customers and suppliers to create mutually supportive and beneficial relationships.

Step Six: Keep the long term in mind. Ensure your short-term plans do not compromise your long-term viability.

It all sounds fairly basic, but remember that successful organisations – both in boom times and downturns – are generally those that harness positive energy to consistently do the basics well. That includes consistent and effective human resource practices that develop and support staff and leadership to build and maintain a culture of resilience in your business.

 

 

Running an Effective Toolbox Meeting – Part 3

To finish off our ‘Running an Effective Toolbox Meeting’ series, we provide some practical tips and ground rules to keep in mind when conducting a toolbox meeting.

With a little preparation, the right attitude, a simple process to follow and a bit of practice, business managers/supervisors can run effective toolbox meetings that produce useful results, engage employees, facilitate human resource management and assist in your day-to-day business operations.

1. Knowing How to Do it

Most people don’t enjoy speaking in public (remember the wedding speech) and this shows. However, you can learn how to run good toolbox meetings, because like a lot of other things, it is mostly experience and knowing a few ‘tricks of the trade’.

Here are a few tips, and after some practice you can get over being nervous, relax a little and run a really effective toolbox meeting.

Preparation
  • Don’t try to run a toolbox meeting with too many people.
  • Preparation is critical so make sure you set aside preparation time.
  • Employees won’t remember a lot of detail so pick out the important things.
  • Carefully think out just what it is you want to say, and sound confident.
Presentation, attitude and body language
  • Remember people can talk faster than they can listen, so don’t go too fast.
  • 85% of all communication is non-verbal, so watch the body language.
  • Don’t put yourself down by pretending you haven’t got anything important to say.
  • Position yourself so you can see everyone and they can see you.
  • Look them in the eye and make them listen to you.
  • Use some notes to make sure you don’t forget things.
  • Don’t be too self-conscious for no one will be as critical of you as you are of yourself.
  • Remember, you have called this meeting and it is very important to everyone.
Produce useful results
  • Ask open questions that will encourage people to speak up.
  • Don’t get defensive when people ask hard questions, or criticise you or the company.
  • Don’t get sucked into arguments in the toolbox meeting in front of all the others – take individual gripes offline and handle one-on-one.
  • The first couple of toolbox meetings might be ‘bitch’ sessions but persevere.
  • Don’t try to cover too much in each meeting and put a time limit on the meeting.
  • Make sure you keep notes of what has been done – this is particularly important in relation to discussion about and initiatives taken on safety. (Refer to the meeting template below.)

2. Are Employees Really Interested in Toolbox Meetings?

Yes they can be, but they don’t like boring meetings that waste their time and don’t tell them anything about how they are doing at work, what might be happening to their job and what their prospects are for earnings, promotions, training etc.

 

Where supervisors have persevered with toolbox meetings, they have quickly found that their employees, the company and the supervisors are better off as a consequence of being involved in toolbox meetings.

3. Some Basic Ground Rules for a Toolbox Meeting

  • One speaker at a time – be an active listener
  • No personal attacks/comments
  • Everyone participates, no one dominates
  • Work to understand each other’s view as well as communicating your own view to the group
  • Keep an open mind
  • Work together for solutions and agree to the action plan
  • Keep a record of the meeting (the toolbox meeting template can help you with this).

To help keep your toolbox meetings on track and to assist you to record important information from your meeting, download our Toolbox Meeting Template.

Try out these simple toolbox meetings in your business and keep an eye out for the positive results that will follow.

And if you need advice or assistance with any HR / people management issues or in managing your day-to-day business operations, talk to an experienced business consultant.

 

Running an Effective Toolbox Meeting – Part 1

1. What are Toolbox Meetings?

A few supervisors and managers have been holding successful toolbox meetings for many years, but now the secret is out. The reality is that they are easy to run and do produce very good results on a regular basis.

How do Toolbox Meetings work?

The supervisor merely sits down somewhere at work (perhaps on the toolbox, hence the name) and talks over work related issues with his or her employees. This also allows workers to tell the supervisor what is really going on with the job, resulting in a two-way communication flow. This is an informal process and therefore has advantages over more formal meetings where people often feel uncomfortable or don’t think the meeting has much to do with them.

Research shows that business performance increases significantly when people are engaged so it is important to find effective ways to pass on information to employees and receive information back from staff – and toolbox meetings can be the answer.

2. Why are Toolbox Meetings so Important?

  1. Toolbox meetings allow for two things which are quite critical to successful business operations and effective human resource management and employee engagement:
    • They are the best way to give employees more information about the business, about what changes are occurring, how they are doing, what is going right, what is going wrong – both at the broader level and most importantly, at the local level. They can help you manage your human resources.
    • They are often the best way for management and supervisors to tap into the most precious information which employees have and which they are usually willing to share if only we ask them in the right way. All of us understand that the person doing the job knows just what is going wrong and what can be done to improve things and toolbox meetings can be the way to gather this information. Increased employee engagement leads to better business performance.
  2. Toolbox meetings are also important because we now have the evidence that employees are interested in what is happening to the business they work in. That should be no surprise, but somehow it often is. Employees are interested in information about their jobs, changes that are going on locally, how they are doing, their own prospects for promotion, what training is available and so on. Most importantly, they want to hear about all of this from the person they would like to believe before anyone else – their immediate supervisor.

Employees are interested in what is happening to the business they work in and in information about their jobs

3. The Nuts and Bolts of Toolbox Meetings

Over the years, a lot of supervisors have tried ‘having a meeting’ with their employees and many times these have been quite disastrous. Usually, this has been because the nuts and bolts have not been right. In particular, there are four things which have often gone wrong:

  1. They have been held in the wrong place at the wrong time.
  2. The supervisor did not have anything important to say and probably didn’t want to hold the meeting in the first place and that quickly shows.
  3. The supervisor didn’t know how to run the meeting and it became an embarrassing shambles.
  4. The employees had been through these sorts of meetings before and thought they were a waste of time. They had offered ideas before but nothing happened, so they figured why bother?

For more on Toolbox meetings and how to tighten those loose nuts and bolts and avoid disastrous or simply ineffective meetings, look out for Running an Effective Toolbox Meeting – Part 2.

 

Employer of Choice – Becoming a Learning Organisation

Business Success: The Human Factor (Part 6 of 6)

Is your business successful and profitable?

Are your people productive? Are your employees costing you money?

If you missed the earlier parts of our Employer of Choice series, you may wish to start with: ‘Become an Employer of Choice’.

Our people management series kicks off by looking at the various human resource management issues consistently found in the SME sector that worry business owners. It then covers Effective Staff Selection, Induction, Performance Management, and Employee Exit Procedures.

Subsequent articles discuss Effective Communication, Meetings, and Goal Setting and Feedback; then Rewards and Recognition; Selling the Value to Employees; and Building Leadership and Succession into your Business.

One of the keys to business success is employee engagement and alignment.

Staff Engagement = Motivation = Performance = Productivity = Profitability

What other human resource management strategies can you use to ensure your business becomes an employer of choice?

Become a Learning Organisation:

Monitoring, Measuring, Understanding and Working on Your People and Your Business

Understanding Your Organisation – Monitoring and Evaluating Success

There are many tools that enable you to see deep into your organisation. In skilled hands a range of these diagnostic tools provides an objective window into the human health of your organisation. There are clear steps to this very fundamental process:

  • Regularly assess the key barometers of human success
  • Review and understand the key drivers
  • Objectively measure and analyse those drivers
  • Review the results in a team environment
  • Develop a course of action to improve and and/or maintain a strong human culture within your business

Then, TAKE ACTION.

Act on what you see and understand by implementing actions that continue to build and maintain strong engagement and alignment, the essence of a strong team.

You can then fine tune and continually learn how to improve employee engagement and alignment and ultimately the human and business health of your organisation.

Human health does not eventuate via a once off feel good employee survey. It is a continuous process.

Become a learning organisation. And become an Employer of Choice.

Sound simple? Yet in the current business environment where sourcing and retaining the right people is so difficult, managers and supervisors all too often don’t apply these basic human resource management principles.

VERY IMPORTANTIt is never too late to act.

You’ll be amazed at the results if you do apply these basic principles. And if you need advice or assistance with people management issues or business planning, talk to an experienced business consultant.

 

Employer of Choice – Building Leadership and Succession into Your Business

Business Success: The Human Factor (Part 5 of 6)

If you missed the introduction to this people management series, how about starting with: ‘Become an Employer of Choice’.

Our Employer of Choice series starts with a look at the various human resource management issues consistently found in the SME sector that worry business owners, and then covers Effective Staff Selection, Induction, Performance Management, and Employee Exit Procedures.

Subsequent articles discuss Effective Communication, Meetings, and Goal Setting and Feedback; then Rewards and Recognition; and Selling the Value to Employees.

Staff Engagement = Motivation = Performance = Productivity = Profitability

Building Leadership and Succession into Your Business

Knowledge, Skills and Attribute Development – Set your people up for success

Stage 1 – Build success in your team in their current roles

  • Understand and establish role criteria – What defines success for each role in your business?
  • Knowledge – What are the knowledge requirements for each role within your organisation?
  • Skills – What are the skill requirements for each role within your organisation?
  • Attributes – What are the key attributes, qualities or values required for each role within your organisation?

Define and document each role in the organisation clearly and thoroughly to provide a blueprint for success.

  • Assess your team against their roles – How well do they meet the criteria for their respective roles in your organisation?

Assessments often reveal human weaknesses in your organisation which may require difficult decisions to be made. For example, there may be a need for an organisational restructure.

  • Take ACTION
Human Resource Case Study: Assessment of suitability of employees for their role

For an SME that Gibsons Business Consulting recently provided human resource management consulting services, using the above process it was found that 14 out of 26 key people employed in the business were deemed not suitable for their roles.

The result:

  • Some staff moved on,
  • Some staff changed roles, and
  • Some staff stepped up and met their role criteria.

The bottom line is that all of the employees of this business now meet the criteria set for their role, and business performance has improved measurably as a result.

For those employees who stepped up with the aim to meeting their role criteria, the following human resources management approach was undertaken:

  • Train staff where their knowledge or skills do not meet the criteria for their role.
  • Mentor staff where their attributes are inconsistent with the criteria for the role.
  • Revise or change role definition while the development process takes place to allow time for staff to transition effectively into their new role.
  • Regularly review staff against the criteria set for their role and provide feedback supported by action and support.

The above human resources management approach should be followed for every role in your organisation to ensure every member of your team meets her or his role criteria. This is the blueprint for individual, team and ultimately, business success.

Stage 2 – Build succession in your team in their future roles – become a learning organisation

These assessments become the blueprints for future leaders. Rising stars become obvious through this process as does their development into their next career move. Actions can be taken well in advance to train and mentor people into their next career move before it happens. Intentional leadership development and succession planning as part of your human resource management and business planning sets the business and staff up for ongoing future success and development.

Your employees will thank you for it and you will not only build a strong team, you will create the basis for true succession in your business by developing your future leaders in a dynamic and pro-active way.

Sound simple? Yet in the current business environment where sourcing and retaining the right people is so difficult, managers and supervisors all too often don’t apply these basic human resource management principles.

It is never too late to act.

You’ll be amazed at the results if you do apply these basic principles. And if you need a hand with any people management issues or human resource management initiatives, talk to an experienced business consultant.

The next blog and final blog in this series is ‘Employer of Choice – Becoming a Learning Organisation‘.

Employer of Choice – Selling the Value to Employees

Business Success: The Human Factor (Part 4 of 6)

Is your business successful and profitable?

Are your people productive? Are your employees costing you money?

If you missed the beginning of this people management series, you may like to start with: ‘Become an Employer of Choice’.

This first article in this series builds the foundations to becoming an employer of choice by looking at the various human resource management issues consistently found in the SME sector that worry business owners; and then covers Effective Staff Selection, Induction, Performance Management, and Employee Exit Procedures.

The others articles discuss Effective Communication, Meetings, and Goal Setting and Feedback; and Rewards and Recognition to engage and align staff.

One of the keys to business success is employee engagement and alignment.

Staff Engagement = Motivation = Performance = Productivity = Profitability

Why would someone want to work for your business?

Why would an employee or prospective employee consider you to be an employer of choice?

Selling the Value to Your Employees

Employees’ Value Proposition – Understanding and Respecting the Individual’s Path to Success

Selling Products and Services to current and prospective customers is all about understanding the Value Proposition of those customers. When we know what represents value to our customers then we can develop clear sales and marketing plans built around communicating and delivering that value to them.

Not only do we need to communicate that value to customers, we also need to communicate that value to employees.

One of the keys to attracting and retaining quality staff is based around understanding their Value Proposition, that is, understanding what drives your current and prospective employees to want to work for you.

The key first step is to Understand the Employees Value Proposition. What are the key factors that your employees use to determine the value in working for you?

VERY IMPORTANT: if you don’t know the key factors behind your employees’ value proposition then find out.

Then, build the right messages into your communication processes in all areas of your human resource management:

  • Recruitment and Selection
  • Induction
  • Performance Management
  • Skills Development and
  • Rewards and Recognition.

Remember, you must communicate that value to current employees as well as to prospective employees.

So, train your Managers and Supervisors to do it right. Then, sell it to current and prospective employees, and not only once – over and over again – and keep reviewing and refining the message because the Value Proposition will change over time.

It is never too late to act.

The next blog in this series is ‘Employer of Choice – Building Leadership and Succession into Your Business‘.

Employer of Choice – Rewards and Recognition

Business Success: The Human Factor (Part 3 of 6)

If you missed part 1 of this people management series, you may like to start with: ‘Become an Employer of Choice’.

The first two articles in our series build the foundations to becoming an employer of choice. Part 1 looks at the various human resource management issues that worry SME business owners; and covers Effective Staff Selection, Induction, Performance Management, and Employee Exit Procedures. Part 2 discusses Effective Communication, Meetings, and Goal Setting and Feedback.

One of the keys to business success is employee engagement and alignment.

Staff Engagement = Motivation = Performance = Productivity = Profitability

What other human resource management strategies can you use to ensure your business becomes an employer of choice?

Rewards and Recognition

Rewards and Recognition – Value the Individual’s Contribution to Team Success

Reward and recognise positive performance by employees. The term ‘reward’ will often bring to mind the idea of a financial bonus and, yes, no doubt monetary rewards would be welcomed by your employees but remember there are many ways to reward staff without paying them more money:

  • Up-to-date tools and equipment, for example, software
  • Office facilities and décor
  • Flexible salary packaging
  • Flexible hours
  • Celebrating business success, and
  • Recognition!!

A regular audit of the tools, equipment, workstations, software, computer equipment, office décor, factory layout, safety and cleanliness is strongly recommended for every business to assess the workplace in terms of what it offers its employees. All too often this is overlooked and can become significant in how the employee views you as an employer.

Flexibility in hours and location also provides a positive environment for staff.

Business success should be celebrated with the team in various ways. Success breeds a positive environment in which to work.

Recognition is often forgotten in workplaces today. Personal feedback is built into the performance management framework above. However, other more personal and public forms of feedback or recognition should be utilised in the workplace to acknowledge and affirm employee performance and ultimately build powerful staff loyalty. This is a powerful lever for engaging and aligning staff in the workplace.

Sound simple? Yet in the current business environment where sourcing and retaining the right people is so difficult, managers and supervisors all too often don’t apply these basic human resource management principles.

REMEMBER, it is never too late to act.

The next blog in this series is ‘Employer of Choice – Selling the Value to Employees‘.

Employer of Choice – Expanding on the Basics

Business Success: The Human Factor (Part 2 of 6)

If you missed part 1 of this people management series, you may like to start with: ‘Become an Employer of Choice’.

The various human resource management issues detailed in part 1 of our HRM series for employers are consistently found throughout businesses in the Small to Medium Enterprise (SME) sector. Business owners are rightly concerned about the impacts upon their business as they are very serious.

One of the keys to business success is employee engagement and alignment.

Staff Engagement = Motivation = Performance = Productivity = Profitability

EMPLOYER OF CHOICE – Expanding on the Basics

An Employer of Choice is an organisation that outperforms its competitors in attracting, developing and retaining talent through innovative human resource management initiatives.

As noted in the previous article, the foundations to becoming an employer of choice are Effective Staff Selection, Induction, Performance Management, and Employee Exit Procedures. But, there is much more!

The Second Step – Expanding on the Basics

Effective Communications – Create Pathways to Success

Good communication creates engaged and aligned employees who work effectively and efficiently together. The human resource management processes listed above (and described in part 1 of this series) provide a framework of communication between the manager and his or her team, so necessary for human success in any business. However, communication can’t stop there.

Effective Meetings – Aligning Individuals and Teams

Meetings can burn resources and waste money like nothing else on planet Earth. Managed well, they can be very effective.

  • Meetings must have a clear purpose that is clearly understood.
  • Meetings must be two-way, everyone has input.
  • Meetings must be effective and professionally run:
    • Set agenda.
    • Minutes taken and reviewed.
    • Meeting chaired.
  • Meetings must have accountable outcomes where action results.

If a meeting fulfils the above criteria, it can serve a practical purpose and engage and align staff in the process. They can also strengthen and build relationships within teams and across teams.

Meetings are necessary for a number of reasons:

  • Toolbox/Team Meetings to mutually understand and address team issues.
  • Safety/Environmental/Quality Meetings to mutually understand and address safety, environmental and quality issues.
  • Interdepartmental Meetings to mutually understand and address interdepartmental issues.
  • Vision meetings where the company vison is shared with staff.
  • Sales Meetings to review and strategise business development.
  • Management Meetings to review performance and strategise and implement the strategic direction of the business.

Meetings are an essential and effective way to communicate and ensure that teams are engaged and aligned in specific areas of the business which are relevant to individual and team roles in the organisation.

Effective Day-to-Day Goal Setting and Feedback – Fine Tuning for Success

Performance Management in human resource management provides a framework for managing goals and expectations based around personal objectives of employees and business objectives. However, business is dynamic and ever changing. Supervisors and managers must practice setting, reinforcing and correcting performance to short-term objectives to reinforce and/or modify behaviour and consistently develop individual and team performance. These simple people management skills applied diligently, skillfully and consistently, will help build high performance teams in your business.

Sound simple? Yet in the current business environment where sourcing and retaining the right people is so difficult, managers and supervisors all too often don’t apply these basic human resource management principles.

You’ll be amazed at the results if you do apply these basic principles. And if you need a hand, talk to an experienced business consultant.

The next blog in this series is ‘Employer of Choice – Rewards and Recognition‘.

Become an Employer of Choice

Business Success: The Human Factor (Part 1 of 6)

Is your business successful and profitable?

Are your people productive? Or are they costing you money?

One of the keys to business success is employee engagement and alignment.

Engagement = Motivation = Performance = Productivity = Profitability

The Human Issue

Human resource management issues are consistently found throughout businesses in the Small to Medium Enterprise (SME) sector. Owners are worried about, even afraid of, the impacts upon their business. The signs are always there and, in many cases, the impacts upon the business are very serious.

What are the signs that point to possible people issues or human resource management issues?

Business owners or managers will often make statements like:

  • If only my staff would do their job.
  • I need to manage tasks; otherwise I get problems.
  • If I don’t do it, it doesn’t get done properly.
  • If only they cared as much as I do.

Staff, meanwhile, often make statements like:

  • I am not happy working here. They don’t care about me.
  • This could be a great place to work, if only management would listen.
  • I don’t understand what is required of me.
  • I want to work in a dynamic team environment.

All too often these statements, and others unspoken, never get addressed, with inevitable results:

  • Overworked owners and managers
  • Disengaged and unproductive staff
  • Good staff leave and poor staff stay

This leads to serious issues within the business:

  • Poor customer service
  • Poor quality products and services
  • Safety issues and incidents
  • Unhappy customers
  • Poor sales
  • Unproductive staff
  • Waste across all areas of the business
  • Conflict in the workplace
  • Poor profit performance
  • And, at worst, business failure.

But it is never too late to act.

BECOME AN EMPLOYER OF CHOICE

An Employer of Choice is an organisation that outperforms its competitors in attracting, developing and retaining talent through innovative human resource management initiatives.

This is more than just creating an attractive place for employees to work, it needs to be an integral part of the corporate strategy that can result in a higher level of performance and productivity in the workplace, greater stability, stronger customer loyalty, high employee satisfaction and loyalty and ultimately, higher profits.
The key question is HOW?

The first step is to implement effective human resource systems and processes in your business.

Effective Selection – The Raw Material for Success

Set the core values and behaviours that you expect in your employees, and the core skills, the must haves, for each role. Develop recruiting standards based around those core skills, core values and behaviours. Then develop recruiting processes that ensure you bring people into your business people who reflect those core values and possess the necessary core skills. Use interview techniques and adhere to an unrelenting policy that you will not hire anyone who does not possess your core values or the necessary core skills.

Effective Induction – Start the Journey to Success

Induction is not just about Health and Safety briefings and introductions. It is also important to set the tone for the new employee and develop induction processes that ensure new staff understand your business, your expectations of them and that they feel a part of your team. Defining roles and responsibilities and building expectations within a role is often forgotten as new staff enter your business. This is pivotal to setting standards and activities for every new employee in your business.

Effective Performance Management – Maintain the Journey to Success

Invest in an effective Performance Management System and ensure your employees are clear about what is expected of them. Link your expectations to the goals and objectives in your business plan to make your business vision more relevant to your people and help them understand why it is important, and keep everyone accountable to those goals and objectives. Review performance against these agreed objectives and revise these objectives regularly. This process provides a two-way feedback framework for every employee and ensures that issues and resources are reviewed and addressed and each staff member is engaged and aligned by positive interaction with his/her manager or supervisor.

The techniques are simple but very effective and, remember, great people love performance management processes. They provide focus and feedback which engages your employees and aligns their performance to business objectives. Great people will thrive in that sort of environment.

Effective Exit Procedures – Refine the Path to Success and Become a Learning Organisation

Constructive feedback from exit interviews can clearly define any problems that you face in attracting and retaining the right people. Effective exit processes are essential to learning how to improve the management of your most important resource – your human resources, your people. If people leave then find out why and act to improve the organisation from the knowledge you gain from the process. This is the essence of a learning organisation.

Skills Development and Training – Provide the Tools for Success

Skills are an integral part of any role within your business. Unfortunately, skills are not always defined clearly for each role within the business. Defining and then assessing skills regularly with each employee provides a framework for the business to evaluate skill needs across the business, within departments and importantly for each individual. This provides the structure to build people development into the business culture and engages staff with a commitment to developing their skill levels with obvious improvements in business performance emanating from that process. Of course, for this to be successful, there must be a commitment to staff training.

Sound simple? Yet in the current business environment where sourcing and retaining the right people is so difficult businesses all too often don’t apply these basic human resource management principles.

You’ll be amazed at the results if you do apply these basic principles. And if you need a hand, talk to an experienced business consultant.

The next blog in this series is ‘Employer of Choice – Expanding on the Basics‘.

The Value of Mentoring

How do you know you are doing well in your role? How do you know you are leading and managing your business in the best possible way to achieve your goals? Who do you turn to when you are having trouble making a decision or don’t know how to solve a problem?

If major problems arise in your business that you cannot address on your own, or you wish to take your business in a new direction and need a hand then consider seeking out the management expertise of business consultant. But what about the day-to-day issues of leading and managing, who do you turn to?

For many managers, and especially the business owners, the answer is normally no one. You forge ahead doing the best you can with the information, experience and know how you have. Again, we go back to those questions above. How do you know you’ve made the right decision for the best result?

Investing in the development of your employees and yourself is beneficial for both the individual and the organisation. One of the simplest methods to provide employee development is through the concept of mentoring. Mentoring can be both formal and informal and is often a learning exercise for both the mentor and mentee.

Investing in the development of your employees and yourself is beneficial for both the individual and the organisation.

Could mentoring have a place in the human resource management of your business?

The process of mentoring usually involves a more experienced person discussing issues and circumstances with a less experienced person to help them find techniques and practices to address their problems and opportunities. The caveat is that the mentor does not ‘tell’ the mentee what they should do. Instead, the mentor asks the mentee the right questions to enable them to find the answers or remedies themselves to successfully address the problems they may be facing, thus increasing knowledge and confidence.

In essence, a successful mentoring relationship is based upon trust and the understanding that the mentor will support the mentee whilst also challenging the mentee to learn and grow. The mentor shares with the mentee their experiences and know how for the purpose of this growth.

Now, if you don’t have a mentor, is it time for you to find one?