Blog

Latest Blog Posts

Get rid of your HR team

Outsource your HR needs instead!

Convincing a small to medium business (SME) to spend money is never easy!  More often than not they will look for every way possible to do it on their own until they can no longer physically get it done.  Ironically tho, SME often reap the greatest value from outsourcing expertise that is not core to their business.

Whilst I have a good handle on numbers and my P&L, the first thing I did when I started my business was bring an accountant onto my team to manage the BAS, IAS and other financial compliance and planning.  An accountant is often an easy outsourced solution for an SME, however very few look wider to outsource matters affecting the largest single cost to their business – personnel.

Savvy SME’s have looked to external expertise such as business consultants, outsourced HR or even advisory boards to provide the edge and cover any blind spots.

At the other end of the spectrum mid size businesses can get rid of their internal HR team altogether and outsourced HR.  This solution not only has significant cost savings, but also puts the accountability to add value squarely at the outsourced provider and line managers, removing the “crutch” HR can sometimes become (For a recent article on an accounting firm getting rid of their HR team click here).

Businesses that don’t have either an HR role or a current HR solution tend to find that someone else has HR as their ‘part time job’.  Is that you?  Do you manage your people on the run?  Are you sure you are meeting all your HR compliance requirements?

Looking to outsource your HR needs is a big step. The most common benefits to outsourcing HR that also support the bottom line are:

  1. Risk management – Employment laws change regularly, and it can be difficult to remain up-to-date on regulations that affect the workplace – let us keep you updated with changes that affect you and protect you from a lack of compliance.
  2. Cost savings – Outsourcing helps reduce the cost of maintaining a fully functional HR team including the office space and training costs. In addition, managing people incorrectly can be costly, and can lead to expensive legal and WorkCover issues – our advice can save you thousands alone in avoiding these costs!
  3. Efficiency – Businesses without an HR function often find it is someone else’s part time job – by outsourcing your HR to the experts it allows you to spend less time on paperwork and HR administration and more time in the business or focusing on what you are good at!
  4. Talent management – Outsourcing HR functions helps businesses better manage employee performance and development. Advising on employee performance and maximising a performance management framework helps grow and retain talent and exit safely underperforming people.
  5. External expertise – Having a different perspective or an expert to call and discuss your people matters is invaluable, especially when problems arise.  We all have blind spots, having an HR expert on your team may challenge you, and that’s a good thing!

Want to know more? Contact us to arrange a free HR audit to assess your current HR practices and the solutions required to improve business performance.

You don’t build a house without a blueprint…

So why build an organisation without one!

Last week I talked to the problems businesses can experience when their org chart isn’t based on solid organisational design. This week I promised to explain a little bit more about my four step process to build a sensible and solid organisational structure.

Step 1 – Strategy
Sounds easy right? Maybe not! It’s often tempting to jump a few steps, to build a structure around pivotal people, but organisations that have transitioned from good to great (Netflix is a great recent example) have a consistent approach of building the strategy first, and being willing to exit great people (and they do it well with a great thank-you redundancy payment) if the business is moving in a different direction.

Ask yourself the following – where is the business going in the next 12 months? Three years? Where are you competing? Where are you reducing or changing your focus? What does this mean for your customers? Products? Culture? People?

Other considerations should include your operating model/business model. One way I like to think of an operating model is if you had a set of plans for a building a house you have different blueprints for different functions (e.g. the electrician has a specific one, the builders have another, the landscape gardener has another again etc.) but you always have an overall summary plan that brings all these together – in a business you have a blueprint for an organisational structure (step 2) but you will also have technology page, a location/site page, a customer segmentation page, etc.

Step 2 – Structure
Now that you have greater clarity around your strategic focus, it is time to start thinking about the tasks, skillsets and deliverables that you are going to need. Organisation design 101 focuses on taking a holistic view of the tasks and skillsets required to deliver on an organisational strategy and translate these into structures and roles. On one side you have a sound operating model (see step 1) that helps guide the functions or divisions your business needs after which you combine these with the tasks and skillsets your business requires to build out a blueprint of the future structure, with position descriptions for the roles within the structure.

Step 3 – People
As hard as it can be, this is the first time you should start considering your people and individuals. Now that you have clarity around the functions you need and roles required this is when you go through two key steps – looking inward, which of your current people currently meet the requirements you have identified in step 2, and secondly, what roles do you not have suitable individuals currently within the business and thus you will need to recruit for.

I’ve seen this step go really badly when you don’t consider legislative implications of restructuring, redundancies, changing individual’s roles and communicating why you are doing this in the first place! Implementing a change or restructure affecting people’s roles, careers and livelihoods has implications not only for them but also for your people that stay – if you are ever going to get help from an expert, this is the step I recommend you don’t do without getting quality advice.

Step 4 – Process
Now that you have an org chart with clear roles, responsibilities and expectations, it’s time to start documenting the processes required to undertake the roles, and how all the roles connect together to deliver the outcomes you are looking for. Think of it like the instructions for building the furniture – the more senior the role, obviously the less specific the processes are, however this will enable you to de-risk the business from individuals and empower consistency amongst roles and allow you to lose an employee and be able to replace them with clear instructions for a new individual so that they can pick up the role quickly and continue without the business losing momentum.

Do you have questions or want to have a discussion around organisational structure? Don’t hesitate to give me a quick call or email! I’m passionate about helping your business get on a clear path to success.

What big business can learn from SME

Real tips for the real world

Having recently left a big business and returned to working with small to medium businesses I am reminded of several key differences between the two and strongly believe big business could benefit from taking a leaf out of the small to medium business (SME) book.

1) Do what needs to get done, not what your job description tells you to do

When you are part of an SME, and especially in the early days, everyone does what needs to get done.  As a CEO once said to me “everyone empties the dishwasher” in an SME, from the CEO down and anyone that doesn’t pitch in or doesn’t understand this is pretty quickly reminded about the office ‘way to do things’.  This is the X factor of many SMEs and why they can often grow quickly, initially, because the team understands you do whatever it takes to keep clients happy.  The reality is they have a real vested interest in growing the business because if they don’t they could be out of a job!  The same can’t be said for a big business – I often hear managers and employees alike referring to “that’s not what I was hired for” or “you need to get someone else to do that”! By the time you work out whose job it is, the SME has already got it done and moved onto the next thing on the list.  I’m not suggesting you go and step on someone else’s toes or do their job, but let’s keep it practical and if it makes sense and you can do it, just go ahead and get it done.

2) Find a way to make or get a decision

The pure bliss of an SME is the ability to make or get a decision extremely quickly – often you can walk into the office next door, pick up the phone or make the decision all on your own.  If you are a big business speak to your suppliers – your graphic designers, perhaps it’s your training providers or even your office stationary supplier and they will all groan quietly at the thought of getting a decision or a signature and often allow days if not weeks for the decision to go up and down the hierarchy.  The more sophisticated suppliers will even take the time to map out the decision makers and will implement a different strategy for each person in the organisation, all in an effort to be able to work with you!

Internally, nothing is more frustrating for employees is to wait forever for a simple decision – organisational design done right is fundamentally a mechanism to enable decision making and autonomy, without a clear structure more often than not decisions get stuck in one person’s inbox causing the organisation to stagnate rather than keep nimble and responsive.  An acquaintance of mine works for a large fast moving consumer goods company. When asked what sort of business she was in, she half-jokingly commented ‘we manufacture red tape’. Don’t let bureaucracy get in the way of good business!

3) Know your people

Granted the bigger the business the harder it is to know every person, let alone their names, their dreams or their passions, but it’s not impossible. SME teams often live in each other’s pockets such that they know what everyone had for dinner the night before and hear about every up and down in families and relationships.  However, regardless of whether you turn up every day for a job or a career, deep down every person wants or expects their manager to know a little about them, to boast about them to their boss when they do a good job or be able to hold more than a 30 second chat with them on a topic more specific than the weather!

Even if SME teams drive each crazy some days, when push comes to shove they are more likely to give that discretionary effort for each other because you have invested in getting to know them.  Nothing is more disengaging than a leader finding themselves next to a colleague at the coffee shop downstairs and being unable to acknowledge that person in a way that lets them feel like they are more than a number! If you are a leader in a big business, take the time to walk the floor, not all the time but enough that shows that you care about the people working for you and you want to take the time to care what’s important to them.

Why an org chart isn’t just a pretty picture

Make sure yours is designed to set you up for success

An organisational chart (org chart / structure) isn’t everything, but without one you could be in trouble.

If you are currently employed by Google or Apple or are a Silicon Valley start up then this article may not apply to you.  However, if you do not work in this highly creative and entrepreneurial environment I caution you trying to replicate what works for these businesses by discounting conventional wisdom regarding organisational charts and the benefits of getting this right.

Let me first clarify – an organisational structure / org chart is the blueprint of an organisation outlining reporting lines, job titles, chain of command and who is performing what function in the organisation.  Organisational design however is the plan behind the blueprint, it looks at the strategy or goals of the business, the functions and tasks required to deliver this and then sets about organising these tasks and functions into groupings that form roles, divisions and finally individuals or position descriptions to perform the roles.

I am often asked about organisational design and are sometimes challenged by leaders that don’t recognise the benefits of sound organisational design to form the blueprint of an organisation.  Instead they will try to ‘out do’ conventional wisdom and recreate an organisation in a way that is backwards, relying on individuals rather than roles and design.  An org chart that is built on sound organisational design protects the business from being reliant on individuals and can withstand the departure of a valuable employee, or is more resilient to change.

Unfortunately I rarely hear a sensible justification for an org chart without a clear organisational design behind it, more often instead I hear the following:

  1. I know better…
  2. Other CEOs can only manage normal structures, but I am better than them
  3. I don’t want to upset my team by changing the current reporting lines
  4. I started the business, I wanted to know everything and it works for everyone this way
  5. It worked where I used to work so it will work here too

So what if you have an unconventional org chart, surely it is just a piece of paper right..?  Wrong! Whilst as the leader you may be clear about how you expect things to work you are setting your team and the greater business up for no end of trouble.

Common problems I see with org charts that don’t have sound organisational design include:

  1. The business activity and work effort is occurring in one part of the business which does not align to the strategy or needs of the business
  2. Decision bottle necks – if all decisions end at you then you are creating an environment of frustration for your people and limiting your business to flex and be nimble in times of need.
  3. Lack of clarity – without a clear and logical org chart individuals attempt to fill the gaps and this will inevitably create overlap or worse gaps – your people will be confused whose responsibility decisions are and will either revert everything to you or given point 2) may not even bother asking!
  4. Lack of succession – if a star talent was to leave or if you were unable to work for a certain period without a sound org chart you are leaving your business vulnerable to being a one trick pony and not being able to survive without you – not a good thing for sustainable growth.
  5. Lack of authority – people leave if they don’t feel trusted or empowered to make decisions, it is often a deal breaker.

Here are two simple rules to keep in mind when developing your organisational design:

  1. Strategy guides Structure, this comes before People and lastly comes Process (I will expand on this in my next article)
  2. Unless your strategy specifically requires it, the ideal average reports for each person is 6 – 8.  If for no other reason, your employees expect more than a paycheck now days, and coaching and mentoring isn’t possible if you have more reports than you keep count of!