One of the biggest constraints on the growth of a business is the lack of support for managers. As businesses grow, meeting the challenge of having the right data, and expertise to collect and interpret it, becomes a critical success factor.
For small and micro-businesses, the administration support tends to be highly compliance focused. At this stage, it is about minimising the risks of not meeting compliance obligations; usually in areas such as taxes, licenses, and contracts. For example, to reduce compliance risks the business will usually engage a bookkeeper, and put in place an accounting and payroll system. Or they may engage experts and put in place systems for project management and/or CRM.
These technicians, and their systems, then get the business through to the next stage of growth. They become valued partners as they add efficiency and instil structured ways of working that enable operational capability and capacity. Without them, the business would stagnate and struggle under the weight of regulatory burden, operational inefficiency, and the inability to consistently deliver for their customers.
These technicians and their systems are like the morning coffee. They kick things off and provide the quantitative business data for dealing with the issues of compliance, operational capability, and business efficiency. This is data such as financial, sales, production, and capacity information.
As the business grows there becomes a need for more management capability. This happens because with more customers comes the need for more people, and with more people comes the need for more managers. The business needs a different type of data, and a new system for obtaining and using it.
Despite everyone's best intentions, with more people the business naturally experiences the challenges of maintaining its productive culture, instilling consistent management decision processes, and continuing its growth.
One of the most critical success factors for growth, is how well the business transitions the administration effort and focus from compliance to supporting managers in driving the productive behaviours in the business that generate profitability. This requires a system for qualitative data - so that managers can have consistent information about the human qualities that are driving business performance.
Businesses often invest heavily into their quantitative data systems, but they often over-look their systems for gathering consistent qualitative data. This data is often more difficult to systemise as it's responses to open questions, and it's words rather than numbers.
Qualitative data provides far better information about the barriers to human performance. For example, quantitative data can provide managers with information that shows the need for changing something, but qualititative data gives the information that drives the behaviour to achieve that change.
To achieve the next phase of growth, the data system in the business needs to provide a sound process for gathering and using qualitative information. This supports decision making, enables management consistency, and drives productivity. It is like giving the business its second cup of coffee every day, as it drives the business energy towards removing the barriers that are preventing sustainable performance.
Our question to you, Change Agents is: Are the systems in your business only focused on quantitative data, and what process are you instilling for enhancing the human experience - the qualitative experience - in your organisations to achieve growth, sustainability, and ultimately, your purpose?
2020 Vision. It is about clarity and sharpness. In small business, we know that success comes from the clarity of business objectives. When leaders can share their vision and the things that are needed to achieve it, then it leads to contribution, engagement, and achievement.
H Agents are making 2020 the year of business clarity. For our clients, we want 2020 to be the year they progress:
We have always encouraged business owners to have clarity and focus on their desired business outcomes, so last year we integrated our business planning tool - the Proceed With Purpose Plan - into The H Factor system. We became the only online people management system with a built in, structured, and integrated, business planning tool. It enables you to define, articulate, and share your business goals, and then link those goals to specific teams, actions, and people. The system enables your team to build your business with you; as you establish clarity of objectives, set priorities, decide on actions, and enable accountability.
So we want to share our purpose and encourage business owners to join us on #2020operationclarity. Everyone has the right to create the extraordinary, and share the joy of contribution. It starts with clarity and there is no better time to give your business 2020 vision.
The way we work is changing, and with that we need to change the way we talk about the role of a leader. The way teams are organised, work is allocated, and people are employed has changed, but the way we talk about leaders hasn't.
The way work is changing has, in some ways, been hiding in plain sight. At The H Factor, we work from a co-working space - that's our office in the picture above. We're part of a community with hundreds of other members, most of whom are independent small and micro businesses. The building used to be the Perth office of the Reserve Bank of Australia - all 9 floors of it.
Another co-working space recently opened up with 7 floors in Perth's tallest building. These buildings were once the domain of some of society's biggest corporate and government institutions. As those institutions have downsized, centralised, automated, or even completely disappeared in some cases, then the spaces that were once symbols of their strength have become a refreshing symbol of the changing way we work. Some of those large institutions themselves now have people working from such co-working spaces.
The office towers might look the same from the street level, but inside them a quiet revolution has taken place. Co-working is just one example of how work is changing. People also work from home, from their smart-phones, and over the Internet.
There's also the sharing economy where the traditional classification of employer and employee is complicated. As well, many professional roles are now carried out on a contract basis, rather than in the conventional permanent employer/employee relationship.
There is a common thread to all of these changes.
Organisations are seeking ways of working that encourage greater alignment of behaviours and interactions to their business outcomes.
At the same time, people have greater expectations of their work being meaningfully aligned to their own conscience with regards to ethical, social, and cultural issues.
These changes are not so much about what people do, but are more about how people are allocated their activities, collaborate with others, and deliver their outcomes. People have greater capacity to negotiate their outcomes than ever before - and that is a good thing.
These changes have not really happened overnight, even though it might sometimes feel that way. They've taken place over a number of years, and gathered momentum with changes in technology, employment law, offshoring, and outsourcing.
Despite all of this, something hasn't changed much, and that is the way we see the role of a leader.
Typically once a person reaches a certain level, then their organisation will send them off to be trained on the skills of leadership and people management. Managers then bring those skills back to the workplace. It is assumed that if they are not successful then it must be because either they didn't learn the skills, or they can't apply them.
There is something wrong with this model. People are supposed to come back from training and become a leadership guru, dammit!
Imagine if we employed engineers on the same basis. Most of us don't think about who the engineer was when we cross a bridge. We rightly expect that a qualified engineer will have had the necessary processes and used appropriate systems to properly do their job.
It should be the same for people management. The role of the leader should be to apply their skills using effective and reliable systems and processes in the business that enable consistent and reliable people management. As we find ever more creative ways to allocate work and organise teams, this becomes ever more important.
With an effective people management system the leader can apply their skills to ensure that the team strategy is appropriate for the external environment, and that the resourcing is sufficient to achieve it.
Instead, we talk about good leaders or bad leaders. We put the emphasis on the person, and ignore the effectiveness of the systems that a person has to help them use their leadership skill.
For sure, managing people is a learned skill, just like engineering or accounting, that is based on a growing and evolving body of knowledge. Just like those skills, an organisation must have effective tools available so that practitioners can productively and consistently apply their knowledge.
So, Change Agents, are you working on the people management system in your business? Or are you still focused on an ego-centric approach?
Gurus are cool, but they're hard to find, and it is very rare to build a sustainable organisation around them.
Let's change the conversation about leadership from being about the things that make a leader good or bad, and shift the focus to being about the reliability of the processes that enable people in the organisation to make productive decisions about their actions, interactions, and behaviours - no matter how they are employed, where they work from, or who their manager is!
It takes courage to do things differently. So often it's just so much easier to follow what everyone else does, even when we know that what everyone else does is not quite right.
We've written before about how HR is broken, and how the recruitment process sucks, so there are many reasons to try to do things differently to better manage people.
Many leaders talk about best practice, yet when we look at the people management practices in their businesses, including the recruitment process, we just see the same old way of doing things as everyone else. Huh?
So, it just happens that what everyone else is doing is the best practice for your unique organisation. Hmm. Does that pass the smell test?
Most business owners tell us how their business is unique. So it's a heck of a coincidence that what Google found to work in their office environment (15 years ago) happens to work just as well in your firm. It would be equally surprising if the performance appraisal, originally invented around the time of World War 1, just happens to be best practice for your business today.
We hear your "yeah, but ...". We raise it with, "so what else have you tried?"
Think about the process of recruiting new people for a moment.
A commonly used online recruiting platform allows people to upload their CV, then go and search for a whole bunch of jobs that meet their criteria, and send that exact same CV to every employer who happened to advertise a job with those attributes. With just a few clicks they've applied for 20 jobs today. Do they sound like the best candidates for you? Hmm. Yet that platform is the most popular recruiting platform, used almost by default by thousands of businesses. Now consider that many of those people didn't even write their own CV.
When do you ask candidates how they will achieve the outcomes of the job? How do you really assess how a candidate will fit into your your unique business? Only when you interview them? It's so lucky that you're an amazingly talented interviewer despite probably having never been specifically trained to do it.
So how on earth do you decide who to interview? Oh of course, the ones that had the best CV.
Best practice? Only by accident.
The recruitment process is only one example of the gap between common practice and best practice. There are many other examples in managing people where common practice and best practice are miles apart.
How many organisations genuinely do things differently?
Part of the challenge with best practice, is that it has to be invented. It needs people to step back, ask the bigger questions, and map out a different process tailored specifically for your objectives. In small businesses, finding the time for that is hard.
That's what we do at The H Factor. For example, the recruitment process in The H Factor system has no place for candidates to send their CV. Instead it asks candidates to answer questions about how they will achieve the outcomes of the business and the advertised position. It asks them to think about how they will actually use their qualifications and experience to benefit your business, so that you can decide who to interview. This process replaces assumptions about performance with the opportunity for candidates to demonstrate the value of their contribution. It provides the tool for you to make a more informed decision.
Best practice is not about being on trend, funky, or just standing out. It's about being more effective. In many cases it might look radically different to common practice.
When we created The H Factor, our approach was to identify the best approach for managing people, and instil it into a workable system that business owners can easily plug in to their businesses. We've applied that approach to managing recruitment, engagement, performance, and teams.
One of our values is to challenge the status quo and drive change. That value matters to us because we actually want to explore best practice, not just copy common practice. You're invited to join us.
Predictions of the future rarely turn out to be accurate. Many of the predictions about the future of work will be no different. It seems clear, however, that we are at the beginning of a substantial change in the way we work. For many people, the most visible change is the growing pace of technological change, but there are many factors driving us towards different types of work, and equally, different ways of working.
Many people may feel threatened by the reports of technological change, particularly in the area of automation. We believe that it is very important to be extremely careful of simplistic predictions. In fact, the World Economic Forum anticipates that artificial intelligence may actually deliver up to 58 million new jobs globally, which is perhaps contrary to the popular view that automation is going to take people's jobs away.
In any event, technology is only one of the catalysts for workplace change. There are a number of other drivers, including:
It is the combination of these that is leading to changes in the needs of employers, and at the same time changing the desires and expectations of employees.
Nobody can ignore the impact of technological development on the future of work. The impacts fall into 3 critical areas:
Technology is no doubt changing the types of work that we do. For businesses to fully access the opportunities that arise from technological change, they must have access to people with the appropriate skills to develop, deploy, use, and maintain it.
Many of the new jobs being created by technological change require different skills. Creative thinking, technological competency, and learning agility are all skills that are now valued more highly by employers.
As businesses themselves strive for greater agility and adaptability, they look for those same skills in their workforce. Perhaps a myth to be busted is that these attributes are about attitude; to a very large extent they are learned skills.
The future workplace will almost certainly require greater collaboration. A job in the future will more likely require you to use your head more than your hands. The jobs that require creativity, interpersonal skills, organisation, and decision making will be the hardest to automate. This means that what have previously been called soft skills will become more important. These include the skills of communication, empathy and relating to others, collaboration, conflict resolution, and planning. Effective leadership will therefore be especially important.
When we created The H Factor system, our entire approach is based on nurturing these skills. In particular, having outcomes based position descriptions and instilling an effective conversation about achieving the outcomes is especially important in the transition from measuring performance based on pre-conceived assessment criteria, to inspiring and monitoring performance through a natural conversation based on a shared understanding of the desired result.
THE FEAR OF DISRUPTION
As technology has become more accessible, the expectations of customers has changed. For example, in the past many of us caught a taxi without the need for a mobile phone app, but now Uber has shown a different and better customer experience by ordering on demand to where we are, rather than us having to hail a passing taxi by chance, or go to a defined taxi rank. Similarly, we rarely need to go into a bank for day-to-day transactions, and many of us may not even know what a cheque is.
For businesses, this has created the need to have greater flexibility in how they can manage their workforce and in their working arrangements for their teams. It impacts not just the types of work that people do, but it also impacts how they go about that work.
The bigger changes in customer expectations are based on technologies that have improved the human experience. This is why we believe that the biggest risk for employers is not that their industry will be superseded, it is that their competitors will find a better human experience for their customers. This is not merely a technical risk, although it is likely that some form of technology will be the enabler.
Therefore to minimise the risk of disruption, employers again need to tap into skills that may not have applied in their industry in the past. These will include technical skills such as coding, user experience design, and data anlaytics.
Those business leaders who have clarity about the problem their business exists to solve, and who can communicate why that matters, will reduce their risk of disruption by building organisations that are focused on the human experience. They are more likely to be the disruptors than the disrupted.
This is why The H Factor system home page is your business story - why your business exists at all. It enables your team to engage with the problem, and contribute their ideas and effort to your business being at the forefront of the solution for your customers.
OUTSOURCING AND OFFSHORING
For some tasks that can't be automated, employers have found outsourcing or offshoring those tasks to be an effective method for reducing costs. In some cases this approach also provides those organisations with access to specialist skillsets.
The use of subcontractors - whether they be in Australia or overseas - has been a growing trend for some time. One of the challenges in transitioning to these arrangements is effectively engaging the external team to work effectively with the workplace culture, deliver the appropriate quality of work, and managing the procedures for transferring work between internal and external parties.
An increasing number of people are employed on a contractual basis. They may even be full-time employees for the period of the contract. This is especially impacting traditional white collar workers, with particular technical skills, where employers see a need for those skills for specific projects. Again, the challenge is how to engage those contractors effectively with the workplace culture and ensuring that their work is consistent with the desired result.
In The H Factor system the type of work is separate from the type of employment contract. Every position exists to achieve an outcome. How a person is employed in that position is then a separate matter, and the outcomes conversation process for managing their performance still applies whether the person is employed permanently, or on a contract, or is located internally, locally, or offshore. Equally, the system enables access to policies, procedures, and training wherever or whenever they're needed - that have been created for the business by the people who actually do it.
CHANGING EXPECTATIONS OF EMPLOYMENT
Workplaces are more diverse than they have ever been. There are a number of factors driving this:
Immigration has had a dominant impact on social change in Australia over the last 20 years. For employers this has enabled access to a larger talent pool for many skills.
Once in the workplace, people from different backgrounds bring with them their different cultural values around work ethic, the need for perceived status from their employment, and different expectations of the work environment itself.
At the same time, the participation of women in the workforce has also substantially increased. Employers therefore have developed more flexible approaches to work, including actions such as specific policies around acceptance and inclusion, and organisational structures and working arrangements that accomodate such a diversity of needs and expectations.
Every generation brings with it different expectations about the role work will play in their lives. Some people started their working life in an era when their parents had one employer, or even one job, over their whole career, while others are starting their career with a desire to avoid investing in skills that may ultimately be automated.
There is a common perception that full-time permanent employment opportunities will become fewer as technological change becomes more rapid. So far, the statistics don't support that perception, but that possibly won't matter. If people don't believe that they will have a secure full-time job in the future then they will naturally seek greater fulfilment from the job they have right now - or they will seek to find a job that does provide such fulfilment. We hear this in many conversations we have with business leaders around the challenges of managing employees who are Millennials and Gen-Xers for example.
The H Factor system was designed to help leaders manage diverse workplaces by building the positions in their business around the "stuff that needs doing". This enables people to engage with the needs of the business, and self identify their own approach to fulfilling those needs. This enables a greater potential of fulfilment for people as it enables them to 'grow into' their position, and take genuine ownership of it. For managers it provides confidence that the people in their team see the business priorities the same way that they do.
Research has shown that the desire to be engaged in their work is a common aspiration for people across all generations. It enables people to achieve a sense of fulfilment and satisfaction from what they do. In an era where we have the greatest diversity of generations working together at the same time, it has never been more important.
We are optimistic about the future of work. It is our belief that, ultimately, all of these changes are leading to more interesting jobs, an increased capacity for businesses to make a positive difference to their customers and in the societies in which they operate, and an increased appreciation for and value on humanity itself.
Mercer Global Talent Trends 2019 Report; #7 Building The Lucky County, Deloitte Insights 2019; and OECD Library - Editorial: A transition agenda for a Future that Works for all.
H Agents write about the joys and challenges of entrepreneurship and managing people.