People Smartz Blog

Recently I read a blog by a member of a large international coaching organization.  In the blog, the writer quoted W Edwards Deming (a guru of quality management and credited with the rise of Japan as a world powerhouse in manufacturing after WW2).

According to the writer, in the quote, Deming said that “that 94% of all failures in a business are the result of the “systems” in the business and only 6% of the failures are caused by the people in the business.”

I agree with Deming, however I disagree with the blog writer (who even managed to spell Deming's name incorrectly) who basically then went on to use this quote to explain why systems over people will create “leverage” in the organization.

The basic fault with the article was that it was designed to promote a systematic version of business coaching that is more concerned with short term gains rather than long term ones.  It is designed to encourage people to take a one size fits all approach to a business without taking into account the individual aspects of; or the people in, their business.  In short, it was an article designed to inform about how to save time, create a picture of short term success and promote their product.

Now, I’ll be up front and say that my blog is designed to raise the profile of my business.  I believe you were probably aware of this when you started reading; however my approach here is to ask you to think about the relationship between people and systems.

I believe that a business’s success is a result of the direct relationship between efficient systems and the people running them.  Systems are not the end, they are the beginning of the real process – that of creating a long term viable business.

See if you agree with the following comments:

• People run the systems, not the other way around.
• People make decisions, not the systems (the system can guide them in the right direction but in the end it is the people who make the decision). 
• People create relationships with People, not with systems. 
• A business succeeds because of the drive of the people running it – the systems make sure they are all on the same road.

I am not writing here saying that systems are not important.  In fact I believe they are important tools in maintaining consistency and quality, setting expectations and ensuring your business succeeds.  The more systemized a business is, the more likely it is to succeed.  Not because it is systemized, but because the systems create the time to concentrate on the important factors of business success. 

The important word in the previous paragraph is “tool”. Because that is what a system is - a tool that assists you, and your team, to achieve business success.  Imagine telling a carpenter that he didn’t build the shelf, the power drill did? Would he or she accept that? No way!  It is the same with your business, you need the systems as a tool towards the end product – and success for your business is the end product.

But regardless of the systems you have in place, it is important to have the right people to run them. This means becoming very good at knowing who the right people are in terms of attitude, skills and abilities.   Simply getting the right person in your organization, training them and working with them is probably one of the most important roles of a business owner or manager.

I know of one coaching organization that is so systemized in its recruiting approach that it advocates placing an answering machine on the phone, asking people to sell why they should get the job to the answering machine and then inviting the best answers to a “group interview” (Don't believe me - drop me a line and I'll give you the title of the book!)  The designers of this "system" know business owners are time poor, they know that saving time is attractive - so they have come up with a system designed to “save time” not to select the right person.  Ask yourself would such a system really work for your business?  Would you be confident of selecting the right person?

In the last week, I have received a call from a client of one of the bigger coaching groups.  They are looking for a business coach who is “people” rather than “system” orientated. 

They commented that they had commenced coaching on the same week as another business run by a couple they are friendly with.  They were in different capital cities, using a different coach from the same international coaching franchise.

The funny thing is that they had compared notes and found that the things they were being asked to do, the information they were being given and the advice they were being given was exactly the same – even to the point of them receiving exactly the same fax one day before a coaches visit on the same week of their program!  What’s more, they both saw red when advised that all future coaching sessions would be over the phone to “save them time” – and that advice was given in the same week! 

Maybe they were similar business you say?  No - one was retail and the other light manufacturing, one had 120 employees, the other 15.  One had been established less than a year, the other more than 10.  In short, they were being coached via a system with no tailoring for their individual needs.  Both companies are now in the process of finding a new coach.  Why - because it was the system that was coaching them, not the coach.

To end this article, I would like to go back to W Edwards Deming.  In his book “Out of Crisis”, he advocated a 14 point plan to save US industry in the 1980’s.  While Deming was a big (read this to mean big) believer in systems, he was criticized for providing a set of goals (his 14 points) without providing any tools to make them happen.  When asked about this by managers his reply was “You’re the manager, you work it out”. 

And to end, another quote from Deming – “A system must be managed. It will not manage itself” (The New Economics for Industry, Government, Education (1993))

Seems even the quality guru, Deming, believed that business was about a relationship between people and systems....

I can only say that business coaching and consulting is the same.  Think about this next time you look for a business consultant or coach – regardless of their specialty area!

P.S.  I have made several comments and criticisms in this article, If you would like details of where this information has come from (i.e. links, books etc.) please contact me and I will be happy to provide (except where it would break client confidentiality).

 

 

 

 

A couple of days ago, I had a long conversation with one of my clients.

His lament was one I have heard before from business owners - that staff these days are no longer "loyal" to their employer.

There is an endless amount of research regarding the difference between generations, and the changing face of our workforce and really I don't intend to go into those in this blog - what I would like to talk about is an often missed part of "loyalty" - that of individual identity and identification.

Let me explain by using myself as an example - I spent a good period of my life in the Navy.  If you were to ask who I was, I would say I was a "Sailor" - it is how I identified myself to myself.  In fact, if I was talking to someone with a naval background I'd probably take this further and describe myself as a "Yeoman" - a title that would not mean much to people outside the Navy.

Now over the years, I have begun a new career, founded a company and been fairly successful in my endeavours.  I truely enjoy the work I do, dealing with clients who are pursing their own dreams and goals.  While my personal picture of myself has altered, there is still that element of my description which says "Sailor". 

My point is that this personal identification has created in me a certain amount of loyalty to an organisation I left quite a while ago.  In my mind, that recognition and loyalty is still there.

For Business Owners, it is easy for them to identify themselves with their business - after all they own it, run it and are responsible for its success or failure. 

Sometimes it is hard for them to understand that their employees may not feel the same way about the business.  But after all, if their employees have had no opportunity to "recognise" themselves as part of the business - what have they got to be loyal about?

Speaking to my client the other day, we begun discussing this in relation to his business.  He is a very hands-on type business owner.  For him, his employees are people who come in, do a days work and then leave - the business is his to run. 

While talking, he begun to share some of his own experiences about when he felt the most loyalty to his own employers.

With this - he realised that he couldn't really expect loyalty from his staff if he was not offering them something to be loyal about.

I left him to think this over and consider what actions of his own were actually leading to the situation that was annoying him.

I'll let you know how he goes over the coming weeks.......

 

In my travels around businesses, I speak to a lot of businesses owners.  One of the most frequent responses I get when speaking to them about the new industrial relations laws is the title of this blog.

“We don’t need to worry about that” is a refrain that I hear quite alot.  The basic premise is that if they haven’t had a problem before, then they will not have one in the future.

As far as the industrial relations laws are concerned, thinking this way is not a smart move for business owners and managers.  Over the last couple of months, I have seen an increase in the number of businesses calling me for assistance after having received a letter from the Fair Work Ombudsman regarding a complaint from an employee.  On nearly every occasion, the business concerned had, until now, a belief that “We don’t have to worry about that”.

In a recent article, Judith Radisich from the Council of Small Businesses of Australia, in a response to a survey of small businesses said the following: “I am surprised that a higher proportion of small business respondents did not report complying with IR and OH&S laws takes up a higher proportion of their “people” time.  Perhaps the main reason for this is that survey respondents don’t spend much time on compliance because the laws are simply too complex and virtually impossible to get on top of for most small business owners”.  So, yet another reason for businesses to say “We don’t have to worry about that” – it is simply too hard to say otherwise!

One business I am currently working with has received two complaint letters and has been requested to provide payroll records.  The danger for this company is that the complaint, if found correct, could result in a large amount of back pay being ordered that the company cannot afford to pay.  Now the owners are not bad people, they have not set out to deliberately underpay their staff and are quite distressed that they may have.  But even they admit that they thought “We don’t have to worry about that”.

The fact is that we have recently gone through one of the biggest revamps of industrial relations in a long time.  When this is combined with an active workplace ombudsman (The Fair Work Ombudsman) with the power to order back pay, award fines and commence prosecutions then you have to wonder whether businesses can really afford to say “We don’t need to worry about that”.

Many thanks for this story to the HR Coach Network - it is a timely reminder for employers regarding bullying in the workplace and the possible effects of not having the appropriate measures in place.

A recent tragic case has highlighted the need for employers of all sizes to be proactive and vigilant in respect to bullying behaviour within the workplace.

The case involved the death of a 19-year-old cafe employee in Victoria, who committed suicide after more than 12 months of bullying at the hands of her co-workers. It was found that the victim was subject to constant taunting, criticism, name-calling and on at least one occasion had sauce poured over her clothes and hair.

In what is largely being regarded as a turning point for workplace bullying cases, the business was fined $220,000 for failing to provide and maintain a safe workplace and failing to adequately train and supervise its employees.

The presiding Magistrate said that the company had “tacitly approved” of the bullying behaviour. One of the company directors was personally convicted and issued a fine of $30,000. In a further landmark decision that has seen the liability for bullying extend beyond businesses to individual employees, three of the victim’s co-workers were convicted and fined a total of $85,000.

Combined with a recent survey indicating that nearly 1 in 5 workers has been subject to bullying, the case highlights the importance of employers and employees alike taking measures to prevent and eliminate bullying in their workplaces.

Over the last two months, we have seen a huge increase in businesses requesting we conduct our free compliance check on their business.

The reason for this is the implementation of the new Modern Awards and the National Employment Standards.  We are now seeing the effect of these new awards and standards on business and the additional burdens they involve.

Our experience with these reviews has enabled us to identify the 5 most common things we are seeing that businesses need to change because of the new laws.

Here they are (in no particular order):

1.  Expectations of 40 hour working week - a 40 hour working week is not in accordance with the National Employment Standards.  These standards set the maximum number of hours at 38 hours.  Now there are ways businesses can continue to use a 40 hour working week providing their employees are better off overall.  But these need to be agreed in writing through either individual flexibility agreements or a collective agreement.
2.  Ordinary working hours not in accordance with the new Modern Award - the new awards may include a change to the hours used to define ordinary working hours.  This means that from 1 July 2010, overtime or penalties may kick in at new times when compared to other agreements. These are subject to transition arrangements, but businesses need to be aware of the potential of extra cost here.  Once again these may be changed by individual flexibility agreements etc.
3.  Businesses still utilising State Awards - All Australian States (except W.A) have referred their powers for industrial relations to the Federal Government.  This means that, except for state government employees, the vast majority of employers previously on a state award are now covered by new modern award.  Businesses need to be aware and compliant with the appropriate award.
4.  Lack of awareness of National Employment Standards - the National Employment Standards lay down the minimum standards of employment for all employees.  By not being aware of the changes between the standards and their current practices, employers run the risk of being in breach of the standards.  A couple of the most common things we are seeing are an unawareness of new work flexibility requirements and the altered termination and redundancy requirements.
5.  Thinking they can ignore the changes - this is just not a smart business move, but a number of businesses are electing this option.  I recommend if you are considering this, you visit the Fair Work Ombudsman website and read the press releases concerning the breaches they have identified and taken action against.

Should you be concerned about your business, or you want to check to made sure your doing things right -  book yourself in for one of our compliance reviews today!

Happy New Year!

Listening to the news last night here in Brisbane, the reports were on many new laws/changes being introduced in the new year.  Bus Fares were going up, politicians were going to be paid more etc.

But there was not one mention of some of the most wide spread changes to the working lives of Australians.  Effective today, Australia's new system of modern awards and the National Employment Standards (NES) will now govern the way businesses employ and manage their staff.

Over the past 6-8 months, I (and many others) have been seeking to raise awareness of these changes and urging businesses to prepare.

Today, the time for preparation is over - from today it is time to act......

If you haven't already identified your new award, it is time to do it.

If you haven't looked at the New Employment Standards (NES), it is time to do it.

If you haven't already identified the changes to your employment practices that will need to be made, it is time to do it.

If you haven't already put in place policies and procedures to protect your business, it is time to do it.

If you haven't already ensured your employment agreements are consistent with the new laws, awards and standards, it is time to do it.

If you haven't got appropriate processes in place to mitigate risk in areas such as harassment, discrimination, Health and Safety etc, it is time to do it.

If you haven't got a engagement plan for the unions relevant to your business, it is time to do it.

If you haven't got a plan for "good faith bargaining" and consulting with your staff, it is time to do it.

If you haven't looked into how to introduce flexibility into your business through "individual flexibility agreements", it is time to do it.

Not a bad list is it?  And this is only the start! 

For more information, visit the members section of our website today!

People Smartz is proud to have been accredited as an approved consultant for the Jobs Assist Program.

The Queensland State Government is providing grants through approved Consultants for the delivery of advisory and mentoring services to businesses with 10 or more (full time equivalent) employees under the Jobs Assist programme.

The Department of Employment, Economic Development & Innovations (DEEDI) is providing the support intended to help businesses weather the current economic conditions. The financial loss and consequent unemployment caused by business failures is well understood. DEEDI is generously providing funding wherever such assistance is beneficial to sustaining businesses and the retention of employees.

Consulting assistance worth up to $8000 to each eligible business is provided in two stages:

Stage 1  -  For the purpose of diagnosing the issues impacting upon an existing business and to develop an Action Plan to help owners addresses strategies and activities which improve the business model.

Stage 2  -  For the purpose of engaging a consultant to mentor and provide expert advice with implementation of the priority tasks identified in the Action Plan. The outcomes sought are increased efficiencies, business sustainability and an increase in overall productivity.

Eligibility Criteria

The businesses accepting the assistance must meet the following criteria:

• Employ 10 or more full time (equivalent) employees;
• Have an established operating base in Queensland;
• Have an ABN and be registered for GST; and either
• Be located within a Local Priority Employment Area under the Federal Government Keep Australia Working Strategy; OR
• Fall within key sectors considered critical or of strategic importance to the State, region, industry or sectorial supply chain.

 To find out more about eligibility or to apply please contact us for more information today!

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The HR Coach Research Institute has released its latest quarterly research into employment confidence in the business sector.

The research indicates that positive signs are beginning to enter into the minds of business owners and preparations are being made for an economic recovery. Because of this there is a focus on short term business improvement strategies in readiness for the growth. 

The following is quoted from the results of the research:

"The Institute has identified that in anticipation of an economic rebound, businesses are moving into preparation mode.

The top 3 critical issues facing business have remained the same over the past year – Lack of Work or Sales, Cash-Flow and the Economic Climate.

With an improving expectation of growth in sales and profitability, businesses are looking to resource this trend with increased participation of employees as well as the recruitment of new employees. Concern in relation to finding and keeping talent could see an increase in wages bills – both through an increase in hours of part time employees, and rates of pay for full time employees. This may address the labour underutilization rates that have increased in the past year.

With a low expectation of investment in capital expenditure, businesses are maintaining a short term view in relation to return on investment strategies. This will drive business improvement strategies; building on core business rather than innovation.

As internal organisational confidence continues to decline, businesses will need to focus on internal processes. Businesses will most likely be addressing orientations, workplace and legislative policies in the coming months. This may trigger a resurgence of quality management systems in the market."

The full report on this research is available from the People Smartz Members area. To download - click on the link below:

HR Quarterly Index - October 2009

Laws regarding the use of Independent Contractors have been around for quite a few years now.  These laws are designed to provide increased protection against employers who try and avoid their employment obligations by using what are called "Sham" agreements.

Independent contractors run their own business and should be free to negotiate their fees and working arrangements.  They may provide their services to any number of clients.

Employees have set minimum entitlements (payment of wages, annual leave, personal leave etc) and are subject to the control and direction of their employer.

A "sham" agreement occurs when an employer deliberately disguises an employment relationship as an independent contracting arrangement in order to avoid paying an employee his or her entitlements.  It is possible that an employer who makes arrangements in this way could be fined up to $33,000. 

Many businesses I work with enter into independent contractors agreements in order to "benefit" both the business and the person doing the work. There is no intention to deceive or avoid obligations - just an intention to "do the right thing by all" by improving the return to the "employee" and to save the company money.

Unfortunately, this could be opening up a minefield for the business and the independent contractor.  If the arrangement has been made with the intention of avoiding obligations on the businesses part, it can result in fines, back taxes and other costly penalties.  There can also be tax ramifications for the independent contractor.

When reviewing whether the working relationship is one of employment or independent contract, the Fair Work Ombudsman will look at the circumstances.  Things such as how the work is performed, who bears the commercial risk, whether the work is results based or not, who sets the hours of work, whether the individual has a right to delegate work and who provides the equipment used are some of the many factors which can be taken into account.

I strongly recommend to my clients before entering into independent contractors arrangements that they closely review the relationship they are forming.  While the benefits of utilising independent contractors are significant, if not structured properly, they also introduce an element of risk to the business.

People Smartz is able to assist businesses with the process of employing independent contractors.  If you have, or are considering, independent contractors in your business - contact us today.

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The Australian Industrial Relations Commission has been releasing over the last couple of months the new Modern Awards to cover employment within Australia from 1 January 2010 .

The process is continuing and by the time January 1 comes along, all employees under $108,000 per annum will be covered by one of the new modern awards.  This includes professional occupations who previously had not been covered by an award - some of them under a new "catch-all" award created for the purpose of ensuring they are covered.

While not all the awards have been released, a list of the one's released so far (with a copy available for download) is available from http://www.airc.gov.au/awardmod/fullbench/awards.htm

I would strongly recommend that you review this list and download the award applicable to your industry.  From 1 January 2010, when the awards become effective, you will be required to be complying with the award applicable to your business.  The time to start preparing is now not on 31 December!

The businesses I am working with on preparing for the new awards vary in the amount of work they need to do to prepare for the changes.  It really does depend on the individual business.....

If you want to know more, as well as a suggested list of activities you can undertake to help yourself prepare for the changes - visit out website by clicking below and downloading our information sheet.

Australia's New IR Laws - Information Sheet

If you have any questions about the changes, please feel free to contact us or post a question on our forum page!  Our forum is also hosting a discussion on what effects you believe the new laws are going to have on your business - why not give us your thoughts today!

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The People Smartz Forum