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).

 

 

 

 

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.

End of year/Christmas Office parties - a great time to unwind, rub shoulders with workmates and other great antics.  They can be a fun time!

But end of year parties have a very serious side as many of these antics lead to "regrets" after.

Recent research in Australia found that 70% of people believed that hitting the booze led to a more "personal" feeling amongst staff.  Nearly a quarter of females interviewed admitted that their boss had made a pass at them at an office party.

Such behaviours can present many problems for businesses, particularly if the "antics" involved lead to a complaint from a member of staff regarding the behaviour of another.

It would be easy to say "no office party" or "its too risky", but sometimes the advantages of holding the party far outweigh the negatives.  The decision to have or not have one is one for the business alone. 

I would recommend a level headed approach to this years Xmas party - making sure the party is well planned and your staff are aware of the required behaviours before hand.  This way you can have the fun while managing the risk!

To help you plan for your businesses party, download our Christmas Checklist today from our members section.

Only 37 days to go until Modern Awards and the National Employment Standards take effect, use this time Now!

In 37 days, Modern Awards and the National Employment Standards will begin governing the working relationships of nearly all Australians.  Recent legislation passed by state parliaments will see the Federal System of awards covering all private businesses in Australia for the first time. This is a significant step forward in Australian Industrial Relations.  For the first time ever, we will be coming close to having a national system governing employment relationships.

At People Smartz we are working with many businesses getting ready for the changes.  For many, the changes are small, for others significant.  With the Fair Work Ombudsman releasing media statements daily regarding the investigation of small businesses for underpayments or breaches of the legislation, it certainly pays to ensure you are ready! (I invite you to visit the FWA website www.fwa.gov.au to see their press releases - some of the numbers are impressive!) 

As an example - one change that we often see with our clients relates to working hours.  There is exposure to real risk as some businesses have been working a 40 hour week, and the law puts in place a maximum 38 hour week. 

We therefore recommend you look carefully at your business now.  Some questions to ask yourself are: 

• How will the Modern Awards affect my business?
• Are my contracts (employment agreements) up to date and consistent with the new laws?
• Do my employment arrangements cover the 10 National Employment Standards
• Do I have position descriptions?  Do they fit in with the Modern Award?
• Do we have a strong performance management system in place?

On the People Smartz website we have available for download an information sheet on the new laws.  Our Forum area is also available for you to ask questions and seek advice for your business. 

In addition, we have a number of services, such as our Free Compliance Review which you can take advantage of to assess your business.

The important thing is not to leave this until 1 January - check your business now! 

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.

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

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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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