Recently, AIM surveyed managers and asked them to list the top six management issues that would keep them awake at night over the next 12 months. Chris Sheedy looks into these six red-eye specials. Through March–April 2007, the Australian Institute of Management ran an online survey asking managers for what they saw as the crucial management issues facing them over the coming year. The survey itself was simple. From a listing of 30 key management issues, respondents were asked to list the top six that were most likely to wake them up at night in a sweat. The six issues that would most affect their world. The ones that had the ability to negatively impact their organisation’s bottom line. The red-eye specials. Over the following pages, each of the six issues is investigated and includes the experiences and insights of experts and managers in clarifying the issues and finding solutions to them. Issue 1. Pressure to achieve management objectives/outcomes For Unwired CEO David Spence, the technique to achieve big goals is all about breaking up plans into bite-sized pieces and completing them one step at a time. While, at Google Australia, celebrating the achievement of management and project milestones is seen as vital, and one done on a weekly basis at their “Thank God It’s Friday” social sessions. Issue 2. Work/life balance Bill Samuels, Manager of Maker’s Mark, the Kentucky bourbon distillery that’s been in his family since 1840, is a workaholic. But knowing work/life balance was important, he went about working out what that meant to him. Samuels’s experience only confirms that there’s a very individual view to the meaning of the term “work/life balance”. Issue 3. Finding and appointing talented staff While the skills shortage problem is widespread, some organisations have no problem in attracting talented people. Bridgette Di Ferdinando, Director Asia/Pacific at Alexander Mann Solutions, explains that integrating advanced human resources practices into an organisation can mean staffing is never an issue. Issue 4. Managing organisational culture Matt Davey, CEO of Virgin Mobile, relates a funny story about seeing one of his staff kissing envelopes destined for customers. It sounds just like Virgin, right? Virgin’s organisational culture is the result of a process of staff selection that involves particular company policy. Issue 5. Developing organisational leaders HR guru Geoff Morgan, past founder of Morgan & Banks and current Director of recruiter Talent2, believes it is best to immediately tell a potential leader that they’re being groomed for greater things. If they’re the type of person you think they are, they will respond accordingly and step their performance up another notch. Issue 6. Retaining staff Retaining staff is critically related to the recruitment process, says Gillian Franklin, Managing Director, The Heat Group. Her own research suggests that her company’s staff turnover was often not due to someone being a poor performer; rather, just not good in the specific environment into which they were placed. Down the list Survey issues just outside the top six were: communications; driving efficiency gains; keeping pace with organisational change, measuring/analysing staff performance, and succession planning. The bottom six management concerns were: managing virtual teams, fraud/theft, managing a multicultural workplace, staff/office security, corporate social responsibility (triple bottom line), and Work Choices impact. 1. Goal scoring Whether your job is to cope with pressure or apply it, there are several simple ways to ensure staff are not overwhelmed by management expectations. One day during the final quarter of 2004 eight people sat in a room and decided they were going to create an entirely new wireless broadband network for Australia. Armed only with a whiteboard, pens and a lot of blank paper, they set about creating the brand that would become known as Unwired. One of those present was Unwired’s current Director and CEO David Spence. “We scratched out a plan of how we wanted to build this thing from the ground up,” Spence says. “We even worked out what sort of brand we wanted to build and the values around the brand that we wanted to put in place. Everything evolved from there. It was very important to set that original vision, and all of the objectives hung off that.” Then, of course, it was time to start setting goals and objectives in order to make the dream a reality. But presenting a manager with the big picture would be overwhelming, so Spence, who now has around 130 staff, made things more digestible. “We had to start off by grabbing some key people in key roles, getting them on board with our vision and letting them go from there, making sure they could move quickly. We broke the steps down into 13-week or 90-day business plans, and in each quarter we only ever looked two quarters down the track. We never plan too far ahead in terms of where we want to be because things change so much. If our planning is too long term it all becomes a bit meaningless.” Applying and coping with pressure from management objectives is all about breaking the plans up into bite-sized pieces and completing them one step at a time, Spence says. It’s also important to celebrate milestones and recognise how far you’ve come. “We have a quarterly celebration for all the staff, and bonuses to recognise achievement at six-monthly intervals,” Spence says. “Half of the bonus is based on achieving company goals and the other half is based on achieving their own personal goals.” At Google Australia the celebration of milestones is also seen as a vital part of business. In fact, it’s done on a weekly basis. “We call it TGIF, or Thank God It’s Friday,” says Human Resources Manager Siobhan Lyndon. “We all get together socially every Friday afternoon to recognise what we’ve achieved for the week and celebrate some of the projects coming out of beta.” Google’s staff handle their often enormous objectives by working in small, self-managed teams, each of which are focused on one specific part of a project. The hiring process at Google ensures staff members are very self-driven so, as with the managers Spence put in place, they are able to be pointed in a direction and set free. “We are very flexible in terms of how we work,” Lyndon says. “The small teams are very project-focused and often decide what their own goals are. That’s where our unique culture plays such an important role as we have a group of very self-motivated and enthusiastic individuals.” Spence says it’s also important to figure out which objectives are best met by outsourcing specific tasks, particularly ones that are not a direct fit with the organisation’s major skill sets. “A lot of our stuff is outsourced because it was always a part of our vision to not do anything that other people could do better than us,” he says. “But anything close to the customer or close to the development of technology we kept inside.” Once the plans are in place, the objectives are set and the teams are getting things done, it is then imperative to manage the expectations of the people who are applying the pressure, Spence says. For Unwired most of the pressure comes from the market itself, so he is careful to never publicly forecast anything. “We don’t want to overset expectations and then find ourselves having to live up to them,” he says. “But sometimes, even if we try not to do that, the market sets expectations for us – which is very kind of them.” 2. Balancing act A good work/life balance can seem the most difficult thing to achieve, but it may simply be a matter of understanding your priorities and communicating them to the people close to you. When he took over the management of Maker’s Mark, the Kentucky bourbon distillery that had been in his family since 1840, Bill Samuels soon realised that he was a workaholic. He never enjoyed holidays that involved much sitting around, but instead longed for the challenges and outcomes and competition involved in doing business. But Samuels realised that a work/life balance is important, so he went about working out what that meant to him. “Forty years ago my father said to me, ‘Kentucky has been awfully good to us, be sure that you give something back’. With this in mind I started picking out organisations in Kentucky that I was interested in: education, handicapped children, business organisations, community issues,” Samuels explains. “I’m about an 80-hour-a-week guy, so I now spend 40 hours working in my own business and 40 hours working my butt off for outside charitable and community organisations. To many it would seem a second job, but to me it’s relaxation, and it has been a great education, too.” Samuels’s example is important in illustrating the individual nature of the meaning of the term “work/life balance”. To some it means more time with family, to others more time in the surf and, to a few, more time at work. Gillian Franklin, Managing Director of The Heat Group, has been married for 26 years and has three teenage daughters. She’s also responsible for one of Australia’s largest cosmetics companies and for the security and success of its 77 staff. But through careful planning and a very clear understanding of her priorities, the two worlds have never had to collide. “For my family there are certain non-negotiables for me at work, for example, board meetings, overseas trips and interstate trips, things integral to my role. Then the people at my workplace know there are non-negotiables in my personal life, for example, I won’t plan an overseas trip during one of my family’s birthdays or if there is an important event for my children. So it’s about being very open with the rule book on both sides. It’s not about hours or time, more about events and important issues for both sides of my life.” Within the workplace Franklin also encourages her staff to develop a good work/life balance. For example, if an employee has a young child who is attending school for the first time, she insists they take time off to drop them off and pick them up. “We appreciate the importance of those events that only happen once. You can never get them back again.” A lack of balance, Franklin says, can manifest itself in grumpiness at work and loss of productivity; an inflexible workplace coupled with home pressures can lead to enormous stress. Creating a flexible workplace and allowing for a better balance doesn’t mean staff will lose their competitive edge, but it does mean they will do a better job when they’re at work. As well as flexible hours, Franklin has implemented what she calls the “lifestyle weekend” where every second Friday staff can leave at 1pm as long as they’re up to date with work. Staff also automatically get life insurance and income insurance as a part of their salary package; maternity and paternity leave is fully paid for three months and men, who usually just take one day off when their partners give birth, are given a “new-baby week”, fully paid, to take care of their partner and their new child. The policies within The Heat Group have been implemented to encourage a healthy work/life balance for all staff and, rather than losing productivity, it has now become one of the most fiercely competitive and successful organisations in its field. 3. Staff matters It’s universally acknowledged that we’re in the grip of a skills shortage. So why are a few organisations awash with talent while the rest struggle? There are several basic mistakes that organisations make when it comes to recruitment and these can have an enormous effect on the organisation’s ability to find the right people at the right time, says Bridgette Di Ferdinando, Director Asia/Pacific at Alexander Mann Solutions. But by turning these issues around and integrating advanced (and often simple) human resources practices into the organisation’s processes and policies, staffing need never be an issue, even during a skills shortage. “Organisations that are innovative enough can actually increase their potential labour supply, but they need to think outside the traditional methods,” Di Ferdinando says. “Organisations who are struggling make a few classic mistakes. They don’t know which vacancies are coming up because of a lack of communication between HR recruiting and the business. They use high-cost channels to source talent. And they’re not transparent with their hiring process – and potential candidates can see that – for example when a candidate receives an automated response saying they’ve received the application, but which doesn’t tell them the next step of the process. If you want to secure top talent you have to show them they’re valued.” So what can a business do to ensure they’re attracting the right people? The first step, Di Ferdinando says, is to look for innovative ways to source talent. Some organisations now have referral programs with their staff, meaning staff members are given incentives to recommend great people from other companies, whether there’s a vacancy or not. It’s then HR’s role to look into and keep a record of those referrals. Another method is for HR to map the market for specific roles. This means constantly scanning other organisations, university graduates and social networks to keep an updated database of people within the industry. It means keeping contact details current in order to proactively target people from outside the company, and even having some knowledge of individual aspirations. All of the information contained within the map combines to form a powerful resourcing tool that can be used to help fill specific roles once they become available. Of course, many companies also look internally for staff to fill roles, but one large and powerful group of people who are rarely mined for their employability are those who are leaving the organisation. When they leave they take with them an enormous amount of intellectual property that will still be with them should they ever return. “Don’t forget that leavers are just as important as new candidates,” Di Ferdinando says. “Just because they’ve left doesn’t mean they won’t want to rejoin the company. If they leave with a positive experience they’ll be happy to talk about the fact that they worked for your company, and there’s no reason these [people’s details] shouldn’t be kept updated. The HR staff should stay in touch with them, create an alumni network, see how their careers develop and transform that knowledge into opportunities for them to return.” It’s also vital to ensure that the promises given about the job on offer are kept and are aligned to your corporate brand. “Some companies promise champagne and caviar but deliver beer and peanuts,” Di Ferdinando says. “But if you commit to your promise and deliver on it you will generate a pull to your organisation; you’ll actually have candidates wanting to come and work for you. How many times have you heard people say they’d love to work for Google or Virgin? That’s because of their value proposition, because the internal reality is reflected in how the company is perceived externally.” Finally, in order to ensure these methods all have a chance of working to optimum efficiency it’s important that organisations bring the resourcing and recruitment functions into every area of the business. HR should not operate as a silo but rather as an integrated part of the business; only then will a company be able to find and attract great talent, even during a skills shortage. 4. Cultivating culture It can be the magic glue that holds a company together and attracts talent from across the industry – no wonder a great work culture is so difficult to achieve. One bizarre and unforgettable experience was all it took for Matt Davey, CEO of Virgin Mobile, to realise that his organisation had, indeed, been imbued with the same passionate, fun and professional culture that the Virgin brand was famous for. “I’d been here about six months when I came across a customer service rep,” Davey recalls. “He was packing customer mail-outs into envelopes and he was licking down the envelopes as you would, but then I saw him kissing the envelopes. I said, ‘Hang on, what the hell are you doing there, mate?’ He said, ‘I’m making sure the customers know that we love them’. And he was absolutely fair dinkum. I just looked at him, then I thought, ‘Okay, I get it’.” The passion and sometimes kooky dedication he sees in his staff is not a random piece of luck but rather the result of a carefully managed process centred around staff selection and also involving company policy. “When we’re hiring people we actually pick staff members who really embody the Virgin culture, and they conduct some of the interviews, even if the position is for their future boss. They give us a reading on the person’s cultural fit and if they don’t fit they’re not hired,” Davey says. The Virgin culture is all about avoiding bureaucracy wherever possible. Rather than wearing suits and ties staff are encouraged to dress more comfortably and casually. Excessive emails, and emails to people sitting a few desks away, are a big no-no. As well as being integral parts of teams at work, the staff are also included in charity work organised by the brand’s charity arm, Virgin Unite, so they truly feel they’re making a difference. And rather than simply talking about empowering their staff, Virgin regularly call upon their workers to make decisions. Add to that training, mentoring, other forms of career development and a hell of a great party every so often and it all adds up to a culture that people are proud to be a part of. Google is another organisation whose culture means it has no problems attracting talent, and once again it’s an organisation that trusts, encourages and rewards its staff. Google in Australia, as it does in its American head office, has a policy called “20 per cent time” where staff are encouraged to spend 20 per cent of their time in the office working on personal projects. It is through this time that Google News was developed, as was Orkut: a social networking community that is a smash hit in Brazil and India. “We are always trying to perpetuate what is already an incredibly good culture,” says Siobhan Lyndon, Google Australia’s Human Resources Manager. “We try to make the work environment as fuss-free as possible for employees, from providing on-site massages to providing catered lunches for all of our staff every day. We’ve even imported a couple of fantastic espresso machines from Italy: we call them Big Red and Little Red.” As with Virgin Mobile, what’s most imperative is that they hire people passionate about Google and who fit into the organisation’s culture; people who will perpetuate and strengthen the culture. “We’re about an atmosphere of collaboration, and decision by group, so that’s reflected in our interview process too,” Lyndon says. “There are a number of people in the process; with most other companies it’s just the manager doing the interview.” And while Lyndon remains tight-lipped about the details of Google’s recruitment system, it is a faultless one that absolutely works. How can we be so sure? In its four years of existence, not even one staff member has ever left Google Australia – an incredible record in anyone’s book. 5. Talent spotting Some leaders are born with talent and some are trained, but they all need to be nurtured and mentored in order to show their true potential. According to HR guru Geoff Morgan, past founder of Morgan & Banks and current Director of Talent2, a leader can be identified early in their career through several common traits. It’s important that they are good people, it’s also vital that they are charismatic, and that they have the ability to motivate others. “They always have a great passion for what they do and they are great communicators,” Banks says. “When they stand on the podium and they present company information everyone feels involved because they’re very passionate. Others get caught up in their enthusiasm for what they’re doing. They also don’t pick and choose the work they do, they happily jump in and do whatever they need to do.” So once the future leaders have been identified, how exactly does one go about developing their leadership potential? According to Banks it’s a matter of further developing their communication skills through mentoring, further training and regular presenting tasks, and sending them out into the broader workplace to gain a greater experience of the business in which they’re involved. “They need experience in all environments: regional environments and international environments if possible. The other thing you need to do is get them multi-tasking in terms of their job functions; not necessarily so that they’re experts at everything but simply so that they experience everything.” And it’s not just those with natural talents who should be given a shot at the top spot, Banks says. “I think there are born leaders, people like Richard Branson, but there are also trained leaders who learn to speak, learn to motivate, learn to be charismatic, learn to walk around and talk to people, to be inclusive and all those things. There are a lot of people playing music who are not Paul McCartney!” David Spence, CEO of Unwired, agrees that a leader can be identified as somebody who has the ability and the motivation to multi-task. Through his company’s regular six-monthly staff review process he is always looking out for future leaders by “identifying those people who contribute as much as possible internally in their own and other departments. The leadership quality is a mixture of achievement and of being accepted by your peers,” he says. Once a potential leader is identified within Unwired they are given regular tasks outside their usual roles. This gives them experience of other facets of the business and also affords them opportunities to further prove their professional and personal value through the review and bonus process. It’s important to understand, though, that the term “leader” does not necessarily mean somebody who will take over the company, Spence says. It often refers just as much to somebody who is vital to the glue of the company; somebody who needs to be kept motivated because they’re so important in their current position. “We’re not looking for autocratic types of leaders in this company,” Spence says. “We’re looking for people with a combination of skills as well as the ability to persuade and get on with other people, to have some sort of empathy with the individuals working within the company.” So when is it best to tell a potential leader that they’re being groomed for greater things? Morgan recommends telling them immediately. If they’re the type of person you think they are, they will respond accordingly and step their performance up another notch. “Tell them as a core part of their motivation,” he says. “You’ve got to allow people to share their dreams with you and you share your dreams with them, and if they’re aligned then away you go. If they fall short and don’t make it then you just have to give them the bad news and tell them this is as far as they’re going to go. It doesn’t mean they can’t be the best person at that level. It’s a really weird thing, but honesty works.” 6. Hold on tight Every business loses good staff at some time or other, but great companies reduce their chances of churn with smart recruitment plans, constant challenges and innovative perks. We can’t all be as successful as Google Australia when it comes to staff retention – they haven’t had a single employee leave in their four years of existence – but most of us can do better when it comes to protecting our most important assets. Although she’s considered to be one of the great innovators in the field of staff retention and morale, Managing Director of The Heat Group, Gillian Franklin always feels she can do better. “One way that we try to stay in touch with what is happening is to do a staff survey every six months,” she says. “We ask people to anonymously tell us how they’re feeling over a wide range of issues. That’s one place you can tell if there’s a shift, or if people are under too much pressure.” The single most important ingredient in successful staff retention, Franklin says, is getting the recruitment process absolutely right. Her own research has shown that most of her staff turnover has been a result of poor recruiting practices: the person was not necessarily a bad performer, but was not a good performer in that specific environment. “I think there are two challenges in hanging on to great staff,” Franklin says. “One is the reward part, which is not just about money, it’s about time, flexibility, respect and recognition. The second part is that great people constantly need new challenges because they want to learn and grow. You can lose good people if you don’t have a next step for them.” Formal reviews every six months help Franklin stay in touch with the individual needs and desires of her staff, and long-term incentives, such as an extra week of annual leave after five years with the company, add to the already attractive company policy of flexible work hours, family-friendly practices, free insurance and free product. “I really have a great sense of the cost to the business when someone leaves; so I think anything you can do to keep people is worth it,” Franklin says. Her policies have been providing results, even attracting a few good staff back to the company after they’d left and realised their new workplace didn’t offer the same perks. Bridgette Di Ferdinando, Director Asia/Pacific at Alexander Mann Solutions, says staff retention has a great deal to do with integrating the “high-touch” areas of HR into everyday management processes. “Great companies have integrated their recruitment processes with their succession planning programs, performance management programs and training and development programs,” she says. “You need to be constantly speaking to staff to understand individual career aspirations. You need to enable them to move into another position when they’re ready for a change.” Di Ferdinando agrees that the recruitment stage itself is the most important part of ensuring the staff member’s longevity within the organisation. “More important than how good at their job they are is whether they will actually be a good fit within your organisation? Will they live and breathe your brand? Do they share the same vision, and is your vision and your value proposition clear? They need to be a great candidate and somebody who is actually going to adhere internally to the culture.” Google Australia’s enviable staff record is mostly to do with their extremely thorough recruitment process, says the company’s HR Manager Siobhan Lyndon. Hiring people who are passionate about Google, she says, is absolutely imperative. If they are dedicated to the brand, then not only will they buy into the company’s objectives, they will also perpetuate the culture and enjoy their work. “A lot of people talk about our perks, which is great, but I think the essential ingredient is the kind of work our employees get to do,” Lyndon says. “It’s cutting edge, the latest technology and they’re developing innovative products that will impact the whole world; so it’s a very exciting place to be.”