Managing Fast Growth Successfully by Hugh Billot

Introduction
The Company
Managing New Employment Legislation
The Approach
Process Examples
Review
Lessons
Leadership
Empowerment
Team-working
Coaching
Performance Management Systems

Introduction

UK prosperity is becoming increasingly dependent upon the success of fast growing small and medium sized companies (SME). These companies have been in the ascendancy in the last decade when many of the larger companies, especially those in the manufacturing sector, have been in decline. Much of the current level of national prosperity can be laid at the door of the fast growing SME's. In fact, employment is at a record high, inflation has remained low for many years, unemployment is low and has been falling for some time and Britain's position in the world competitiveness league has been climbing, but still has some way to go.

One ought to say the picture was rosy with an even brighter outlook. However, there are some storm clouds on the horizon, very many stemming from the 3,000 new regulations introduced by the government since it took office some three years ago. Most employers, their trade bodies and the employers' organisations have been openly hostile to the ever-increasing bureaucratic burden companies have to face. The cost of such bureaucracy has been estimated at around £10bn. So great is the cost and complexity that some major employers' organisations have suggested that business growth will slow, and there will be a decline in both company profitability and its job creating capacity.

To counter this expectation, businesses, especially the SME's, will need to apply their normal commercial flexibility, together with innovation, enthusiasm, determination and rapid change, especially in the rapidly growing field of employment regulation.

This paper examines such an approach taken by one of those SME's which is a fast growing business, focussed, and resourceful in its approach to meeting change without impeding productivity or profitability. 

The Company - Human Resource Group plc

The Human Resource Group (HR Group) entered the new millennium winning a Hot 100 Award. This award recognises that the company is one of the one hundred fastest growing businesses in London and the South East. To win such an award, companies have to have achieved a significant year-on-year growth in turnover. They are then ranked according to their average compound turnover growth rate over four financial years.

The HR Group has seen turnover more than triple since 1994. Turnover has increased from £13.7million in 1994 to £48.4 million in 1999. It is set to reach an estimated £57 million in 2000. This performance has put the HR Group among the top fifty recruitment agencies in the country.

The HR Group, founded forty years ago by Betty Parkinson, the mother of today's Group Chairman, Jack Parkinson, has grown to a business that now encompasses thirty six specialist companies offering a wide range of recruitment services. Over 300 recruitment consultants are employed in the group.

The HR Group is building on a philosophy of organic growth, acquisitions and joint ventures. The approach to joint venturing is most interesting with new ventures retaining their autonomy and independent identities. The group provides these companies with administrative support, such as financial and personnel services, and the joint venture partners get income support and equity involvement. However, the individual companies act as a network for the larger group, and any one of the sixty three operating outlets in England and mainland Europe serves as a single point of access to the group's substantial combined resources.

Jack Parkinson, Group Chairman, has set some ambitious aims for the company and its staff. He wants even more rapid growth, both in the UK and Europe to take the company into the top twenty-five companies in the sector, and eventually to stock market flotation. It is a central part of group philosophy that employees participate in the company's success. He hopes that a stock market flotation will eventually turn 100 key employees into millionaires.

In meeting these challenges, the group's operating businesses are expected to adopt key business values such as:

• detailed market knowledge.
• integrity in the company's dealings including client and candidate confidentiality.
• value for money service.
• high speed, high quality response.
• high staff satisfaction and first class development opportunities.

Company vision can be summarised as:

'Our growth and success is important, but not as important as dedicated services unique to every client'.

Whereas the mission is simply:  'To be the best recruiter and people supply company'.

HR Group companies operate in most business sectors, and can meet the needs of its clients in almost any employment activity.

Managing New Employment Legislation

The last three years have seen a massive change in the regulatory framework of employment. Almost every aspect of employment has experienced some new control including pay, pensions, holidays, hours of work, safety, fire prevention arrangements, electronic communications, parental and maternity leave; consultative arrangements, data protection, 'whistle blowing', disability dealings, disciplinary arrangements, sexual harassment, business transfer regulations, training, and welfare arrangements.

The task of dealing with this bureaucratic deluge is a nightmare to many small and medium sized companies where few, if any of the management team have the knowledge, skills and expertise to address the issues properly. This leaves such companies with three serious options to manage the changes. 

Firstly, to hire an expert into the permanent team - a costly and time consuming process in its own right. Secondly, to train existing managers in the changes, and have them address the issues. The problem with this approach is, it can lead to managers taking their eye off the ball, and in fast moving businesses this can have a damaging effect on both growth and profitability. The other negative aspects are that they may always see the task as subordinate to their main line role, and hence progress will be at best slow - at worse, stagnant. Also sometimes a little knowledge results in a poor job. Thirdly, to hire an expert on a needs basis to prepare for and co-ordinate the change and use 'empowerment' to involve staff from all levels to develop new procedures, consulting mechanisms, act, as trainers, coaches, assessors and change agents so ensuring senior management stay focussed on driving the business forward. The advantages of this approach are self-evident and have the added benefit of generating ownership of the change as cross slice teams research, formulate and implement change.

The HR Group decided to adopt this third way, as it was the most resourceful and expedient way to address the issue in a very decentralised and fast moving business. The approach was also compatible with the company's philosophy of teamwork and job satisfaction programmes, and would present an opportunity of finding an innovative way forward, which could add to business competitiveness.

The Approach

The company wanted to generate amongst staff a 'possibilities mentality' towards change to ensure that the normal resourceful business environment could be used to develop new procedures and policies which were supported and accepted by the staff, and which complemented the company's needs for ongoing productivity and profitability.

The approach taken was to appoint a personnel consultant well versed in new employment legislation and codes of practice and capable of participating in an innovative strategy for the dissemination, procedural transformation and implementation of new policies and procedures, working with a cross slice of staff and managing directors of the businesses. The approach as far as possible was to involve staff in:

• understanding new needs.
• assessing their impact.
• developing new procedures.
• building appropriate training methodologies involving self-learning wherever possible.
• communicating and consulting widely to gain involvement support and ownership.
• monitoring introduction and ongoing performance.

In so doing, the company wished to harness high performance strategies to ensure success. These involved:

• coaching.
• team working.
• training and development with emphasis on self learning.
• new communications technology.
• performance management approaches, especially targeting and goal setting.

Firstly, the personnel consultant reviewed needs with the Group Board and a plan was set to effect changes to meet all new employment legislation in a business positive way within a twelve-month period and to do so in a highly innovative way.

To achieve this very ambitious aim, it would be necessary to involve as many people as possible, which would widen the scope for creativity, enhance communications, create empowerment opportunities for everyone and maximise ownership of change. To put this process in place, a Steering Committee, comprising a number of managing directors and senior executives from the businesses, a main board director and the personnel consultant, was established. Its purpose was to approve new policies and procedures (or refer to the main board for approval, if appropriate), maintain the schedule set, facilitate and encourage full staff participation and to communicate change and successes on a regular and ongoing basis, in order to encourage more involvement. Basically, it wanted to get the job done and secure 100% support for a wide range of new employment arrangements, some of which were either controversial or sensitive.

Working parties were set up especially where new laws required substantial consultation and agreement.

Further, individuals were asked to become experts in specific procedures and arrangements. In these cases they would research the field, help write the procedures, undertake the training and monitor performance, or they would take responsibility for key activities like risk assessors, data security officers, fire officers etc.,

The personnel consultant acted as both catalyst and facilitator for these processes.

Process Examples

Steering Committee
The Steering Committee had a major role in investigating current practice, much of which had been informal and spontaneous. There were also marked differences of approach between different businesses and even between different operational units in the same business. This forum was exceptionally important to the project as senior executives often had to recognise that employment arrangements, benefits and practices had been generated on a succession of one-off, and mainly pragmatic decisions. Often they had not been responsible, but they had sufficient integrity, flexibility and responsibility to recognise there was not just a better way, but there could be a better result. So they went into the process with very open minds and a determination that uniformity and consistency would be a big plus in maintaining satisfied staff and adding to the productive use of staff in furthering the aims of the business. The Steering Committee therefore, adopted a 'Can do' approach, which minimised conflict but which certainly, on occasions, led to lively debate. It also determined that part of their business focus would be to support individual empowerment and the working parties.

One other innovative approach taken by the Steering Committee was to 'brainstorm' every conceivable employment question staff might ask (they brought their subordinate managers/staff into this activity), which enabled them to ensure that a set of policy/procedures would be developed which provided the answers to all the questions.

Working Parties
Staff employed within the company are well trained and highly resourceful and as a result the company experienced little difficulty in attracting staff to join working parties. The need for working parties was communicated through department/business unit meetings, and through advertisements on company notice boards. They have now been used extensively throughout the company but two early working parties particularly helped establish the innovative approach the company wanted. 

One was set up to develop a drugs policy after media attention had promoted a number of staff to ask what views the company held. Another was established to review the application of the Display Screen Regulations as part of the company's upgrade of computing equipment.

The approach they adopted, which overcame the negative effects of bureaucracy, was to develop procedures in such a way that staff were able and willing to take direct responsibility for ensuring they were understood and implemented.

It became apparent at an early stage that few staff had a sufficient knowledge of the subject either to make a meaningful contribution to the working party or to consult confidently with other staff. This problem was overcome in two ways. Individuals set off in their own way to obtain data by using an array of methods including the Internet, libraries, specialist organisations, and visits to other companies. The personnel consultant also researched ways of enhancing information retrieval. As a result it was decided that each new procedure would have an information or education and training document incorporated into it, so that staff could acquire the necessary knowledge through a self-managed learning process. This approach was taken whether or not there was a legal requirement, as, for example, was the case with i.e. Display Screen Equipment Regulations.

In fact, the working parties contributed many ideas to the structure of the process and the Steering Committee capitalised on that by laying down the new policy/procedure structure, which basically comprised:

• policy statement.
• procedures to adopt.
• information/education and training material.
• risk assessment
• staff adoption document

These different components took on different forms depending upon the complexity/sensitivity of the subject. So, for instance, when consulting on a new drugs policy, the information/education and training material took the form of 'story boards', which were displayed at the operating units. As well as providing information it encouraged a full dialogue with staff, which ensured that a practicable drugs policy was put together and, more importantly, was fully supported.

Working parties always comprised a cross slice of staff in order to obtain various perspectives. No constraints were placed upon dialogue. As often as possible working parties attempted to move forward on the basis of consensus, but they were business-like and focussed, knowing that outcomes were important.

Individual Contribution
The company has had a long-standing regard for the importance of training and its positive impact on performance. The company has developed a number of relationships with expert trainers to meet the technical skills of the business such as consultancy techniques, psychology of selling, interviewing skills, neuro-linguistic skills, sales and marketing skills. Additionally, staff are being introduced to management skills, especially leadership, decision-making and team working. So there are many individuals in the business who were very capable of making a significant contribution as individuals in their own right.

This contribution, based on company need, fell within three broad categories:

• information retrieval, which is discussed in the section on working party activities. 
• holding secondary offices
• undertaking risk assessments.

In order to comply with a number of legislative changes, the company needed put in place 'secondary office holders'. The best example to date has been the appointment and development, through the procedural process, of Fire Precaution Officers. Once appointed, they and the personnel consultant set up working parties to develop new procedures and arrangements. These have now been incorporated at all the operating units. Fire Precaution Officers, outside their legal duties of testing and training, review progress and make procedural amendments as needed.

At the time of writing, the company is reviewing the requirements of the new Data Protection Act with a view to establishing the secondary office of Information Security Controllers.

Finally, there were situations where the involvement of all staff was crucial for the effective and safe performance of the business and the avoidance of excessive and costly bureaucracy. Perhaps the best example of this approach is 'Risk Assessment'. Innovatively, these have been prepared on an all embracing 'defect basis, with instructions, so that each member of staff can assess risks and address any difficulties immediately with his or her supervisor. This process promotes staff empowerment and maintains focus on key working issues.

Individuals enjoy their involvement in developing new procedures. It has added to job interest, and satisfaction, enhanced performance and often-boosted motivation and re-kindled career drive.

Staff Adoption
The whole process of change has been constructed to ensure maximum staff involvement and ownership of the programme. To ensure successful 'close-off', members of staff complete a 'Staff Adoption Document' with each procedure. This document, which is openly displayed in the operating unit, carries the signature of staff against each policy/procedure, confirming that they know about, apply and support the procedure. As such, it is an 'open' training record too.

This approach greatly assists management with the induction of new employees, fits snugly with the company's approach to coaching and provides a constant reminder and record of training needs.

Technology
All the policies and procedures are available on the company intranet. A further novel approach, which defeats bureaucracy and gives a speedy response, has been to include on the intranet the question and answer programme developed through the Steering Committee. The company is currently considering whether it could make this service available to its customers as a new product.

Review

The company is well on the way to meeting its goals in terms of developing new safety and personnel policies without detriment to the business. The process has been very satisfying for staff, and the company, and has exceeded expectations in terms of innovation, cost effectiveness, staff and business performance and staff satisfaction.

Lessons

A number of lessons can be learned from the approach taken by the HR Group to introduce new employment legislation, cost effectively, and without damage to growth or profitability. These lessons fall within the areas of leadership, empowerment, team working, coaching, and performance management systems.

Leadership

Successful leadership is a critical element of implementing change.

Effective leaders will understand the difference between leadership and management and by so doing will set direction and goals and allow management, ably supported by staff, to achieve the goals.

Leaders should inspire staff to 'go the extra mile' by ensuring an environment is created which enables staff to use their talents, creativity and abilities to achieve successful change.

Leaders will permit risk to be taken in securing the best ways to manage change and will not be critical of failures, which inevitably occur during the process of achieving satisfactory results.

Leaders also have a vital role to play in communications, ensuring that successes are well communicated and used to spur further change.

Empowerment

Companies which believe in empowering their staff will recognise that most staff possess more skills and abilities than they are asked to apply in the normal scope of their work.

Further, most staff will give more and give quite freely, if asked. Often companies do not make the gains they should because they simply do not ask their staff.

Other key issues which underpin the empowerment of staff are:

• trusting relations.
• an environment, which encourages continuous learning.
• team support.
• tolerance of mistakes.
• recognition of both endeavour and results.

Team-working

Companies should remember that team working is not just a job activity, but is a problem-solving event and sometimes can even be a grievance or a social activity. So successful team-working is not just about multi-skilling team members, but about giving them a broad range of behavioural and management skills which improve their ability to communicate, organise, delegate, target, schedule, address conflict, coach, train, motivate and so on. The successful team will not just require updates on technical issues but also opportunities for continuous learning and application of behavioural and organisational skills.

Coaching

Coaching today is a vital and vibrant part of any successful company. The coach has to be the key link between the achievement of business goals and the progress of the individual. Successful coaching is based upon learning from both success and failure. It also requires approaches designed to overcome personal barriers, which can negate progress.

Above all, coaching should help people understand their true potential and show them how it can be realised.

Performance Management Systems

Performance management systems should not only measure business results but should also assess the performance of people - how they meet the goals that have been set for them; how they interact with others; how their general behaviour and conduct compare to ideal norms; how they are developing themselves; what aspirations they have; and what help they need.

Such performance appraisal, whilst challenging, can be the most exciting of activities and a great motivator. It may also be a real safeguard to companies in the current increasingly litigious society.

These are some but not all of the key issues. But critical to everything in key change programmes is ensuring that the people are part of the solution and not part of the problem.


This research paper has been reproduced by kind permission of Hugh Billot and NEBS Management.