Driving Enterprising Change with MIA and DEC – The Business Case Brexit Looms – Will you change or fail?

Barbara Hankins MSc Catalyst for Change

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Bridge the Gap between Workforce ‘Cost’ and their ‘Value’ Introduction

To many companies ‘success’ means increasing profits year-on-year, yet to many employees ‘ideal’ organisations have a focus on people. Applying a ‘people lens’ should be second nature.

What will Brexit mean to you? Will you struggle to get by, trying to do more with less, low productivity, problems

with employee engagement, yawning skills gaps and ever increasing costs OR have you decided to take the bull by

the horns and address all those problems you have put off dealing with because you realise that if you don’t you

may not have a company left to worry about?

Such problems are symptomatic of how we treat people. A constant focus on ‘the numbers’ or ‘the bottom line’

will only ever raise the issues that they create – just like problem solving only ever brings yet more problems to

solve.

Business people tend to forget, fail to acknowledge or just ignore that companies are comprised of people – living

breathing people. Your people can be your most valuable business asset and it is the kind of working environment

that its leaders create that dictate whether they are motivated enough to perform at their best, reach their

potential, be fully engaged and achieve the organisation’s strategic goals.

According to current research the most pressing people issues for SMEs are:

Managing employee expectations – Retention issues

Poor productivity – the growing pains of Growth

Finding employees to hire with the right skills – Recruitment & Selection issues

Building Leadership capability – essential for growing companies

Two of the greatest challenges facing organisations involve Leadership and Change Management, each of which impact on the working environment and require effective communications. Organisations lose out on both talent and profit if communications are poor and productivity is impacted if what management says is happening is not what employees at lower levels actually experience.

Employee engagement requires a participative leadership style which has belief in employee development and provides a supportive approach and fosters involvement. Employees who are uninspired or unsupported will just leave. You therefore need to understand whether you are successfully achieving your objectives and whether you have effective leaders in the right positons.

Can you identify with any of these issues? Perhaps the following questions will provide you with some insight:

1. Is your business strategy informed by your talent strategy?

2. Do you have an inclusive bottom-up culture?

3. Are people told what to do?

4. Do you know what skills you will need in the next five years that you don’t currently have and do you know how you will get those skills? Do you know what skills you already have?

5. Do you know the ‘intrinsic value’ of your people and whether they are achieving your strategic objectives?

So are you happy with the status quo or are you prepared to consider an alternative to ‘business as usual’?

Context

In the 20th Century 60% of a company’s total worth was based on its tangible assets – equipment, technology, facilities, equipment and resources. In the 21st Century the economic recession of 2007 highlighted the necessity for an important change in focus to the intangible assets – brand, customer relations, ability to innovate, talent management practices and culture and leadership – which comprise 65-85% of its total value (Human Capital Institute 2009).

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The impact of recession resulted in short-term thinking and planning and ‘cost-based’ decision making – what used

to be 5-10 year plans shortened to 3 year plans although many companies thought twice this time before making

people redundant and instead made agreements such as a shorter working week or foregoing annual salary

increases.

As the country gradually recovered companies gained more confidence and developed growth plans. Alongside

this the capability of technology began to gain pace changing the way many industries operated, some seeking to

outsource to reduce costs, and a growing emphasis on the customer invisibly changed the traditional hierarchical

structure to a lateral, end to end process.

A lack of understanding of these subtle changes, alongside increasing globalisation that highlighted the importance

of competitive advantage together with the lack of workforce planning and impending retirements created the

perfect storm that became the Skills Gap.

Rationale

From ‘Cost’ to ‘Value’

In an ideal world companies would be able to identify in their financial accounts the ‘intrinsic value’ of their people. For many companies this does not yet happen as they are entered into the accounts as a ‘cost’.

Because that is the case, when times are hard and companies need to revise their strategy, such decisions are based

on cost alone without full understanding of the value of their workforce. This has probably come about because

‘people’ are not normally on the Board Agenda.

The Perception Gap

The ‘elephant in the room’ is one of perception.

The way people perceive they are treated, be they employees or customers is a fundamental measure of an

organisation’s success and will be of major importance once Brexit comes into force.

Management Boards will openly state their business objectives and believe in reality that they are being achieved

– many employees however will equally state that their experience or understanding of those objectives is

completely different.

Management often states that ‘our people are our greatest asset’ yet employees are still seen and accounted for

as a ‘cost’ in the annual accounts and have often been the first to be ‘cut’ in hard times

Alternatively a company may have been on a journey towards IIP yet two days before the IIP flag had been raised

they made 200 employees redundant

The resulting perception gap can be enormous and serves to emphasise and reinforce the state of employees’ morale, engagement and extent of their perceptions of HOW a company truly regards its employees and whether it keeps the promises it makes, as well as demonstrating the depth of their understanding of what the company is trying to achieve.

Is this what is known as being successful in the workplace? Not always regrettably.

This has to change to recognise the value in a motivated workforce, with investment in effective People practices, alignment to business strategy, improvements in productivity and innovation leading to a more competitive and sustainable business.

To be successful in the marketplace companies need to be successful in the workplace, but how easy is it to do

that? Usually it is about Change and as we know many change initiatives have not been successful.

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Why Change is required. What are the issues?

From Cost to Value creation

When companies perceive their workforce as an asset then they become an ‘investment’ that encourages Added

Value, increases Opportunity Cost and contributes to achievement of their Strategic Objectives.

Achievement of those objectives depends on the level of engagement that employees have with the company:

They need to know that they are valued by the company, that their ‘voice’ is heard and that they can develop within their existing roles and be developed into future ones

Intrinsic motivation is fundamental to sustaining competitive advantage in this knowledge intensive and technology transformational Era

The Culture and Working Environment created by a company’s leaders is fundamental:

The key driver to an enterprising culture is supportive leadership that fosters an open, participative and collaborative environment

This intrinsically motivated organisational capability has at its heart a talent strategy that recognises that an Organisation IS its people

It is people who turn strategy into reality, given the right vision, direction and leadership; and focus on the

drivers influences the organisation’s ability to meet its business objectives

Culture Change

An Enterprise Culture creates a working environment built around Clarity of Vision, Values and Behaviours, drawn

from those long-term questions asked in the Boardroom and which form part of a Board Level People Strategy.

Long-term thinking and planning would have produced such questions as ‘Where will we position our business in

10-15 years’ time?’ ‘What will the required skills look like?’ ‘How will they have changed from present day and how

will we get them?’ ‘How can we retain the loyal people we already have?’ ‘What do we need to do to help them

upskill?’

Developing such a culture takes time and focus and must have the support and willingness from all aspects of the

business if it is to be successful.

The benefits can outweigh the effort required and include improved attendance, retention, increased performance

and productivity and improved competitiveness and innovation which demonstrate quality and increased

profitability.

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Financial Argument for Change - Opportunity Statement

Case Study example:

Scenario: SME Manufacturer, 120 employees, loss making £500k, poor Industrial Relations - restrictive practices, no HR, hierarchical structure, one site, competitive marketplace, high manufacturing costs

New Vision: Complete restructure of manufacturing operation, investment in new plant, equipment and processes

to support increased competitiveness, increase market share and increase exports

Missing pieces of the Jigsaw: Strategic HR, Transformational Culture Change

CfC People Interventions:

Introduced Strategic HR Framework to align business strategy with an invigorated business working environment and a new people strategy providing an operational model comprising:

Strategic Objectives

Culture Change

Recruitment & Selection and Retention

Mobility and Flexibility

Communications

Working Environment

Employee Engagement

Outcome: The numbers – 6 year period following Interventions

Turnover increased 51%, Operating Profit increased 38%, and Revenue per Employee increased 85%: Attendance also increased from 90% to 98.5% in one year

Plus: 65% retention of 85 new staff after six years, 9% of whom celebrated their 21st Anniversary with the company.

This is what is known as ‘being successful in the workplace’

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CfC’s Change Model

The Tools for Change – MIA & DEC - Objectives MIA measures the perception gaps whilst DEC measures the gaps in strategy and practice

Provides knowledge and understanding of existing people practices and gaps therein

Visualisation of Workforce profile and Working Environment

Clarity on the employee experience, their perception and Board Level People Strategy

Results Dashboards support people related decision making

The MIA™ (Motivating the Individual to Achieve) Strategic Diagnostic tool measures the intrinsic

motivation perception gap between what management says is happening and what employees actually

experience and identifies the extent of an individual’s motivation to achieve their part of the

organisation’s objectives that is influenced by the management style and leadership they experience on

a daily basis.

The MIA Dashboard The results of the survey questions are presented in dashboard format in a variety of ‘pleasing to the eye’ graphics

providing valuable core information on such topics as ‘Why Managers and Employees get out of bed in the

morning?’, ‘Is this the Culture you think you have?’, ‘Employees Perception of Change’, ‘Can Employees believe

what you say?’ amongst others.

It also provides a further graphic on the difference in perceptions between Managers and Employees. Our approach brings a depth of data and offers the following benefits:-

Understand the composition of your workforce

Understand what inspires and motivates your employees

Measure where you are now

Identify where you need to be and what it will take to get there

Realise the full potential of your organisation and employees

Enable targeted training investment

Improve retention

Increase self-knowledge and awareness

Improve the learning environment

Become known as a great company to work for

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The DEC™(Driving Enterprising Change) business model tool measures the extent of your People & Practices

and Metrics and how they impact Competitive Advantage, Profitability, Quality and Innovation.

The DEC Dashboard

The results are presented graphically via the DEC dashboard and highlights the extent to which you value your

people as your company’s greatest asset and measures the gap in understanding between the CEO and Senior

Directors’ team.

Putting People & Profit on the Same Page emerges from a philosophy that ‘no-one should leave a job without being

equipped with transferrable skills that would lead to further, if different, employment or the ability to be self-

sufficient’.

The Strategic Thinking behind the philosophy is that Profit-driven agendas do not always take ‘people’ issues into

account. Short-term thinking can put businesses into poor decision making at just the time it is essential for the

business to identify and develop new skills. Many companies become risk averse, resist change and hide behind

the comfort of ‘business as normal’; and it’s only when customers and employees desert them that they realise

anything is wrong. (Source: People & Profit on the Same Page’ published article)

The Alignment

The Benefits

Minimise unnecessary consultancy costs:

- Self-supported business improvement - Graphic dashboard enables clear visualisation - Create a unique competitive advantage

Putting people and profit on the same page: - Financial Metrics enable cost savings - Unlocks potential and innovation through talent development - Full engagement enables them to achieve company goals - Being given responsibility and autonomy releases initiative and ensures quality - Personal work goals are aligned with a compelling vision

The work environment is co-operative, collaborative and encourages innovation

TESTIMONIAL: MIA & DEC Tools Pilot tested 2016/17

‘Barbara has played an instrumental role in our review of People Management & Development providing

a high quality survey and assistance in an ongoing capacity. We'd highly recommend Catalyst for

Change's services to anybody wishing to reflect on how their employees are perceived and wish Barbara

all the best.’ Vivienne Findlay, Managing Director, HotelShop 5th May 2017

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About Catalyst for Change

What we do

In business for over 25 years we help SMEs to improve their competitive advantage through their most

valuable asset, their workforce.

We have established a good reputation with all our clients and across sectors including the NHS,

Manufacturing, Not for Profit, Media, and Tourism; as well as SMEs and individuals.

We provide value for money alongside quality services through excellent interpersonal skills and with a

unique reputation for helping people accept the need for change.

We are passionate about doing what is best for an organisation and its profitability whilst ensuring that

employees benefit from personal effectiveness, development and engagement.

We have designed and created graphic models to measure Intrinsic Motivation and People Practices to

demonstrate to companies the value of their workforce. We can also create bespoke models i.e. to

visualise business processes that identify where a company may be losing money and to introduce

analytics to enable future trouble-shooting of business performance.

Major interests include sustainable human development, motivation, leadership and performance

improvement; and we use Data-driven insights and live business issues to achieve successful outcomes

for workforce optimisation.

We keep at the forefront of our professional practice with thought leaders such as Deloitte, McKinsey,

KPMG, HCI (Human Capital Institute) and HCMI (Human Capital Management Institute) to bring selected

successful practices to the SME Sector.

We have published papers on both the DEC (The Intangibles of Business: People & Profit on the Same

Page) and MIA (Intrinsic Motivation: The Key Drivers to an Enterprising Culture) models in the

International Journal of Professional Management.

We demonstrate our expertise via Case Studies with Testimonials, on our website.

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Our Mission – People & Profit on the Same Page

Why?

o Critical skills shortages dominate the headlines

o Worldwide shortage of talent with 25% of new hires leaving within first year (it costs circa 150%

of employee’s salary to replace – Inc.com)

o Companies rely on outdated approaches to talent management and suffer lack of competitive

advantage

o Short-termism dominates behaviours through Quarterly earnings

o Thousands of young people want work, yet 34% of employers say workforce is not young enough

and 60% struggle to recruit tomorrow’s leaders (The Prince’s Trust)

What for?

o Planning ahead to anticipate skill needs

o Creating entry level work and interesting, progressive career pathways

o Reaching into education for skills required – collaborating with Further Education to meet your

needs

o Develop your own workforce, it makes sense, benefits include improved engagement,

performance and profitability, all of which contribute to your competitive advantage

o Long-termism realigns business with integrated 21st Century People Development and

transformational leadership

How?

o MIA™ Strategic Diagnostic Tool

o DEC™ Innovative Business Model Tool

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Contact

For more information about this article or about Catalyst for Change, please contact:

Barbara Hankins MSc Founder, Consultant & Mentor

Catalyst for Change +44 1299 896911 / +44 7802 654249 Barbara(at)catalystforchange.co.uk

Website: http://www.catalystforchange.co.uk

LinkedIn Profile:

Twitter: https://twitter.com/BarbaraHankins1

Barbara is an Alumni of Anglia Polytechnic University (now Anglia Ruskin), a Founding Member of

Advised in Worcestershire, an Ambassador for NWEDR, and a Member of EMCC and HCI