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STARTING UP AND HUMAN CAPITAL MANAGEMENT (Part 1)

People Plus makes companies “agile” to be ahead of the changes in the market.

“When the changes in the market exceed the development within the company, the end is near” Quote by Jack Welsh.

Managing a business is like driving a motor vehicle:

  1. Keep looking through the windshield, not the rearview mirror, with occasional glances at the dashboard in front of you, this will ensure that you will get to your destination.

  2. Company development is a process, not an event, like a car journey that goes through many different types of terrain, so businesses face many challenges during their life.

  3. Focus on “Well Being” for all stakeholders, quantify these and work to achieve them.

The three conflicting driving needs prevalent in a start-up: These needs are:

  • The Entrepreneurial Need.

  • The Managerial Need

  • The Technical Need.

  1. The Entrepreneurial need: The need is all about being in charge of what has to be done, being creative, finding and creating the “value-added. This is predominantly present/future-focused

  2. The Managerial need: Pragmatic, systems-driven. There must be a plan in place, created from tried and tested systems, to maintain order, which then, in turn, creates predictability. This is mostly present / past-focused.

  3. The Technical need: Doing what is familiar, getting it done, and making sure it is done properly. Living in the here and now. To a large extent, present-focused.

One of these needs is usually predominant, and therefore creates conflict in how things are done. However, it needs to a symbiotic process where these needs are prevalent at appropriate times, with the subsidiary needs at that time not being forgotten or ignored.

Fatal Assumptions:

The entrepreneurial need for innovation is seen to be exclusively essential and will therefore drive the success of the business, which leads to constant changes, not related to the needs or wants of the paying customer. Lack of customer focus. Flexibility without stability


The managerial need is for pragmatic order and predictability, creating tension between the entrepreneurial need and the managerial need – innovation and systems. Stability without flexibility.


The Technician needs to emphasize that understanding the technical side of the work is most important, and therefore the understanding of the business. Unfortunately having a faultless production system on its own does not guarantee customer engagement on its own. There must be synergy between all the needs. Purification without integration not leading to growth.

Phases of Development:

Phase One: Infancy.

This is the Technical Phase: Most businesses must grow, and growth needs change, this often runs contrary to the technical needs, i.e. making sure things get done properly, or worse as they are being done now. The inability to change or change fast enough is what brings the business to a crisis point or even to an end.


Phase Two: Adolescence.

We might call this the Entrepreneurial phase where the owner decides to get some help with things he does not like to do or is unable to do. When these responsibilities are “abdicated” to the new person, disaster follows. Understanding delegation is key to people you need to bring to help, and make sure the helpers understand what is expected of them in terms of “outputs” i.e. they understand what they need to achieve. Not the process – but rather how to get there, because they already know the process.

This phase is driven by a change in perspective – with a clear picture of the market and what are the needs and wants of the customer. Without this, no business can succeed. This must be driven by the entrepreneurial need and supported by the managerial need and the technical need. It must be a balanced model catering for all three needs – some orderliness, getting things done properly, and satisfying the customer.

The Turn-Key Revolution:


Trade Name Franchise: Allows businesses to sell their products, Mercedes, Coca-Cola, etc. Based on the belief that the product sells itself. This is a decline because of the rapid rate of change in the market and the number of brands available.


Business Format Franchise: Built on how you sell not what you sell by providing the franchisee with an entire system of doing business.


Turn-Key Revolution: The true product of the business is the business.

How?

  1. Consistency of the value of the product & service to all stakeholders.

  2. The requirements of quality are ingrained at every level of the organization.

  3. The company must be known for the attention to detail.

  4. The attention to detail must be in every aspect of formal communication – all documents?

  5. This will satisfy the predictability of the product and service.

  6. Uniformity from people to product and service?

The Business Development Process:


Innovation: The most robust form of innovation occurs in highly participative teams based on their competitive culture. We in People Plus create and help manage the competitive cultures in all our companies with whom we work.


Quantification: To manage, we understand it is essential to measure the critical success factors so we can optimize the achievement in these. To best do this we take the Objective Key Results (O.K.R’s.) and cascade these into each person’s Job Profile. Then we take each O.K.R. and break it down into specific tasks and put these in Action Plans, which are reviewed monthly – i.e. short cycle reviews.


Orchestration: Performance Management is orchestrated through the “short-cycle-reviews” and the monthly results are reported upwards and consolidated at each of the higher levels. The checks and balances are written into the vertical and horizontal alignment of the O.K.R.. at every level of the organization. This ensures the highest levels of collaboration and co-operation amongst team members throughout the organization, as their development is linked to these results as well as the rewards. The better the teams do the better the individuals do.

Your Business Development Process:


Your Vision: Why the company exists and what you want to achieve in the next three to five years. A short sentence that is easy to understand and inspires people.


Your Mission: How we will get there or how will achieve the Vision?


Your Core Values: The beliefs that define the behaviors that drive the performance within the Mission.


The Observable Behaviours that support the values taken from the Performance Management Process of actual behaviors that drive successful, continuous achievement of OKR’s.


Research: Culminating in the P.E.S.T & S.W.O.T. Analysis


S.W.O.T. Grid: Where Strengths are matched with Opportunities. Optimized.

Where Weaknesses are matched with Threats. Minimized.


Your Strategic Objectives: (What you will be, not have) Points to be Optimised.

Who are our customers: Where do the opportunities exist? (Threats minimized)

The Management Strategy:


Creating and managing the Culture:

  • Starts with the Assertive Communication” Suite. (Inclusive of negotiation & persuasion, decision making & delegation, conflict resolution, and presentation skills)

  • “Smile” Programme: The key success driving behaviors are analyzed weekly by individual teams where behavior is evaluated against the successful output which it was meant to achieve. Every week, all the behaviors are clustered together and at the end of the “Smile” program all the behaviors are entered into the code of conduct (C.O.C.) The behaviors in the C.O.C. are then aligned with the Core Values. This is a bottom-up process, guaranteeing more realistic behaviors within each Core Value.

  • Performance Management: Business Plan; Job Profiles; Action Plans leading to the dual development of Performance Appraisal and Performance Evaluation.

Assertive Culture: Drawing from the widest possible base within teams by encouraging all team members to contribute positively within meetings and in this way is the foundation for the participative culture.


Participative Culture: This is created based on the assertive culture where team members have the courage to participate in the discussions during the meeting as well as constructively criticize points that do not make sense or seem to be lacking in objective evidence. This results in more robust outputs during the meetings. All are pulling together towards the same outputs


Performance-Based Culture: Vertical & Horizontal alignment of O.K.R’s


Performance Management Process:


- Performance Appraisal: Learning & Development managed through short cycle reviews


- Performance Evaluation: Rewards & Recognition managed the information in the database


- Annual Development Review: Feedback and Disclosure

Marketing Strategy:


Sales reporting daily to marketing on the developments within the market. Based on this information regular research is established to confirm these findings.


“This isn’t a Cook Book of instructions, but rather a collection of principles that lead to success”

You can learn more about the PeoplePlus Incubator Hub program, by clicking here. Or contact us here.
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