Four secrets to success in a slow-growth economy

Western Australian businesses expect 2013 to be a tough one.

Recent data from the Commonwealth Bank – CCI Survey of Business Expectations shows that just 13 per cent of WA businesses expect the WA economy will improve over the next 12 months, while 45 per cent expect it to deteriorate. Significantly, wage costs were revealed as the number one priority for businesses in 2013 – just ahead of domestic and global economic conditions.

A quick round of crystal ball gazing by Australia’s top economists (facilitated by independent website Crikey) found that the general consensus was a slowdown in 2013.

We last experienced a business climate like this in 2009. Doom and gloom everywhere. Companies were going out of business on a weekly basis, and mass redundancies were happening almost daily.

It was during this time that I had the pleasure of working with TSG – a (then) small specialist consultancy based in Perth. TSG worked predominantly with large mining clients, helping them to simulate, analyse and optimise complex supply chains.

The directors were of the view that the post-GFC downturn presented an unparalleled opportunity for them to reinvent their business and lay the groundwork for future growth. They rejected the commonly held view that cost cutting and redundancies were the order of the day. Instead they believed that by taking informed, intelligent steps – they could distance themselves from the competition in the years to come.

Fast forward four years and this group has significantly increased revenues, is expanding internationally, has increased headcount significantly and has positioned themselves as a world leader in their field.

Here are some of the secrets to their success:

 1.       A focus on engagement and collaboration

The directors understood that high levels of engagement would:

• make it easier to attract talented people
• minimise unwanted staff turnover
• increase efficiency and innovation from their existing team
• reduce the ‘compensation premium’ required  to attract talented people

They took the opportunity to review rewards structures, training and development, organisational culture, the way work was organised and the way their people interacted and communicated.  Every change they made was aimed at promoting meritocracy, improving communication and increasing social interaction.

The result was much higher levels of engagement throughout the organisation.  This led to the delivery of exceptional work for clients, which of course led to repeat business. In fact over 90 per cent of TSG’s work is now on-going or repeat business.

More and more businesses are becoming aware of the benefits associated with a more engaged and collaborative workforce – and it is not as expensive or difficult to achieve as it may seem.

2.       Workforce planning

The company’s strategic plan involved an international expansion and a significant increase in headcount.  The directors knew that a key factor in the success of any new interstate and international offices was getting the staffing mix right.  Workforce planning was essential.  The directors forecast future staffing requirements to reveal potential gaps (staff numbers, expertise, and skills and abilities) and implemented the appropriate HR and recruitment strategies to achieve the desired outcomes.

The result was the successful opening and performance of interstate and international offices – all headed by suitably experienced directors or senior employees and backed up by locally sourced talent.  The directors also brought in a General Manager to provide input into and oversee the implementation of the strategic plan – allowing them to focus on leading their people and opening new offices.

Regardless of whether your crystal ball predicts growth or contraction in 2013 – workforce planning is an important step towards effective implementation of your business strategy.

3.       A new approach to performance management and communication

The company had an out-dated template that they used to facilitate their annual performance reviews.  Employees dreaded the process.  So did managers.  It was yielding almost zero value to the organisation and was chewing up a great deal of time and resources.

The directors decided to throw out the old process and move to a process that:

• was aligned with the company culture
• was simple and efficient
• focused on development and succession
• linked to incentives
• involved employees in setting objectives (aligned to company strategy)

The result was more regular and meaningful communication between managers and their teams.  Employees and managers alike now enjoy participating in the review process.  The company now benefits from increased efficiency of the process and improved communication within teams.  Unwanted staff turnover is ridiculously low.

With recent advances in social performance management software like Small Improvements, Work.com and WorkSimple, it is now even easier for employers to achieve similar results.

4.       Get serious about the recruitment process

With layoffs happening almost daily in both client and competitor companies – and given the group’s forecast workforce needs, the directors saw an unprecedented opportunity to grab good people.  But how did they know if they were recruiting the right ones?

Historically, the group relied on networks and contacts to source good people.  More often than not this was effective in their ‘home State’ of WA – but the directors knew they wouldn’t have this luxury in the future.

The directors looked to their existing team to identify:

• what personality attributes were (or were not) a fit for their culture?
• what cognitive abilities were required to ensure success?
• What technical skills or work experience were required?
• What motivated their best people to join and stay?

Once they had answered these questions the directors structured the screening, assessment and selection process to reduce risk and improve the odds of hiring the right people.

The key to long-term recruitment success is objective, fact based decision making and a robust recruitment process.  By doing this, companies don’t just recruit great people – they can also protect and enhance their employer brand.

So whilst the economic outlook may not be particularly rosy, times like these do provide opportunities to increase your company’s competitiveness and build its long term value.  Make the most of it!