Achieving sustainable organisation performance through HR ......their organisation’s performance. Achieving sustainable organisation performance through HR in SMEs A CIPD online

Help using this tool

This tool will help you:

• put people management and HR strategies into practice within an SME

• identify what people management activities are working well and build on your achievements to increase the contribution people make to the organisation as a whole

• envisage what else you can do to support the transition process for an SME that needs to change and develop.

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Achieving sustainable organisation performance through HR in SMEs

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Achieving sustainable organisation performance through HR in SMEsA CIPD online practical tool


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Who is this tool for?

• those with responsibility for people management practices within an SME • owners/founders and senior managers in SMEs who are committed to maximising firm

performance by developing sound people management practices• consultants whose remit includes advice and support for owners or top managers in SMEs.

Benefits of using this tool

For you:

• Apply the findings of SME-focused research about the people factors needed to sustain performance or transition.

• Review the way people management can add value to the organisation, both now and in the future.

• Identify internal factors and opportunities for HR to further support and manage organisational performance.

For your organisation:

• Establish a framework for supporting organisation transition and development through effective people management activities.

• Ensure clarity about the people management issues that affect your organisation’s performance.• Develop sustainable yet flexible people management practices appropriate to a smaller organisation.

This tool has been written by Simon Turner and Dr Valerie Anderson from the University of Portsmouth



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Toolmap


Benefits of using this tool

Tool map

Introduction

Instrument 1: Organisation 'stock-take'

Instrument 2: Tackling transitions between SME stages of development

Instrument 3: Developing awareness of the importance of alignment

Instrument 4: Developing expertise about people management

Your action plan

Useful related CIPD resources

Further reading and references

Useful weblinks

Case study: Paul UK

Case study: Growth phases at Harrod UK

The four stages of SME transition

Viewpoint: Can HR make a strategic contribution in SMEs?

The vital role of SMEs and the importance of people management

Meeting your development needs



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Introduction

In 2012 the CIPD published insights from research into Achieving sustainable organisation performance through HR in SMEs. The research examines the vital role of people management in small and medium-sized enterprises (SMEs) to sustain performance through different stages of organisation transition. It explores how practices and approaches need to change as SMEs develop their products, services, markets and effectiveness. Furthermore, it provides insight into the way people management issues affect the long-term performance of an organisation.

This practical tool, which is based on CIPD leading-edge research, provides support for individuals and organisations who want to get the most from their people and support their business through times of transition and development. It is intended for those who have responsibility for aspects of HR and people management even though their job title may not include the words ‘human resources’.

We include interesting case study illustrations throughout the tool. Some of the case study organisations involved in the research are still SMEs. Others are now larger, but through researching these organisations we were able to look back at their stages of growth and chart the people management challenges and opportunities they encountered, which has been particularly valuable. We also include quotes and reflections from other business leaders and entrepreneurs who either currently work in SMEs or whose career has largely been in SMEs, although they may currently work in a larger organisation.

This tool provides an opportunity to reflect on, anticipate and respond in a timely way to the opportunities and challenges faced during such transitions to enable long-term performance.

HR, people management and performancePeople in the organisation make a direct impact on SME performance. Therefore those responsible for people management can have an immediate impact on the organisation’s adaptability, productivity and profitability. As SMEs adapt and change, people management activities need to be reviewed to ensure the organisation is ready for new opportunities.

Although large organisations may have established and ‘professional’ HR functions, the integrated approach used in SMEs often means that there may not be an ‘HR specialist’. Therefore, in this tool, the terms ‘people management’, ‘people development’ and ‘HRM’ are used interchangeably. The tool seeks to avoid using HR jargon; it is relevant to both HR specialists and to all those who have an interest in the way people performance can be maximised in support of their organisation’s performance.


Find out more about the vital role of SMEs and the importance of people management.


http://www.cipd.co.uk/hr-resources/research/achieving-performance-hr-sme.aspx


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What’s in this tool?

This tool enables those with responsibility for people management to take a strategic view of their organisation’s current stage of development and diagnose the most appropriate people management approach. As differing circumstances call for different responses, this practical tool will help you to consider what is most suitable for your context, both now and in the future.

The tool comprises four separate instruments, with practical exercises, illustrative case study examples and action planning facilities. We suggest the order below for completing the tool, but it doesn’t have to be completed sequentially. You may find some instruments of more relevance to you than others, and you can navigate between sections using the tool map. In addition, further sources of information that you may find useful are included at the end of the tool.

Instrument 1: Organisation ‘stock-take’This instrument is a diagnostic tool to help you clarify your organisation’s current position on our model of SME transition. Each stage of transition is associated with different people management approaches.

Instrument 2: Tackling transitions between SME stages of developmentThis instrument focuses on how to anticipate and respond to ‘inflection points’ to support long-term organisation performance, providing you with ideas about the people management opportunities presented at these dynamic times.

Instrument 3: Developing awareness of the importance of alignmentThis instrument focuses on skilfully aligning people management practices with the owner/leaders’ organisation vision for the future. It will help you achieve insight about whether your people management approach will support long-term performance and how to make the most of opportunities presented.

Instrument 4: Developing expertise about people management This instrument enables you to decide what skills and capabilities both you and others in your organisation need to develop as your people management approach changes and evolves over time.

Action planThe tool provides an action plan to help you identify and take forward key actions to make a sustained improvement to performance in your organisation.

This tool also contains detailed case studies from Paul UK and Harrod UK, which took part in the CIPD research on SMEs.



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Instrument 1: Organisation ‘stock-take’

The research on which this tool is based highlights four distinct stages of SME transition that attention needs to be paid to, each characterised by different people management issues and opportunities.

Between each phase are ‘inflection points’, reflecting a time when practices that have worked to date are no longer suitable for the organisation’s current needs or future direction. The extent to which people management practices can change and adapt in these times will have a direct effect on the organisation’s ability to move successfully to a new phase of development. It is through anticipating and responding to the opportunities and challenges presented by transition that a direct contribution can be made to firm performance.

Figure 1 illustrates the four broad transition stages that SMEs will encounter, each associated with different people management approaches. A critical first step is to ensure that HR is measuring the right things. The design and development of relevant HR metrics requires reflection and discussion in order to determine what it takes for the organisation to succeed and to understand how HR can add value. Three issues underpin effective measurement:

• aligning measurement with goals• taking a business partner perspective • adding value by focusing on building capability.

Entrepreneurial edge

Emergingenterprise

Consolidatingorganisation

Establishedorganisation

Figure 1: Four stages of SME transition characterised by distinct HR issues, with inflection points between each stage


Find out more detail about this stage



Inflection points




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Although Figure 1 depicts the four forms of organisation sequentially, SMEs are dynamic and complex; they evolve, grow and develop at different rates and in different circumstances. Small and medium-sized enterprises can enjoy sustained high performance in any of these stages. In addition, they can move forward or backward between the phases, by conscious choice, such as in response to changing market conditions.

“ In 2009, when the recession hit, we decided actively not to grow. We’d been going growth, growth, growth so we stepped back. It was about every department pulling together and focusing on making our business robust.”Manager, Paul UK

An organisation may choose to remain in one stage over time, but with movement to another stage, people management practices will also need to change.

Your organisational ‘stock-take’This instrument involves identifying the ‘position’ of your organisation on our model of SME identity and transition. This exercise can help you to assess whether your current people management approach is right for your business needs. The statements in the ‘stock-take’ derive from our HR in SMEs research findings reflecting the key aspects of each stage of SME transition.

It may be useful to take another look at the characteristics of each of the stages here:

• entrepreneurial edge

• emerging enterprise

• consolidating organisation

• established organisation.


Find out how Paul UK has developed over time through different stages of organisation transition.

Find out what happens after these four stages of SME transition.



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Identify the position of your organisation against each of these indicators.

Disagree Agree

1 2 3 4 5


No formal HR or people management roles are allocated.

People management issues are dealt with by the owner/entrepreneur.

Owner’s vision and values alone drive practice.

Recruitment is ad hoc, based on immediate skills requirements.

The organisation structure is fluid with flexible job roles.

Emerging enterprise

Training is informal and in response to urgent and important skill needs.

Some people management policies and processes are required because consistency (or lack of it) is becoming a problem.

People management issues are operational and focused largely on day-to-day employment tasks only.

Team structures are in place, with people having defined job roles to avoid duplication of effort.

Communication is more formal but still tends to be face to face.

People management is mostly a reactive process in response to challenges that emerge.

Consolidating organisation

The people management approach is more forward-looking, systematic and planned.

The organisation’s vision and values are formally expressed.

People management practices reinforce the direction, values and goals of the organisation.

A more strategic approach to reward is adopted, aligned to the organisation’s goals, such as performance-related pay or profit-sharing.

CONTINUED



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Identify the position of your organisation against each of these indicators (continued).

Disagree Agree

1 2 3 4 5

Consideration is given to the long-term skill requirements of the organisation, including multi-skilling staff.

Management development is becoming a priority.

Employee engagement is an area of attention, with an engagement survey introduced.

Formal processes ensure two-way vertical communication between employees and managers.

Established organisation

People management practices and approaches support longer-term business development priorities.

The organisation’s vision and values are ‘the golden thread’ through ‘everything we do’.

Internal collaboration is a priority area, breaking down functional divides to facilitate knowledge-sharing.

Horizontal communication between functional teams is encouraged, alongside vertical communications.

In terms of employee engagement, attention focuses on the drivers of engagement and understanding the reasons behind the scores.

Thought is given to people’s career development, perhaps through succession planning or establishing talent programmes.

A focus on management development shifts to leadership development.

Attention focuses on the external as well as the internal business context.

Take the opportunity to reflect on your responses. Agreement with the statements might suggest that your organisation is in one of the SME transition stages. Outlying responses that don’t fit a pattern may require further reflection and discussion with colleagues. For example, it may be that you are at an ‘inflection point’ between stages.


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You are encouraged to complete the ‘reflection and application’ section below, which asks probing questions based on your responses to this instrument. What you type here will automatically be transferred to the end of the tool to form your own action plan.

In Instrument 2 we will focus on how to tackle transitions between the SME stages. We look at these ‘inflection points’ and what they mean for people management practice. If you are firmly within one stage, it is still important to look ahead to the next inflection point to ensure your organisation is prepared for the future and that performance is not undermined by having a people management approach that no longer suits your business needs. But if you have found that your responses straddle two SME transition stages, it is likely that you are already at an inflection point.

Instrument 1: Reflection and application

Take a moment to reflect on your responses to this instrument.

1 Where do you see the ‘position’ of your organisation? To what extent would others in your organisation reach a similar conclusion?

2 Are there any outlying responses that require further reflection? Who else in your organisation might you need to discuss your findings with to decide if the outlying responses are appropriate for your business direction and needs?

What you enter into this box will be automatically transferred to the action planning section towards the end of this tool.



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Instrument 2: Tackling transitions between SME stages of development

Between each of the four stages of SME transition that we have already discussed, there are what we term ‘inflection points’. Inflection points represent a time where current practices are no longer suitable for the organisation’s needs or future direction.

These inflection points between phases of SME development require clear thinking and an appropriate response. A key insight in the CIPD research about HR in SMEs is that anticipation of impending inflection points is the key to effective practice. Thinking ahead about opportunities and challenges on the horizon will put the organisation in a stronger position and avoid hitting a ‘crisis point’.

Most importantly, the research asserts that transition points represent an opportunity to look beyond immediate, quick-fix actions and build a tailor-made solution to ensure a ‘cultural fit’ going forward with the vision and values of the organisation.

Innocent’s rapid business growth led to a need to recruit people fast but those involved were determined to ensure the right people (not just the right number of people) were hired:

“The success of our business rests so much on the capabilities of our people as well as our culture. Managing high-volume recruitment was a priority coupled with strategic work to lay the cultural foundations for the business. In practice that meant a consideration of ‘what type of capabilities enable people to be successful here?’ This resulted in an articulation of the skills and talents which would be valuable to the organisation now and for the long term. This substantial piece of work incorporated consideration of diversity and preservation of Innocent’s founding principles and values.”Karen Callaghan, People Director, Innocent

At inflection points, and as the organisation grows and the operating context changes, as well as adapting approaches, it is often necessary to let go of those practices and processes that no longer support the organisation’s vision and priorities.




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“Never be too frightened to try something and then drop it if it doesn’t work. Sometimes the fear of failure can stop you doing something or it can make you carry on with something, despite it clearly not having any support.”Derek Burton, Director, Cougar Automation

However, when facing transition points it is also important to identify and retain the particular advantages of being an SME, such as knowledge-sharing, cross-functional working and being close to the customer, that larger organisations may strive at great cost to embed.

Anticipating and responding to inflection pointsThis instrument enables you to focus on your impending inflection points, when factors that require change will start to be more pressing than the factors that rely on the ‘status quo’. The instrument below enables you to form a change action plan that suits your situation. You may like to also take a look at the CIPD resources on approaches to change which address this issue.

The issues presented at the inflection points are different depending on which stage of transition you’re currently in. By clicking on the appropriate link below, referring to the current stage of SME transition you are in (or the one you are most predominantly in), you can look ahead to the key issues associated with your next inflection point. You may need to refer back to your responses to Instrument 1 to see which stage of SME transition you identified you are currently (or predominantly) in:

• entrepreneurial edge

• emerging enterprise

• consolidating organisation.

If you are in the established organisation phase, it is likely that you are bordering on the transition from being an SME to being a large organisation. Therefore the inflection point issues you are likely to be facing are different from those faced by organisations in the heart of the SME organisation classification. Our Shaping the Future programme of work uncovered six key insights about what you need to pay attention to for long-term performance, which may be more relevant to you.


Find out about how Harrod UK has grown and developed over time, retaining the key aspects of their organisation that add to their competitive advantage.

Read more about our Shaping the Future programme of work.


http://www.cipd.co.uk/hr-resources/practical-tools/change-approaches-building-capability-confidence.aspx

http://www.cipd.co.uk/stf


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Transitioning from ‘entrepreneurial edge’ to ‘emerging enterprise’

Issues associated with the ‘entrepreneurial edge’ to ‘emerging enterprise’ inflection point

How important and urgent is this issue for your organisation? (Red: issue requires attention) (Amber: worth looking out for quite soon) (Green: not an issue)

What actions will you need to take to address this issue?

Who needs to buy into this change? How can this be achieved?

This column to remain blank if the green button has been checked

Informal owner/manager-led approach is starting to reach its limits.

Absence of systems and processes means consistency of output is an issue.

Fast recruitment of operational staff is required.

Speed and consistency of training is becoming of paramount importance.

Transitioning from ‘entrepreneurial edge’ to ‘emerging enterprise’If you are currently in, or predominantly in, the entrepreneurial edge stage of SME transition, there are specific challenges and opportunities that are likely to be on the horizon if you choose to transition to the next stage of ‘emerging enterprise’. This instrument will help you to look ahead and plan a course of action.

Use the traffic light system in column two to indicate the relevance or importance of each presented issue. Red refers to issues that are important and require immediate action. Amber refers to issues that could be important soon. Green indicates that the issue is not currently of concern. For those issues you have rated as red or amber, you are then asked to consider the various prompts for action in columns three and four.


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Transitioning from ‘entrepreneurial edge’ to ‘emerging enterprise’ (continued)

Issues associated with the ‘entrepreneurial edge’ to ‘emerging enterprise’ inflection point






Operations are chaotic, with duplication of effort.

People desire greater certainty about reward.

Employees' expectations of the employment ‘package’ are changing.

Personal interaction with the owner/founder becomes less frequent, making communication sporadic and inconsistent.

Other issues

1

2

3


Take a look at the issues associated with the next inflection point

Continue to my action plan

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Transitioning from ‘emerging enterprise’ to ‘consolidating organisation’

Issues associated with the ‘emerging enterprise’ to ‘consolidating organsiation’ inflection point






The introduction of too many systems and processes limits innovation and autonomy.

Unplanned hiring is creating a bloated organisation.

With a bigger workforce, investing in management skills is becoming critical.

With less personal contact with the owner/founder, organisation values are becoming diluted and the vision blurred.

Transitioning from ‘emerging enterprise’ to ‘consolidating organisation’If you are currently in, or predominantly in, the emerging enterprise stage of SME transition, there are specific challenges and opportunities that are likely to be on the horizon if you choose to transition to the next stage of ‘consolidating organisation’. This instrument will help you to look ahead and plan a course of action.



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Transitioning from ‘emerging enterprise’ to ‘consolidating organisation’ (continued)

Issues associated with the ‘emerging enterprise’ to ‘consolidating organsiation’ inflection point






The level of formality being introduced is eroding the initial entrepreneurial spirit.

Too-prescriptive job roles are stunting innovation and agility.

The absence of two-way communication is becoming an issue for staff.

Other issues:

1

2

3


Take a look at the issues associated with the next inflection point

Continue to my action plan


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Transitioning from ‘consolidating organisation’ to ‘established organisation’

Issues associated with the ‘consolidating organsiation’ to ‘established organsiation’ inflection point






Different teams or departments are not working together, which is causing problems.

Employees desire a clear career path.

Tensions are evident between the reward expectations of ‘old hands’ and ‘new recruits’.

Learning and development is driven by the HR function or equivalent, with little employee ownership.

Transitioning from ‘consolidating organisation’ to ‘established organisation’If you are currently in, or predominantly in, the consolidating organisation stage of SME transition, there are specific challenges and opportunities that are likely to be on the horizon if you choose to transition to the next stage of ‘established organisation’. This instrument will help you to look ahead and plan a course of action.




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Transitioning from ‘consolidating organisation’ to ‘established organisation’ (continued)

Issues associated with the ‘consolidating organsiation’ to ‘established organsiation’ inflection point






The current organisation structure will not accommodate future growth.

Horizontal communication between teams is limited, with attention focused on vertical communication.

Other issues:

1

2

3



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Take a few minutes to reflect on your responses to Instrument 2.

1 What areas require most urgent consideration? To what extent would your diagnosis be shared by others? What information is needed to find out more about the extent of the ‘problem’?

2 What factors inhibit moving forward with the issues you have identified? How might you tackle these? Who would be a useful ally in getting support to tackle these issues?

3 What factors would encourage change? How can you make sure that encouragement outweighs inhibition? Who needs convincing? What information do you need to make a persuasive case for change?




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Instrument 3: Developing awareness of the importance of alignment

This instrument focuses on developing awareness of the need to skilfully align people management practices with the owner/leaders’ organisation vision for the future. Addressing a critical issue uncovered in the SME research, this instrument will help you achieve insight about whether your people management approach will support long-term performance and highlight those aspects that may not be appropriately aligned which might make it difficult for the business to move forward.

In order to achieve alignment between people management practices and the organisation vision and direction, CIPD business-savvy research indicates that a key HR capability is to be ‘close to the business’ to develop the right people management approach and practices for your organisation.

“It’s about talking to people, going out there and seeing what is required and understanding what it is your company wants. Is your company looking at growth? Does your company want stability? Do they want to make the business robust? That’s going to make a difference. Understand your company’s ethos and values. ”Learning and Development Manager, Paul UK

“HR has to interpret the interests of the shareholders and what they expect. HR needs to understand what’s needed, have the courage to take that forward, have the skills to persuade and a framework of thinking that has the confidence of the CEO. ”Peter Blausden, Group HR Director, Morgan Crucible

There is an important dual-delivery task which involves coupling:

a) an understanding of the owner/founder’s aspirations and vision for the organisation, and their expectations of people management

with

b) a detailed diagnosis of people management issues that need to be addressed.

This ‘dual delivery’ task is illustrated in Figure 2.




http://www.cipd.co.uk/hr-resources/research/business-savvy-giving-hr-edge.aspx

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Figure 2: HR’s dual-delivery task in SMEs

Owner/founder’s vision and expectation about people management

Diagnosis of current and future people management issues

Clarity throughout the firm about organisational purpose and values to set direction and guide transition is a necessary feature of SMEs. The owner/leader’s founding vision and values form the bedrock of the organisation, but CIPD research highlights the danger that occurs if the initial vision and energy of the founder(s)/owner(s) becomes diluted and even disappears over time.

“We want to keep the family feel and our family values. Formally articulating the values helped to communicate them to staff and further embed them into the business … Harrod UK’s ethos of family values underpins all HR procedures and ways of working.”Hazel Stimpson, HR Manager, Harrod UK

This instrument enables you to work out ways of achieving alignment between the owner/leader’s aspirations, guiding vision and values and the people management issues that need to be addressed. With the possibility that there is a limited leadership appetite for the more intangible HR issues in the early days of the business, you will need to skilfully co-deliver both of these agendas for long-term performance.

Lesley Cotton, HR Director at P&O Ferries, contributed her experience in SMEs to the ‘Comments and Insight’ page at cipd.co.uk. Read Lesley’s advice about how HR can make a strategic contribution in SMEs. In particular, how do you achieve alignment between business leaders’ priorities and the people management agenda?




http://www.cipd.co.uk

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This instrument has two steps. The first step involves articulating the owner/founder’s aspirations: their vision and expectations. Your answers to the probing questions in step 1 will set the scene for step 2 of this instrument. The second step encourages you to develop insight about the alignment between the owner/founder’s aspirations and your people management practices and approach. You will then be asked to reflect on your responses in this instrument to identify areas that require urgent attention.

Step 1: Owner/founder’s aspirations This part of the instrument encourages you to define the guiding vision and expectations held by the owners/founders of the organisation. Place your formal, and/or informal, responses to the prompts in the text box below.

Step 2: Achieving insightIn this step you are asked to indicate whether you agree or disagree with a list of statements which probe the extent of alignment between the owner/founder’s aspirations and your people management practices and approach. Based on our research in SMEs, ‘disagree’ responses may indicate areas that require attention.

What are the owner/founder’s vision and values for the organisation?

Do you know the owner/founder’s expectations about people management?



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Internal context for people management activities

Disagree Agree

1 2 3 4 5

Owner/founder’s vision and values

The owner/founder(s) provides clear direction for the business.

The owner/founder(s) has clearly articulated the organisation vision and desired values.

We understand the owner/founder’s expectations about people management.

The owner/founder(s) is open to discussions about the people management needs of the organisation.

We know how we will balance the expectations of the owner/founder(s) with delivering on the people management necessities for our business.

How embedded are the vision and values?

Employees easily identify with the organisation’s vision and values.

Our values underpin the way we take forward our people management processes.

Those responsible for people management challenge behaviour and actions that are not in line with the organisation’s culture and values.

We know how we will encourage employees to connect with our organisation vision and purpose as the organisation changes and develops.

People management decision-makers

People management decisions rest with those responsible for people practices and line managers, rather than just the owner/founder(s).

Those responsible for people management have a good understanding of wider organisational issues.

Those responsible for people management in the organisation are trusted advisers to the owner/founder and challenge people management decisions where necessary.

Those responsible for people management in the organisation think ahead and formulate plans to deliver on the future people management requirements to achieve the organisation’s visions and goals.



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1 Overall, how aligned are people management decisions with the owner/founder's vision and aspirations for the organisation?

2 Looking at your ‘disagree’ responses (where you have checked columns 1 or 2) in the instrument, which responses highlight issues that may undermine the long-term performance or growth of the organisation? Which are most important and urgent to address?

3 Who do you need to be in conversation with? Who is crucial to involve if change is to be achieved? What are the key issues from their perspective?

.

CONTINUED



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Instrument 3: Reflection and application (continued)

4 Are there particular people issues that you feel need to be addressed for the long-term benefit of the organisation that are not on the owner/founder’s priority list?

5 Finally, build an action plan to deliver clearly identified outcomes that will be attractive to the most influential people in the organisation.


Building on the insight and action plan developed through this instrument, Instrument 4 will now look at some of the key skills and capabilities required by those responsible for people management practices and approaches in SMEs to help put the plan into practice. Whatever your current level of capability, it is hoped that Instrument 4 will provide some useful developmental suggestions to help with your continued professional development.



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Instrument 4: Developing expertise about people management

People management expertise is vital in SMEs because people are the business. Whether people management is the responsibility of someone with HR explicitly in their job title or not, the CIPD research in SMEs has revealed specific skills and capabilities required of those working in the area. These skills and capabilities are in addition to the necessary technical capability in people management/HR, which we don’t cover here.

If you are looking for practical step-by-step guidance on every aspect of HR and employment law, take a look at the CIPD’s HR-inform resource. It covers what you need to know, do and ‘how to do it’ and features model policies and procedures, letters and forms that you can customise, interactive ‘how to’ flowcharts, plus best practice tips and handy calculators.

Within SMEs a creative approach is needed to ensure that those responsible for people management processes and decisions are able to pursue their continued professional development.

This instrument draws on insights from the CIPD’s HR Profession Map, which examines the underpinning skills, behaviour and knowledge that HR professionals need to be successful and add most value to their organisation. The HR Profession Map defines different elements of each of these behaviours and links them to four bands of professional competence which represent different stages of professional development, from ‘delivering people management fundamentals’ to ‘leading HR’.

Amongst a range of different qualities and capabilities within the HR Profession Map that the CIPD has shown to be important for all HR professionals, there are two behaviours which our research revealed are particularly pertinent for those with responsibility for people management in SMEs:

curious

skilled influencer


Click here for a brief overview of the CIPD’s HR Profession Map



http://about-hr-inform.cipd.co.uk/

http://www.cipd.co.uk/cipd-hr-profession/hr-profession-map/


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Developing curiosity and influencing skillsYou are invited to review your own stages of development and self-assess against these two behaviours. You might choose to discuss your responses with a trusted colleague or seek out other forms of objective and evidence-based feedback to guide your responses. We provide some development suggestions you may like to consider, both generally and with specific reference to developing your curiosity and influencing skills.

CuriosityEach row of the table below addresses a different aspect of the behaviour ‘curiosity’ and is divided into four boxes, reflecting the four levels of professional competence, ranging from ‘delivering people management fundamentals’ to ‘leading HR’. The four levels of professional competence are not mutually exclusive; each builds on the previous one in the row, so you need to choose the box which most closely resembles your current stage of development and confidence.

Delivering people management fundamentals Leading HR

Are you interested in finding out about the organisation and the connections between wider organisational issues and your own role?

Do you actively seek ways to develop understanding of organisational and sector issues and developments?

Do you keep up with and anticipate emerging organisational and commercial issues and developments?

Do you proactively develop deep insights into the commercial and strategic context around your organisation?

Are you inquisitive about current issues and developments within people management and the HR community, and how they impact your own current practice?

Do you keep up to date with issues and trends in HR, bringing insights to the organisation to evolve and improve advice and solutions?

Do you connect with others in HR/people management roles and benchmark what you do against other similar organisations to bring best practice ideas and innovations back to benefit the organisation?

Do you connect into the SME or wider HR community to debate and shape people management activity and practice and develop leading-edge insights for the organisation?

Do you develop your understanding of issues to take account of underlying causes?

Do you consider issues or opportunities from a number of angles, based on your experience, intuition and knowledge of the organisation?

Do you extend references/sources to include the views of others outside the immediate or most apparently relevant frame of reference?

Are you able to shed light on big issues that others have not spotted or don’t want to see, through probing, digging deep and asking ‘why’?



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Do you reflect, analyse and test ideas and insights with others?

Do you seek or create opportunities to test new ideas or innovations?

Are you able to skilfully balance risk and innovation in trialling new ideas or translating insights into action?

Do you foster inquisitiveness in the organisation, resulting in new lines of thinking, original insight and breakthrough ideas in the business?

Are you open to trying new ideas and taking change on board? Are you willing to keep trying, even if you do not succeed the first time?

Do you drive yourself and support others in working outside of your ‘comfort zone’ and allow room for failure?

Do you adopt a continuous learning approach, showing interest and curiosity in new ideas and opportunities and allowing time to build success?

Do you promote and sponsor a culture that supports experimentation, continuous improvement and innovation?

Are you driven to understand how people in various organisations or contexts react or behave differently in a range of circumstances?




To further develop your skills and capabilities in this area, we suggest some practical development ideas to address any gaps you have surfaced in the activity above.



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Further developing your curiosity

Curious: being future-focused, inquisitive and open-minded to seek out evolving and innovative ways to add value to the organisation.

Take a moment to reflect on your responses to the instrument above, which focused on the behaviour of ‘curiosity’. Which column are most of your responses in?

You may want to take a look at the development suggestions associated with the column your responses are predominantly in, as well as the next column along to set yourself stretching targets.


Development suggestions associated with column 1






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Skilled influencer Choose one box from each of the rows to identify which behaviours most closely resemble your current stage of development and confidence. The boxes within each row are not mutually exclusive; each builds on the previous one in the row.


Do you seek to understand how to influence within the culture, governance frameworks and politics of the organisation?

Are you able to take account of culture, governance frameworks and politics within your influencing and delivery approach?

Are you able to build relationships with key current and future influencers, working within and around politics and formal processes?

Are you able to secure consensus across a range of complex stakeholders and in sensitive and challenging situations?

Do you use logical persuasion, backed by evidence to support your opinions or proposals?

Do you take steps to understand and consider the diverse opinions of involved parties ahead of a proposal?

Do you have a comprehensive stakeholder map to understand the interested parties and the diversity of their views?

Are you able to systematically map the complexity of interactions and relationships, views, values and motivations of key stakeholders?

Do you compare and contrast options to highlight relative advantages and disadvantages of progressing along alternative paths?

Do you address potential and anticipated reactions and resistance by using a flexible communication and influencing approach?

Do you seek out stakeholders ahead of a key interaction or meeting to understand their points of view or concerns, and gain early support and buy-in?

Do you develop and pursue a strategic internal and external influencing plan, at individual and organisation levels?

To further develop your skills and capabilities in this area, we suggest some practical development ideas to address any gaps you have surfaced in the activity above.



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Do you identify the key points to communicate on any interaction, selecting the right channel for the message and audience?

Do you identify the key points to communicate on any interaction, selecting the right channel for the message and audience?

Are you able to make complex or ambiguous issues clear for others, enabling people to participate in debate and discussion?

Do you communicate in an authoritative, engaging and compelling way, leaving a clear and memorable message?

Do you seek to understand yourself and how you differ from others in style, approach and beliefs?

Do you proactively develop understanding of different people and adjust your own behaviour and approach to manage impact on others?

Would you say you have deep insights into your own style and impact and are you adept at reading and influencing a variety of people?

Are you able to build your own, the senior leadership and the wider organisation’s ability to understand themselves and their impact on others?

Further developing your influencing skills

Skilled influencer: demonstrating the ability to influence to gain the necessary commitment and support from diverse stakeholders in pursuit of organisation value.

Take a moment to reflect on your responses to the instrument above, which focused on the behaviour of ‘skilled influencer’. Which column are most of your responses in?

You may want to take a look at the development suggestions associated with the column your responses are predominantly in, as well as the next column along to set yourself stretching targets.








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1 Which capabilities are a particular strength for you and which make a positive difference to your organisation?

2 Summarise the priority development area(s) you choose to focus on. What are the key HR skills you need in your current organisational context?

CONTINUED


Find out more about the HR Profession Map if you feel that there are other aspects of your professional development in HR that you would benefit from finding out about.

Click here to find out about other suggestions for learning and development helpful for SMEs.



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3 Consider how you might achieve these development priorities. For example, what are your preferred learning styles and methods? What opportunities are there for knowledge exchange with others in similar organisations with responsibility for people management? Do you have specific HR development needs that require attention through some form of structured learning intervention?




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Your action plan

You can use this part of the tool to review your responses to the instruments and plan your next steps. Because the development of excellent people management in an SME is an important organisation-wide concern, it is important that others, for example the owner/founder and senior leaders, are involved in identifying priority issues and actions.

It is also important to appreciate and share the best of what is already happening and to apply insights from good practice to address improvement areas wherever they may be found. If you have not already added ideas for action elsewhere in this tool, you can add your ideas here.


1 Where do you see the ‘position’ of your organisation? To what extent would others in your organisation reach a similar conclusion?

2 Are there any outlying responses that require further reflection? Who else in your organisation might you need to discuss your findings with to decide if the outlying responses are appropriate for your business direction and needs?



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1 What areas require most urgent consideration? To what extent would your diagnosis be shared by others? What information is needed to find out more about the extent of the ‘problem’?

2 What factors inhibit moving forward with the issues you have identified? How might you tackle these? Who would be a useful ally in getting support to tackle these issues?

3 What factors would encourage change? How can you make sure that encouragement outweighs inhibition? Who needs convincing? What information do you need to make a persuasive case for change?



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1 Overall, how aligned are people management decisions with the owner/founder's vision and aspirations for the organisation?

2 Looking at your ‘disagree’ responses (where you have checked columns 1 or 2) in the instrument, which responses highlight issues that may undermine the long-term performance or growth of the organisation? Which are most important and urgent to address?

3 Who do you need to be in conversation with? Who is crucial to involve if change is to be achieved? What are the key issues from their perspective?

.

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4 Are there particular people issues that you feel need to be addressed for the long-term benefit of the organisation that are not on the owner/founder’s priority list?

5 Finally, build an action plan to deliver clearly identified outcomes that will be attractive to the most influential people in the organisation.



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1 Which capabilities are a particular strength for you and which make a positive difference to your organisation?

2 Summarise the priority development area(s) you choose to focus on. What are the key HR skills you need in your current organisational context?

3 Consider how you might achieve these development priorities. For example, what are

your preferred learning styles and methods? What opportunities are there for knowledge exchange with others in similar organisations with responsibility for people management? Do you have specific HR development needs that require attention through some form of structured learning intervention?



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Having considered the information above, my immediate priorities for action are:

Priority for action Support/resources needed for effective action

1

2

3

4



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Useful related CIPD resources

CIPD. (2010) Next Generation HR: Time for change – towards a next generation for HR.

CIPD. (2012) Business savvy: giving HR the edge.

CIPD. (2012) Responsible and sustainable business.

CIPD. (2012) Sustainable organisational performance.

CIPD. (2011) Approaches to change.

Further reading and references

CASSELL, C., NADIN, S., GRAY, M. and CLEGG, C. (2002) Exploring human resource management practices in small and medium sized enterprises. Personnel Review. Vol 31, No 6. pp671–82.

DEPARTMENT FOR BUSINESS, INNOVATION AND SKILLS. (2011) Business population estimates for the UK and regions 2011 [online]. Sheffield: Department for Business, Innovation and Skills.

EDWARDS, P., GILMAN, N., RAM, M. and ARROWSMITH, J. (2003) Public policy, the performance of firms and the ‘missing middle’: the case of employment regulation and role for local business networks. Policy Studies. Vol 23, No 1. pp5–20.

GREINER, L.E. (1972) Evolution and revolution as organizations grow. Harvard Business Review. Vol 50, No 4. pp37–56.

HARNEY, B. and DUNDON, T. (2006) Capturing complexity: developing an integrated approach to analysing HRM in SMEs. Human Resource Management Journal. Vol 16, No 1. pp48–71.

LOMBARDO, M.M. and EICHINGER, R.W. (2006) The career architect development planner. Minneapolis, MN: Lominger Ltd.

RUTHERFORD, M.W., BULLER, P.F. and MCMULLEN, P.R. (2003) Human resource management problems over the life-cycle of small to medium-sized firms. Human Resource Management. Vol 42, No 4. pp321–35.

Useful weblinks

http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/index_en.htm

http://www.smallbizpod.co.uk/sevens/topics/management-and-people/

http://www.acas.org.uk/index.aspx?articleid=924



http://www.cipd.co.uk/research/_next-gen-hr/_time_change_next_generation.htm

http://www.cipd.co.uk/hr-resources/research/business-savvy-giving-hr-edge.aspx

http://www.cipd.co.uk/hr-resources/research/responsible-sustainable-business-hr-leading.aspx

http://www.cipd.co.uk/hr-resources/factsheets/sustainable-organisation-performance.aspx

http://www.cipd.co.uk/hr-resources/practical-tools/change-approaches-building-capability-confidence.aspx

http://www.bis.gov.uk/assets/biscore/statistics/docs/b/business-population-estimates-2011_statistical-release.pdf

http://www.bis.gov.uk/assets/biscore/statistics/docs/b/business-population-estimates-2011_statistical-release.pdf

http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/index_en.htm

http://www.smallbizpod.co.uk/sevens/topics/management-and-people/

http://www.acas.org.uk/index.aspx?articleid=924

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Case study: Paul UK

Case studies from CIPD research

Founded in 1889, Paul is a family-owned traditional French bakery and patisserie, now managed by the fifth generation. They now have more than 500 shops worldwide, 330 of which are in France and 30 in the UK. The Paul philosophy is very simple: excellent bread depends on excellent ingredients and time-honoured methods of production. They still make their bread by hand in their own bakeries every day, which takes seven hours. In addition, the Paul food range includes croissants, pain au chocolat, pastries with traditional fillings and a delectable patisserie range.

2004Paul set up operations in the UK in 2000 with two shops. In 2004, with plans for expansion, it became clear that attention needed to be paid to ensuring consistency of operations between shops. At this time there were no HR policies or procedures and so a training manager was recruited.

‘You walked into the shop, we interviewed on the shop floor as you came in. There was no HR team. There were no training manuals, no policies, no procedures. It was just two shops being run as they were. So my role was to primarily focus on putting in L&D tools in order to train people.’ Training manager

2005In 2005 six shops were opened and, with the need for consistency of operations still of paramount importance, the training manager produced workbooks for staff. These were developed together with operations staff.

The Paul Academy, the in-house training and development programme, was also started in 2005. There are a number of levels to progress through, including certificate, diploma and master’s levels, which form the structure of a career path. ‘Recruit from within’ is the preferable approach to recruitment, with people building on their product and business knowledge as well as people management skills through each stage of their development.

‘We have a career path that lives and breathes. We have the ability to take people through to operations manager level, and a lot of our team members have come up through the ranks in our Rising Star programme and the Academy.’ Training manager

2006This was a significant year for the HR team because an HR director was recruited. One of the first things she did was to put a structure around the existing HR practices and procedures, working with her HR team to ensure these were the right approaches for the business in the long term and that they supported Paul UK’s vision.

‘You need to understand the business vision and cultural vision of the founders. HR needs to build on the founders’ story.’ HR director

However, a key concern was to not stifle creativity through putting too many, or too prescriptive, systems and procedures in place. Furthermore, with ten further shops opened in 2006, the HR team has worked hard to retain the close relationship the training manager established with both the shop and operations managers in the early days.

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Case study: Paul UK (continued)

‘Visibility throughout the business is important; if you’re to have the good conversations, you need to have a good understanding of how the business works. You need to be close to the business, asking managers what they need, what the issues are and how HR can help.’ HR director

And HR having a deep understanding of how the business operates is essential to ensure that what HR does is really adding value. For example, in recruitment decisions: ‘You get to know what shops are like and the people they need, so when you interview somebody you are thinking if that person will be relating to that shop. You have the shops like Regent Street, which is a touristy area, and South Kensington and Gloucester Road, which are more French, and you have the more village stores where customers are local and want to have a chat and a slice of cake with their coffee.’ Recruitment manager

An HR toolkit for managers was developed with HR policies and resources tailored to the language of the business. With good people management being essential to high-performing shop teams, getting this toolkit in place quickly was imperative. In a 24-hour business, HR won’t always be on the end of the phone, so FAQs were included in the toolkit for each HR issue.

2007 Five shops were opened in this year. A priority area of focus was management development, and training was put in place to enhance managers’ business knowledge and people management skills.

2008A recruitment manager was appointed who refined the recruitment process, further improving efficiency and effectiveness. And aligned to the career path structure already in place, via the Paul Academy, monthly succession planning meetings were started.

2009No shops were opened in 2009 as the business decided to take a step back, consolidating operations: ‘In 2009 when the recession first hit us we decided actively not to grow. We’d been going growth, growth, growth so we stepped back and focused on making a robust business and going back to basics and that was really about every department pulling together to give that robustness in order to weather the recession.’ Training manager

During this time, HR focused on building skills, especially management capability: ‘As a manager you need product knowledge [200 products], management skills, business understanding and people management skills.’ Store manager

And with the current size of the business, more formal communication was needed across stores. The HR team started an internal newsletter, which helped to further build Paul’s employer brand.

2011A competency framework was put in place, articulating what a Paul person looks like. The competencies are clearly aligned to the founders’ vision and values and were developed in partnership with the business. The four-strong HR team spoke face to face with 26% of Paul UK staff. They got great insight into what people think of Paul, and through the data-gathering process they were able to write the framework in the language of employees. This competency framework is woven through all HR processes, contributing to a very consistent employment brand and customer experience.

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Case study: Paul UK (continued)

The challenges and opportunities aheadCurrently Paul has 30 shops in the UK, with further shop openings expected this year. A recruitment co-ordinator has been appointed to support the volume of recruitment. In terms of learning and development, the HR team feel that a learning culture has been established, with training and development owned by the business. A learning club has been set up, enabling employees to take even more ownership of their own development.

As the business expands further, HR will need to continue to adapt to the needs of the business. And the HR team are already thinking about the skills and capabilities they will need as the business continues to expand. In addition, retaining a close link with the founders and their vision and values for the organisation is a further challenge, but something HR is addressing, threading the values through all HR activity, making them an integral part of business processes. The family owners’ visits to Paul shops are extremely valued by staff.

Overall, Paul UK maintains a balance between delivering in the short term and having an eye on sustainable performance – for example, focusing on consolidation in 2009 to ensure they are in a good position for future growth, as well as through anticipating the challenges and opportunities faced with opening more stores, both throughout the UK and worldwide. The continued closeness of HR to the rest of the leadership team and to the operational side of the business enables them to anticipate future recruitment, talent management and learning and development needs.



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Case study: Growth phases at Harrod UK

Harrod UK manufacture sports ground equipment and netting for schools and clubs throughout the UK. Their products can be found at international venues and events including Wembley, the Millennium and Twickenham Stadiums, Santiago Bernabéu and Dubai Sports City. Harrod UK were the sole suppliers of football goals and nets, and hockey goals, nets and shelters to the London 2012 Olympic and Paralympic Games. Harrod are a family-owned business founded in 1954 and based in Suffolk. Their philosophy is to invest in the business to achieve controlled growth through a total commitment to quality and customer satisfaction. In 2004 Harrod Horticultural was established, with the same focus on product design and development to produce quality gardening products. Harrod UK and Harrod Horticultural are stand-alone businesses in their own right, but their premises stand side by side and many staff work across both on a seasonal basis.

In the late 1980s Harrod UK faced a transition point as they had grown very quickly, with a limited formal structure in place. Stephanie Harrod, the managing director, introduced a team-based company structure which, together with direct staff involvement, helped improve motivation.

‘I decided to take on the HR responsibilities mainly because I was very interested in how can I motivate our shop floor staff who have probably never been asked for their ideas, really never had any involvement with senior management. There was actually a government initiative that we signed up for called “Managing Change”; I knew that we needed to change. If we hadn’t done it there is a high chance that we wouldn’t be here. That is how important it was to us to start then. We had grown far too quickly and we had no formal structure in place.’ Managing director

In 1990, an organisation restructure was essential as fast growth meant the company had become bloated. The decision was taken to involve staff in this large-scale organisation change, drawing on their experience and ideas.

‘One project that we did was completely reorganising the warehouse and we got all the people around this table actually and said – what do you think? This is a plan of how it looks now, how do you think it would work?’ Managing director

A team-based company structure was introduced and people were involved in determining how work was shared out, which had a positive effect on motivation levels. Another key challenge at this time was to engage managers with the new way of working, encouraging them to adopt a more involving and motivating management style.

But despite all the changes in the business at this time, the Harrod family was determined to retain the core family values on which the business was built: high levels of integrity, trustworthiness and support for each other, as well as a clear focus on customer service. The visibility and accessibility of the Harrod family in the business has helped to ensure these values are maintained and remain a fundamental part of the way Harrod operates.

In 1997 the manufacturing director at Harrod UK adopted a company-wide approach to business planning, further embedding a culture of employee involvement. With a growing workforce, a more formal approach to retaining the essential two-way communication between employees and leaders was needed. He started off-site business planning meetings where the strategic team presents the overall business strategy and goals, encouraging everyone to ask questions and put forward their ideas of how the strategy can be achieved in practice:

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Case study: Growth phases at Harrod UK (continued)

‘We have business planning meetings with both the strategic team and shop floor and we have an action plan for the coming year. We’re always looking at ways of reducing costs and staying number one in the market. When an order comes in we want to say, “yes, we’ll do that next week”, no matter what it takes. We don’t want to say, “yes that’ll be six weeks”. Literally, we’ll do whatever it takes.’ Line manager

2004 marked a significant milestone for Harrod UK, as Harrod Horticultural was established: ‘Diversification was a significant priority eight years ago. A massive objective of the business was to get Harrod Horticultural to be a stand-alone business in its own right and so financially secure and not relying on the sports side of the business.’ Managing director

With this diversification of the business, significant attention was paid to creating an effective workforce planning strategy, resulting in an agile workforce. Multi-skilling was a priority to be able to flex staff between the two divisions, with Harrod UK and Harrod Horticultural being seasonal businesses.

In 2006 an HR manager was recruited, who was previously Harrod’s office manager, so knew the operational side of the business well. The HR manager first concentrated on putting a structure in place around the existing HR practices, ensuring they were aligned with Harrod’s values: ‘Harrod UK’s ethos of family values underpins all HR procedures, ways of working and relationship management.’ HR manager

Developing management capability became a key priority for the HR manager, who works closely with line managers both in an advisory capacity and to develop people management capability, such as with performance management. The HR manager came into the role with a good understanding of the operational side of the business. She strongly believes in the need to retain her close relationship with all departments as the company grows, as it will enable her to respond to business needs, both now and in the future.

The company continued to grow and evolve, and in 2007 it became evident that knowledge-sharing between different business functions was an area that needed attention. Cross-functional team meetings were introduced to keep people informed, encourage teams to share information and help to problem-solve.

In 2009 the HR manager reviewed the existing recruitment process for agency staff, who were recruited during peak periods, and examined the key skills needed to ensure that the people taken on could be up to speed on the job as quickly as possible: ‘We take on lots of agency staff during the busy times in the spring months, for picking, packing and warehouse duties. They have to be trained very quickly as they are only here for about three months. It has to be a rapid selection process.’ Line manager

The opportunities and challenges aheadManagement development remains a core focus for Harrod UK. Currently manager training focuses on ‘motivation, appraisal and business skills’, but future development will also focus on soft skills training with an emphasis on coaching.

With further business growth will come the opportunity to offer career progression: ‘The growth of Harrod Horticultural has been the significant objective over the last five years and now it is a similar size to Harrod Sport, which is where we were looking for it to be. The vision now is to double the size of it. We will take on more people, and there will be opportunities. At the moment what we can’t have unfortunately is career progression, but that would be really great to do.’ Managing director

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Case study: Growth phases at Harrod UK (continued)

Overall, Harrod UK has strong family values which form the bedrock for how they operate, and they are conscious of the need to retain their family values as they get bigger. Staff involvement and having engaging managers is deemed essential to business success and is championed by the leadership team. Going forward, the HR manager continues to invest in the people management capabilities of line managers, focusing on what have traditionally been termed the ‘softer skills’ as well as ensuring that the right people processes are in place that reinforce Harrod’s values and are aligned to long-term business goals.



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The four stages of SME transition, characterised by distinct people management issues


Emergingenterprise

Consolidatingorganisation

Establishedorganisation


This stage is characterised by high levels of informality; strategy is emergent rather than formally planned and the owner’s vision and values drive practice. Very little to do with people management is written down in organisations at this stage of development; there are fluid structures and flexible job roles. Organisations at this stage of development rely heavily on people’s implicit ‘know-how’; training takes place on the job and through experience. People at the top of the organisation make decisions about pay and reward and it is unlikely that anyone will have formal responsibility for HR; instead, people management issues are usually dealt with by the owner/entrepreneur.

Emerging enterprise

This organisational form is usually characterised by a greater formalisation of the organisation's structure (including team structures and more formalised job roles) and the introduction of some procedures and processes to achieve more operational consistency. At this stage of development people start to realise that employment issues need to be managed more effectively to achieve consistent performance and it is likely that there will be a need for some HR policies and processes. However, the need for more consistency has to be balanced with the requirement to be able to react quickly to immediate issues (for example, a need to recruit and train people quickly to fulfil a new business order). Therefore, flexibility remains important.



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Consolidating organisation

Many organisations reach a stage in their development where business leaders ‘take a step back’ and reflect on what the organisation is achieving as well as the future business direction. At this stage of development business strategy may be more planned than emergent and the challenge for those responsible for people management is to make sure that employment and management practices support the achievement of the organisation’s goals and are aligned with the organisation’s strategic direction and values.

In line with an acceptance of the need to think about the medium and long term, an implication for organisations at this stage of development is the need to think more about career development, and more specifically management development, both as a retention tool and to provide the talent basis needed to sustain performance. Organisations at this stage often find they need more layers of management and that operational functions are more dispersed and less mutually dependent. Therefore, two-way communications (once ‘automatic’) now have to be more systematically organised to ensure that the right messages are being communicated and that employees still feel their views are heard. A more systematic approach to engagement is often evident at this stage of development linked to an alignment of reward with longer-term business goals.

Established organisation

A key issue at this stage of development is cementing a focus on the long-term performance of the organisation and this requires those responsible for people management to have a deep understanding of the organisation’s unique context, an extensive knowledge of the market in which it operates, the business strategy, and the capabilities or weaknesses of the organisation. Organisation culture, engagement and cross-function collaboration will also be key issues. The organisation’s vision and values need to be the ‘golden thread’ through all practices and approaches. A total reward package is common at this stage of development with attention focused on financial and non-financial rewards, including job enrichment and talent development. Many companies recognise that they need to shift their attention from management training to leadership development.



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What happens after these four stages of SME transition? Although ‘established organisation’ is the last stage of SME transition presented in Figure 1, this stage is not the end of the journey. As organisations continue to develop and change, the challenge of pursuing sustainable performance persists and so the importance of reviewing and aligning the organisation’s people, financial, environmental and societal contribution over time remains a top priority for those responsible for people management.

Two of our major research programmes at the CIPD have examined what sustainable organisation performance means in practice. Shaping the Future presents ten key insights about what will really make the difference for long-term performance. Next Generation HR is more specifically centred on HR and looks even further forward, emphasising the importance of HR creating a living strategy that responds to macro trends and opportunities.








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Can HR make a strategic contribution in SMEs? – viewpoint from the CIPD’s Comment and Insight area of the websiteBy Lesley Cotton, HR Director at P&O Ferries

Yes, but only if HR leaders have the confidence to perform as an integral player in the top team, take risks and perform a multifunctional role.

‘Can HR make a strategic contribution in SMEs?’ Surely this is a rhetorical question. However, in order to ensure the answer is ‘yes’, we should reflect on the behaviour and characteristics of the HR director, as the HR department will be a reflection of the HR leader.

Although I currently work for a larger organisation, for a significant part of my career I have worked in SMEs. I believe the starting point to ensuring a strategic contribution is made is to perform the role of business director before the role of HR director. Driving strategic, commercial HR delivery can only occur when the HR director truly understands the business, the commercial levers, the key performance indicators and the impact of creative HR practice on the bottom line. Demonstrating the strength of your contribution is critical to underpinning the value you bring to the profitability of the business. It sounds fairly obvious, but speaking the commercial language of the organisation is essential – drop the HR jargon!

Therefore, the first question to ask is how serious a ‘player’ are you within your business? Are you involved in the decision-making process or are you simply requested to deliver certain objectives? Are you truly seen as a business director? Or are you simply the director that has expertise in all matters HR? Do you find yourself quoting employment law and somehow performing the role of blocker as opposed to enabler?

An essential ingredient is the personal desire to continually learn, improving your overall business knowledge, the confidence to ask questions without feeling inadequate. I can remember feeling uncomfortable at my very first board meeting. Of course it is daunting, but clearly there is a requirement to quickly ‘up-skill’. It is essential to demonstrate knowledge outside of your specialism in order to develop and maintain credibility; it isn’t enough to only raise and contribute to the HR issues at the board table. I spent time with the group finance director to familiarise myself with the cash flow statement and the balance sheet. We’ve chosen the HR profession, it didn’t choose us – the fact of the matter is that in the majority of businesses, understanding the ‘bottom line’ and demonstrating that you have the ability to take action to improve this will result in your personal success, and that of your team. Good HR directors can bring thoughtful and insightful contributions; the best also recognise that saying ‘no’ doesn’t excite commercial colleagues. Offering options with associated risks, costs and a recommendation is always a more productive option.



http://www.cipd.co.uk/comment-insight/

http://www.cipd.co.uk/comment-insight/

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In reality, in a small or medium-sized business, the size of the ‘top team’ will require all members to play a strategic role – having the confidence to perform as an integral player is a ‘must’: take risks, be prepared to perform a multi-functional role. Formulating and creating the business strategy has to be a natural role for the HR director while also being intrinsic to successful delivery. This will then naturally provide the opportunity to demonstrate the value of the HR discipline to business success.

Essential ingredients to strategic success include: adapt your approach, grow the top line, take costs out, challenge the ‘norms’, bring new thinking to the debate, demonstrate vision and creativity, never lose sight of your values while being prepared to take tough commercial decisions and, if there is an exit plan, understand the timelines – this will have a major impact on priorities and budget.

Positioning HR as a proactive commercial driver rather than a pedestrian service provider gives true job satisfaction to the strategic HR leader. An HR team that is recognised within the business as central to the strategic delivery and the commercial decisions, with sound HR knowledge and expertise, will be highly regarded and respected.

In an SME with limited resources, the harsh reality may well be ‘shape up or ship out’ and this environment doesn’t suit everyone; but for those who want to primarily be a business director with a foundation of sound HR knowledge and expertise, the job is hugely satisfying.

In summary, to ensure that HR without doubt makes a strategic contribution within SMEs, you must:

• demonstrate:

Strength

Motivation

Energy

• be:

Straightforward

Multifunctional

Enterprising

• havehighonyouragenda:

Service

Making money

Entrepreneurial approach.

The question may arise – ‘why not move into a commercial role’? However, I believe with people at the centre of all business success, great HR business directors will have an amazing impact on the strategic direction and overall business success, so the HR director role is the most effective role to be in. However, I would say that, wouldn’t I?!



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The vital role of SMEs and the importance of people management

SMEs are vital for jobs, future economic growth, productivity and innovation. In the UK they account for 99.9% of all enterprises and it is estimated that the number of SMEs increased by 31.1%, from 3.5 million to 4.5 million between 2000 and 2010 (BIS 2011). The term ‘SME’ includes within it a wide range of very different types of organisation: micro organisations that have fewer than ten employees; small organisations with up to 50 employees; and medium-sized organisations with up to 250 employees.

SMEs are not ‘cut down’ versions of large organisations and the experience of those who own, manage and work in them is distinctive and unique. People who work in SMEs have to ‘do more with less’; they have to work in a more inter-related way with others in the firm and people in the organisation are more mutually dependent than is the case in larger businesses. SMEs are very close to their operating environment and have to respond quickly to external events. They have to stay close to customers and suppliers, and changes in labour and product markets or supply chain relationships have a direct and immediate impact. This means that:

• SMEs are characterised by change and transition rather than stability and equilibrium.• A one-size-fits-all model of people management and development cannot apply in an SME context. • People management practices in SMEs are not determined by explicit and bureaucratic policies and

procedures; instead those responsible for people management make more use of interpersonal relationships and reward-linked practices to motivate people and manage performance.

Because material and financial resources are typically limited in an SME, the capability of people within the business is pivotal to performance. Managing people resources so that maximum flexibility and responsiveness can be achieved is crucial. People practices and approaches in SMEs need to reflect key transitions in order to sustain the organisation’s performance over time.



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Meeting your development needs

People in SMEs often have to be able to take a creative approach to meeting their own development needs; and this applies to those with responsibility for people management as much as to others in the organisation. Reliance on formal ‘off-the-job’ training and education programmes are often not feasible in an SME context and the 70:20:10 ‘rule’, credited to a model put forward by Lombardo and Eichinger (2006), is particularly appropriate in an SME context:

• Undertake about 70% of learning through on-the-job experience, tasks and problem-solving.• Make about 20% of learning occur through your interaction with others (inside and outside of

the organisation). • Only about 10% of learning needs are met from formal ‘off-the-job’ courses, and so on.

The CIPD factsheet about learning methods highlights the wide range of learning opportunities that are available. As you reflect on your professional development needs, you might consider if they could be met through experience-based activities such as:

• exposure to other departments or roles within the organisation• getting involved in specific projects or working groups • co-ordinated role-swaps or secondments • interaction with senior management at meetings or through presentations, and so on.

In addition, you might consider if your professional development needs could be met through your interaction with others. CIPD networking and events provide a cost-effective way to develop through activities such as:

• seeking advice, asking opinions, sounding out ideas • learning through teams and networks, both internally and externally• getting involved with professional or industry associations.

Finally, you and your organisation may feel that learning through some form of structured course is appropriate through:

• an externally provided course, workshop or seminar• e-learning • achievement of a professional qualification.



http://www.cipd.co.uk/hr-resources/factsheets/learning-methods.aspx

http://www.cipd.co.uk/networking-events/

http://www.cipd.co.uk/training/

Documents

Achieving sustainable organisation performance through HR ......their organisation’s performance. Achieving sustainable organisation performance through HR in SMEs A CIPD online