Over the last few weeks I’ve described management styles that help form strong teams. Effective people management is one of the building blocks of good business, without this, a company with great potential will never shine. It is the energy of committed staff that turn an ordinary business into an extraordinary one, with each one playing their part to the best of their abilities, doing all the things, seen and unseen, that make a business run like clockwork. Over the last few years I have had the pleasure of working with some of the fastest growing Asset Management and Asset Servicing businesses in the UK and Europe. I have seen how fundamental it is to get the right people in the right places. A few key people can genuinely turn things around, making extraordinary things happen to business.
Delivering for high performance companies
Despite the slow growth of the fund industry, we are fortunate to have a number of fast-growing companies as clients. Culturally we are similar, and we champion the same values. As we mainly use search methods, we actually focus on working with companies who are market-leading. Firstly because we won’t headhunt a candidate for a job that would create a downward step, so we need to be able to offer market-leading jobs. Secondly, when companies are growing quickly, they need our specialist support. Hiring decisions are more difficult, and the pressure is on to get things right first time, and there is never enough time. Our analysis goes way beyond a normal recruitment process. My partner, a consultant, regularly tells me that what I am doing is in fact HR Consulting because of the depths I go to with clients and candidates, teasing out key drivers for hiring and operational issues. We develop an understanding of businesses that is very profound. Most of the time the things I am looking for are not found on the job description at all. I believe that working with a good recruitment partner should be like this. We have the capacity to support businesses in demanding periods of fast growth because we can manage out people problems.
Human capital = capital
It may come as a surprise to hear that there are still some fast growing asset management businesses out there. The most interesting thing about it, is that they all display very similar characteristics when it comes to their human capital. Just a coincidence? I don’t think so.
I believe these firms have got something right in the way that they go about their business which allows them to tap into the potential of their people, and that enables them to outperform the market, in any market. Getting human capital decisions right, is essential if you want your company to grow. It is the people who are engaged and motivated that will help you to drive your company forwards, innovating and creating as they go. It is your people who will help you to weather the storm or bring your company into profit. Although most companies will tell you on their homepage it is their staff that differentiate them from the next, the number of companies who really behave this way in reality is very different. In all high performance businesses I know, they really do live and breathe this. It is the positive energy that is created by managing business effectively that makes certain companies outshine their competition.
Let me share with you more specifically, some examples of what I have seen.
Here’s my Top 10 human capital characteristics of high performance business:
High levels of respect and involvement from senior decision-makers
High performance companies have what I would say is a higher than average level of respect and involvement from all levels of the organisation, among managers and staff, and between staff and external suppliers; people generally treat each other well. But it is the impact of the way that Senior Directors of the business actively get involved in the business that makes the biggest change. I have noticed that senior members of staff, like the COO or the CEO will dip into whatever is the businesses biggest concern and use their knowledge and power to make it work when it counts. They are not ‘hands-off’ when it matters.
Build strong supplier relationships
They build strong relationships with their external suppliers, and, as above, they treat them as they would an internal colleague. They understand that it is a two-way street, a personal relationship, regardless of the fact that one of you is a client. Your requests will be serviced last if your supplier feels disrespected, and on the other hand, that small favour you did, it will get repaid to you in consistent service that is way above the norm. Remember that everyone is someone’s service provider.
They create flat structures
Heavy hierarchies tend to stifle new ideas and fresh thought generation. Like it or not, once you have been in a business for upwards of 5 years, you don’t question how things are done any more. Stay upwards of 10, and you’ve forgotten it can work another way. So let the young guys speak up sometimes, and hear what they say. The strongest managers can hear out a new thought and consider it, even when it isn’t one of their own. Keep your door open.
There isn’t a heavy blame culture
This one is a tough one, but it is essential to the success of business to allow mistakes to happen sometimes, and not to let this get in the way of practising good decision-making. When there is a heavy blame culture, this can destroy decision-making confidence and therefore, growth. It is important not to undermine people who are generally doing a good job for the odd error, one that they can then learn from. Mistake, learn, move on, and forget about it! If you feel someone is making mistakes all the time, they are probably in the wrong job.
They chose their teams carefully
They don’t hire badly, they invest enough time and effort to find the right people, and they leverage on relationships with good recruitment firms to help them cover more ground. When they hire they focus on both people skills and technical skills. They aren’t looking for the perfect CV, they are looking for the right person, knowing that that person can develop. They hire those who have potential over those who have the CV, but don’t deliver. They spend time with their recruitment partners, internal and external. My clients know when it is me calling because most of them have my number saved, they call me frequently to talk.
They chose quality over quantity in recruitment partners
They get to know us really well, and they give us the commitment that enables us to give them the best service we can. When they reach out to us, they know we will have it covered. That is the peace of mind that can only come from a strong relationship. They take the time to explain in detail how their business works, what their culture is like, and what the history is. Once done, this process saves them time and money because we can be sure who would be a fit and who wouldn’t – and they don’t need to repeat themselves. Because of their commitment, we can invest our time in finding candidates who would never know about the firm otherwise.
They promote gender balance
When I talk about gender balance, I actually mean that they try to attract and / or retain women of a certain ‘child-bearing’ age. They are not put off hiring them, because they are focussed on finding the best hire regardless of sex. This can sometimes double the chances of finding someone really excellent. They recognise the importance of gender balanced teams and how they function better. They support women in coming through the ranks, not dropping them at child-rearing age, after children are born. It is at this time that many women reach their professional peak, knowing a huge amount about the clients or products, and the best firms find a way of keeping this talent on-board.
They retain their best talent, and remunerate properly
They recognise that their best people always have other opportunities, and they look after them. It is often the best people who are the most frustrated if things don’t work out, because they invest the most. High performance businesses are full of managers who have found a way to maintain positive teams, even when the times are hard, keeping morale high. This is the main way good businesses have seen out the recession. Good management breeds a workforce who will go beyond their role. They have clear career paths and pay structures for their staff, and have a ‘open door’ policy in case anyone wants to talk.
They use people in the right roles
They are able to identify people’s strengths and put them in roles that work with their core personality traits. This keeps the employees engaged because they can further improve their best skills – skills which are of equal benefit to the business given that they are exceptionally-strong. This creates a positive and successful work environment, and one in which each employees can learn from one another, leading to mutual respect.
They chose their suppliers carefully
They chose their suppliers carefully, and they give chances to new suppliers if there appears to be a new market-leader. Companies don’t make it big for no reason, if there is a firm out there making waves, go and talk to them, see what the hype is about, you might be glad that you did. High performance firms are open to change if this might bring about more positive results, they are not stuck in their ways. They invest time in reviewing this eventuality rather than staying with the status quo, which seems easier but might be making life harder than you realise.
You could argue that it is the other way around, fast growing companies create these people, this environment, and that creates these typical characteristics. You could say it is a question of whether the chicken or the egg came first. But I think that would be the easy way out.
In a world as demanding and fast-changing as ours, there is a huge opportunity to take this period in our history and learn from it. Look after your human capital, and you will see a growth in your business. It won’t happen immediately, but it will happen. Your teams will become more engaged, your products will be better, and your customers will have a better experience. At the end of it all, you and your staff will be happier. Who wouldn’t want that?