Change is unavoidable in organisations. Knowing how to handle and adapt to change, and knowing how to manage staff through turbulence is an important management skill. It can make all the difference between a company’s success and its demise.
First, it has to be said that change is difficult. Writing in the Harvard Business Review, Rosabeth Moss Kanter identifies 10 reasons why people resist change: loss of control which makes people feel they’ve lost their autonomy; excess uncertainty where change feels like walking off a cliff blindfolded; decisions imposed on people suddenly, with no time to get used to the idea or prepare for the consequences; the panic that sets in where everything seems different; loss of face where people associated with the last version — the one that didn’t work, or the one that’s being superseded — are likely to be defensive about it; concerns about competence; more work; ripple effects; ghosts of the past where old wounds reopen and historic resentments are remembered and finally, where change is resisted because it can hurt.
How should managers handle that? They should minimise discomfort and try to diagnose why the change is being resisted.
Some say managers have to see it as an opportunity. As Geoffrey James writes in Inc.com: “Average bosses see change as both complicated and threatening, something to be endured only when a firm is in desperate shape. They subconsciously torpedo change … until it’s too late. Extraordinary bosses see change as an inevitable part of life. While they don’t value change for its own sake, they know that success is only possible if employees and organization embrace new ideas and new ways of doing business.”
Mind Tools sets out some clear steps on how to manage change. The most important is to communicate effectively. “Talk about why change is necessary, and share your vision of change with everyone. This includes talking to all stakeholders and getting their support early in the process. These early discussions can help you assess the various barriers to change, and then plan how to manage stakeholders as you move the project forward.”
It recommends aiming for a few early achievements to showcase the benefits of the change. That helps keep people motivated and enthusiastic. Good managers build on the change they started, and work toward making it part of the organisational culture.
“This can separate “good” change management from “great” change management. Good change management is when you are satisfied when you meet your initial objective. Great change management is when you keep adjusting your target for continuous improvement – you aren’t afraid to keep changing things, because you’re confident in your ability to keep making progress.”
The Queensland Government’s business advisory site has some good advice for managers: involve your staff early in the change process and establish clear points for staff discussion and input; involve staff in changes that affect them, keeping in mind that your team members have a close knowledge of your systems and processes and may have valuable suggestions to make; help your staff manage loss by using discussion sessions designed to allow them to share their feelings about the changes, scheduling one-on-one meetings with appropriately skilled members of the management team, or by making counselling available to help staff work through their emotional responses; select a team of people with a good range of skills and knowledge of your business, and across the various roles and levels of your business to help drive the change; identify early any attitudes that need to change and if you find any staff cultivating negative attitudes about the change process, meet with them directly. Work through their issues and create a constructive approach to dealing with them; break down the change stages into smaller initiatives that are easy for staff to follow and understand and finally, build a culture of continuous improvement. Organise forums and online contributions to capture and recognise their input and celebrate your shared successes.
One of the most important things managers can do is cultivate innovators. The challenge for companies is to develop systems that allow ideas to percolate up. Managers can get a lot of innovative ideas from their employees, simply because they interact with customers more and pick up what the market wants. That means managers have to be accessible and seen around the company. They have to speak with employees to find out what is on their minds. Do they have ideas for improving the business, or ways to promote a better workplace?
According to Forbes, the most innovative companies have the most diverse workforce. Diversity is seen as a key driver of innovation and a critical component of being successful on a global scale. Senior executives now say that diversity is crucial. It encourages different points of view which shakes people out of their comfort zones.
As part of the culture, managers should embrace failure too. They should let employees know that every idea doesn’t have to be a success. If employees fear the consequences when an idea doesn’t pan out, they’ll be less likely to stick their necks out. That doesn’t mean every idea has to be adopted. Managers have to run preliminary tests to gauge a project’s potential.
Examples of companies that have done that include Job Capital, a fast-growing payroll services, migration, salary packaging and contract-management business. Its founder Jo Burston told me the only way to innovate and get ahead is to fail. “You must fail many, many times to get to exactly the product that is niche, that’s customer centric, that is scalable and has a unique selling proposition,” he says.
Other examples of company cultures that embrace failure include the pharmaceutical company Eli Lilly which holds failure parties where specialists analyse failures and see how to fix them, and the Indian conglomerate Tata which has an annual competition for the “best failed idea”.
Another example of a culture that embraces innovation is Google. It gives its employees time to come up with ideas. It has an 80:20 policy where Google allows its employees 20 per cent of their work time to focus on personal initiatives that may not be tied directly to their assigned duties. The 20 per cent innovation time rule produced GMail and Google News and probably a bunch of other cool technologies.
All this is backed up by a report from the Economist Intelligence Unit which reaffirmed that the most innovative companies celebrate failure and involve employees across the company in generating ideas. Good ideas can come from anywhere.
It cites the example of Scandinavian furniture manufacturer IKEA which uses a ﬂat organisational structure to help maximise employee feedback. Its CEO has a cubicle, rather than a spacious private ofﬁce, to make him more accessible. Everyone is expected to contribute ideas, and good ones are transmitted quickly throughout the company.
So what should managers do? The consultancy, Strategos says managers need to spell out what sort of innovations the company needs and create a system where everyone can participate. That means managers need to be receptive to ideas coming in from everywhere, including some unexpected places (Clemenger BBDO managing director, Peter Biggs once told me that his receptionist provides good ideas). Strategos says they should also make time for innovation by always including innovation as a topic at all management meetings. This can be as formal as reviewing innovation projects or pilots or regularly reviewing the innovation portfolio.
How would you suggest managers create a more innovative workplace?
We’re not all numbers people. But all managers have to be across the bare basics of profit, leverage and liquidity. Even if managers struggle to follow their own superannuation statement, or have trouble scrutinising insurance policies cover to cover and understanding all the exclusions, they should know how to look at a P&L (profit and loss statement) and balance sheet and understand which way the company is tracking. Finance for non-finance managers is an essential skill.
MindTools sums it up neatly. First, you have the balance sheet which basically details the financial health of the company. It sets out what the business owns (otherwise known as assets), what it owes (liabilities) and the value of the owner’s equity at that specific point in time. Total assets are a combination of total liabilities plus equity. So the balance sheet shows us to a large extent how much the business is worth. Then you have the income statement, or P&L, which tells us how much money is coming in (otherwise known as revenue), how much is going out (expenses) and the profit figure.
Those are the basics in a nutshell. As this NAB guide for small business explains, the big difference between a profit and loss statement and balance sheet is that a profit and loss statement winds back to zero at the end of each financial year, recording sales and expenses for a fixed period of time only. A balance sheet on the other hand is a cumulative record. It tells us what has happened in the business right from the start. The balance sheet summarises your assets (what you own) and liabilities (what you owe). The difference between the two is what you’re worth. For the company history and the state of its health, go to the balance sheet.
The one thing I always look at in a P&L is the cash flow. That is one of the best indicatorsof the company’s health. Cash flow statements report a company’s inflows and outflows of cash. That’s important because a company needs to have enough cash on hand to pay its expenses, including wages, and purchasing assets. When cash flow is falling or under pressure, it’s a danger signal. Profit is what the accountants tell you, cash is king.
There are a few other things to look at. Don’t just look at one set of profits. As this guide from the Australian Securities and Investments Commission tells us, you need to study the financial performance over several years. Look at the P&Ls. Is the company consistently profitable or does it swing between profits and losses every few years? Also, take a look at whether the company is generating surplus cash. This is important. See whether the surplus cash from operations covers the cost of renewing plant and equipment and making new investments. Again, this is about how much cash the company has. Cash levels will always tell you how healthy the company is.
And finally, look at the debt levels. Excessive debt kills companies. How heavily does the company borrow to support its operations? What percentage of the total assets of the company is made up of borrowed money? You’ll find the answer to that in the balance sheet.
Done well, successful employee engagement boosts productivity and staff morale. It minimises wastage, increases profit margins and improves relations with clients and suppliers. Unfortunately, the evidence suggests that Australian managers find it difficult. They struggle with it.
A damning survey from the Australian Institute of Management of 2,223 business professionals from a cross section of Australian industry and government sectors people found that more than a third did not believe their manager helped them perform at their best and only 57 per cent said management listened and responded to their concerns. Fewer than four out of 10 (39 per cent) said communication between middle and senior managers was effective with only nine per cent saying it was “very” effective. Only 54 per cent said they felt appreciated by their employer. So basically, half the work force feels unappreciated. That’s no way to engage people.
This is backed up by a Gallup poll of 47,000 workers in 100 countries which found that only 18 per cent of Australians can say they love their work. That’s compares to 23 per cent of the British and Kiwis saying they are engaged, one in five Canadians claiming they’re happy with their work and 28 per cent of workers in the US experiencing high rates of job satisfaction. When it comes to worker engagement, Australians are way below the global average of 27 per cent.
And as reported here, a survey by Towers Watson, which included 32,000 workers around the world, found that about 72 per cent of Australian employees were not fully engaged in their work. Australian workers also scored lower than the global average on nine out of 10 detailed engagement questions.
All this points to one thing: Australian managers generally struggle to engage staff.
But there are exceptions. Announcing the results of the 2012 best employers in Australia and New Zealand survey, global HR specialists AON Hewitt identified Chorus New Zealand, Express Data, FedEx Express (Australia), FedEx Express (New Zealand), Frucor Beverages Australia, Hilti Australia, Janssen Australia and New Zealand, Microsoft Australia Pty Ltd, Peoplebank Australia, SEEK, Shire Australia, Starlight’s Children’s Foundation, Trilby Misso Lawyers and Wood & Grieve Engineers as being among the best employers in Australia.
They say that the best employers show an unwavering commitment from senior leaders to the importance of developing highly engaged and productive employees, they set clear performance expectations aligning people to the organisation’s goals and values, and they bring meaning to their work. They create conditions for their people to excel, encourage employees to contribute discretionary effort and clearly communicate what employees can expect. That in turn helps the organisation to be more competitive in attracting and retaining employees in a tight labour market.
AIM VT chief executive officer Carmel Ackerly says employee communication with employees is the “Bermuda Triangle of management practice.”
“It’s the dark abyss in which corporate messages and two way communication often get lost,” Ackerly says .
“Australian organisations repeatedly say how ‘employees are our greatest asset’. But our employee engagement survey findings show that managers’ ability to talk with staff and to listen and respond to their concerns is at odds with the claim that employees are number one.”
“Communication is undervalued as a skill – it needs to be learnt, worked on and constantly refined. I suggest you closely observe skilled business communicators and evaluate why they make such a positive impression on you.”
“If you can’t communicate, you can’t manage properly and you can’t lead. Don’t wait till your management career stalls before you take action – do a self-assessment of your communication skills and calibrate that assessment with former colleagues whose opinions you value. If you have skills deficiencies – seek appropriate training and professional development.”
Taking on board what Carmel Ackerly and AON Hewitt say, what would you suggest Australian employers do to better engage their employees?
Sooner or later, every organisation will have to manage projects. The plan is to get the project done as quickly as possible. Project management takes ideas and converts them into a planned, resourced and funded outcome. It is the art of making things happen. Skills for managers in that area become absolutely critical.
Scott Berkun at Microsoft offers some guidance on how managers should handle projects. He says there is nothing innate about it. “Some people are able to apply their skills and talents in whatever combination necessary to move projects forward, and others cannot, even if they have the same or superior individual skills,’’ Berkun writes. “The ability to make things happen is a combination of knowing how to be a catalyst or driver in a variety of different situations, and having the courage to do so.”
He says the most important tool managers should have is the ability to prioritise and creating lists.
“Typically, these ordered lists have one important line dividing them into two pieces. The top part is priority 1: things we must do and cannot possibly succeed without. The second part is everything else. Priorities 2 and 3 exist but are understood to be entirely different kinds of things from priority 1. It is very difficult to promote priority 2 items into priority 1. This priority 1 line must be taken very seriously. You should fight hard to make that list as small and tight as possible (this applies to any goal lists in the vision document as well). An item in the priority 1 list means “We will die without this.” It does not mean things that are nice to have or that we really want to have: it gives the tightest, leanest way to meet the project goals.”
The Canberra Institute of Technology says there are six steps: work out exactly what’s required; plan in full detail the scope, time, cost, quality, human resources, communications, risk and procurement; be completely familiar and at ease with all the software management tools; make sure you delegate appropriately as the project manager’s role is to guide and lead the project, not do all the work; know how to manage change and co-ordinate a set number of resources to achieve the desired outcome in a specified time frame and finally, build a top team and work to support them.
The Enterprise Project Management site identifies the following project management skills: the ability to conduct analysis, communication, budgeting, teamwork, intelligence and razor sharp time management.
Project management specialists say they have to work as both leaders, who share and communicate a common vision, and managers who have to make sure the work gets done. They also need to be team builders and team leaders, excellent communicators, great organisers and planners, problem solvers and negotiators and influencers.
Alternatively, the AIM offers a courses like this one in project management. What would you say are the essential project management skills?
When William Shakespeare declared “All The World’s A Stage”, he could have been talking to managers in the 21st century. In a world where electronic presentations are everywhere, doing a presentation in person has a lot more impact. A good presentation will give people insights and help them see things that were previously unimaginable. It should be part of every manager’s tool kit.
That might explain why there are so many courses now springing up offering to teach people how to present, like for example the AIM course.
Writing in Forbes, Carmine Gallo says there are three tricks presenters use. The first is to make it understandable. That means no jargon, no buzzwords. And make it concise. If you can’t state a position in a few words, you don’t have a position. Secondly, Gallo recommends you make it memorable. If your audience can’t remember what you said, you’ve wasted your time. And finally, make it emotional. The best way to do that, I’ve found, is to tell a story. It’s the only way to really engage people.
In my tips here, I outline the key steps you need to take. First, be absolutely clear about what you want to say. Then organise your presentation into three sections. First, there’s the summary of all your points. This is important because it gives your audience an idea of where you’re going. This allows them to connect the details that follow to the broad overview. Then you deliver the main body, making all your points. That is followed by the conclusion which is the summary again. Remember those three steps: summary, main body and conclusion. This structure is the plot line for your story. Always start it with an “attention grabber”. It can be a question, or it can be a joke. If you try humour, make sure it works. There’s nothing worse in presentations than jokes that fall flat. Don’t read from notes. You need to look like you know the material so memorize it. In that link, I also give advice for slides and handling questions
The Next Web website tells us you have to be ultra-prepared. That includes everything from the technology to knowing your material inside out. And also, rehearse liberally.
“By rehearsing liberally you are not only soaking in your material, but you are also keeping your presentation in a better state of “freshness”. Knowing your material and not being married to how it is going to come out of your mouth is freeing. It lets you be more relaxed and conversational …Give yourself some breathing room in your presentation, or you’ll find that you won’t be able to breathe very well during your presentation at all.”
Kipp Bodnar at Hubspot says you need to be “infotaining” which means basically making personal connections, giving little details about your private life. Work the room and try to speak to everyone there. Project your voice, sound excited, and make sure your passion for the topic comes through. The more energy you have, the more engaged the audience will be. And make sure you interact with the audience.
Workplace health and safety hazards can be costly, both to lives and the bottom line. Poor workplace safety costs business billions of dollars a year. It’s even tougher for small businesses which experience roughly the same incidence of workplace injury and illness as larger operators. Tougher because it is more difficult for a smaller business to recover from a workplace accident and because the relative impact on the bottom line is bigger. However, these hazards are largely preventable if managers take the right precautions.
First, managers should recognise that workplace safety is an issue. According to the Australian Bureau of Statistics over 640,000 people reported suffering a work-related injury or illness in the last 12 months. Safe Work Australia says that people driving trucks or working on farms are the most vulnerable. There are also commuter fatalities and bystander fatalities. The main industries it is happening in are in the transport, postal and warehousing, agriculture, forestry and fishing and the construction industry. Combined, they account for 61 per cent of all worker fatalities.
So how do managers deal with it?
The Victorian Government’s Better Health Channel tells managers to understand the risks and address common causes of workplace injury like long hours, job insecurity and conflicts with co-workers or bosses. They should encourage regular breaks and schedule the most difficult tasks at the times when people’s concentration is at its best, like the first thing in the morning. Another good idea is using ergonomically designed equipment or rearranging the work area to prevent people from stooping and twisting. They can also use mechanical aids wherever possible so that people don’t have to carry heavy loads and make sure people protect their back when they have to pick up something that’s heavy. It is important people wear protective equipment like earplugs, earmuffs, hard hats, safety goggles, gloves or full-face masks where appropriate. Companies should also have policies in place for alcohol and drugs. And their human resources people need to be right across the issue.
The most prominent hazard in this category is communicable diseases such as colds and flu. According to St John Ambulance Australia, these diseases cost Australian business $7 billion a year in lost time with 1.5 million lost working days. The reason colds and flu can knock out such large portions of a company’s workforce depends partly on our society’s working culture. Many people still come to work when sick, a phenomenon described as presenteeism I covered the issue of presenteeism in a blog last year.
Managers can address this by giving employees more flexible sick leave. They can also prepare for epidemics by testing whether employees have the infrastructure to work remotely if they are ambulatory but contagious. That might mean ensuring that employees have access to VoIP and work e-mail accounts from home, though this won’t work in fields such as manufacturing where employees need to be on site to do their jobs. Companies can also offer flu vaccinations.
Managers can also do risk mapping. This involves examining liabilities by examining the physical workplace and facilities rather than considering the habits and duties of your employees. This can prevent many accidents at work. For example, if you have an area of your facility where liquids might spill, you would want to include handrails to prevent slips and falls if and when that occurs.
Networking is about connecting with people internally and externally to share information and create a mutually beneficial relationship. While some people seem to be able to work a room and contacts with ease, it’s not an inborn talent. It comes with years of practice. There are networking techniques.
Kathryn Minshew at the Harvard Business Review recommends getting out there as much as possible. It’s all about being connected, she says. Kathryn’s advice is that managers and entrepreneurs should start out by going to one industry-related event per week, then three, then eight. They should also sign up for events and newsletters in their industry. In other words, managers need get out from behind their desks.
Leadership coach Ricky Nowack suggests sending letters, cards or phone calls to people who could make a significant difference to your business. After you meet someone, she says, make contact soon after. Don’t just file their card. And build the relationship before asking for business or referrals. She also recommends writing down three things about the person after you meet them: one personal, one descriptive and one business interest. That way you will always have something to draw from when you meet them again. Once you have established the relationship, she says you should ask for referrals. Don’t be afraid of asking them if there are other people you should meet who could benefit from the exchange. And finally, build your profile. Get your name out there.
Lou Dubois at Inc.com recommends managers use technology. Indeed, technology is wonderful. These days, you can Google people, look at their LinkedIn profile, their Facebook information and their Twitter stream. It’s a way of getting to know more about them.
He also recommends setting up networking categories. The first would be everyone in your database. That is to say, everyone you have connected with by phone, email, speaking engagement, on Twitter or through LinkedIn. The next category is the immediate network which can include friends, family or our immediate business network. This shouldn’t extend to more than 200 contacts. Then you have the inner circle, usually about 50 people who can rotate annually and give you candid career feedback about your career and opportunities. After then comes the group you can call your personal board of advisors. This group comprises 5-6 individuals you are particularly close to. They should be your go-to network for advice that not only touches on your career, but on you. And finally, there are your friends and family, people who probably like you because they either have to, or they just do.
Consultant Ivan Misner, who specialises in helping entrepreneurs build networks, says face to face networking is most effective when you are offering advice or assistance without making it sound like you’re trying to sell them something. It’s also a good idea, he says, to become a trusted source for referrals and contacts. That way, you build trust and you are sure to get something back.
Being a manager requires you to be in control of your emotions. Understanding the way emotions work and how we respond to them is critical for managers. Emotional intelligence is about the ability to identify your own emotions and those of others. It’s also about knowing how to harness your emotions and apply them to tasks like thinking and problem solving. It means regulating your own emotions and having the ability to cheer up or calm down another person.
All these are critical managerial skills. So how do managers develop them?
Professor Peter Salovey from Yale University and John Mayer from the University of New Hampshire wrote an often-quoted article where they define emotional intelligence as “the ability to monitor one’s own and others’ feelings and emotions, to discriminate among them and to use this information to guide one’s thinking and actions.”
Writing in the Harvard Business Review, Goleman says the key features of emotional intelligence are self-awareness where you understand your moods, and self-regulation where you can control disruptive impulses that would set you off. You also need a certain level of motivation – your passion for work should not just be about money and status. And it requires a certain level of empathy where you can understand the emotional makeup of other people and have the social skills to build relationships and manage networks.
Writing in Psychology Today, Professor Preston Ni identifies five keys to improving one’s emotional intelligence. The first, he says, is to deal with one’s negative emotions and not let them overwhelm. He says it’s important to stay cool under pressure. That can even come down to a few basic exercises like taking deep breaths when you’re feeling emotions are rising, or just leaving the room. Another important strategy is to read social cues carefully and not jump to conclusions. If in doubt about anything, seek some clarification. He also recommends people should be assertive and assert difficult emotions if necessary (as in “I feel disappointed when you didn’t follow through when you told me you would”). And the final one is the ability to get close to people so that you know how they feel and what they’re going through.
The Mind Tools site offers some good tips on how to build emotional intelligence. Under its model, it all starts with self-awareness.
For example, observe how you react to people. Do you rush to judgement before you know all the facts? Do you stereotype? Then look at your work environment. Do you seek attention for your accomplishments? Do you give others a chance to shine?
Do a self-evaluation. What are your weaknesses? Are you willing to accept you’re not perfect and that you could work on things to make yourself better? How do you handle stress? Do you get upset when things are delayed? Are you quick to blame others when things go wrong?
You need to take responsibility for your behaviour. If you have hurt someone’s feelings, apologise. Think about how your actions will affect others before you do anything.s
All common sense? Maybe, but it’s amazing sometimes how common sense isn’t that common. Managers with emotional intelligence are a special breed.
How would you suggest building emotional intelligence?
Few people negotiate maternity, or for that matter parental leave until they are about to become a parent. That means one thing: most people are not prepared if it’s their first child. So what are the tips on how to manage it?
First, let’s look at the law setting out what people are entitled to as a minimum. Australia’s first national Paid Parental Leave Scheme is fully government-funded and aims to help employers keep valuable staff. The scheme provides eligible parents with up to 18 weeks parental leave pay at the national minimum wage.
But anything on top of that has to be negotiated with the manager. And as I pointed out a few weeks ago in an earlier blog, combining motherhood and a career requires some discipline and thought, not to mention managers who are understanding and partners prepared to step in and help out.
The first thing, they say, is to know what you are entitled to. Read the company manual, the information you need will be there. Do some background research so that you learn what types of leave others there have taken. Also, check out what other companies offer. And ask yourself if that’s enough. Many organisations have entitlements that have not kept up with the times.
“Talk with your partner or spouse,’’ Gallo says. “Of course, it’s hard to anticipate how much leave you’ll want until your child has arrived. One solution is to ask for the longest amount of time you can afford to take, knowing that you can return to work earlier if you choose to.”
The experts also say that if there’s some resistance, try to frame your negotiation as an exception to the existing policy. Try and set it up as an experiment instead.
Some more tips here: make sure you know the law and how it applies to your company, talk to someone from the human resources or personnel department to find out your company policy and your eligibility and talk to other women in your company who have left on a maternity leave and find out what terms and conditions they were given. Also, tap into the grapevine. There’ll be some women who were able to negotiate cushy perks into their maternity leave. Finally, find out if you can add vacation or sick time to maternity leave.
That’s negotiating leave. For some, the tricky part is negotiating your return to the workforce.
Lisa Gates, the founder and trainer at She Negotiates which aims to help women build negotiation skills argues that negotiating re-entry is the critical part. Indeed, it’s as important as the leave itself.
“From a negotiation perspective I think it’s important for all women to craft a maternity leave plan, particularly if the standard policy in the workplace doesn’t address the reality and totality of your needs. And, we not only have to craft and negotiate our exit, but our re-entry. We have heard story after story of women whose positions were eliminated during their leave, or whose salaries were set back upon resuming work. For this reason, it’s best to negotiate all the moving parts of your maternity leave, and get it all in writing in advance.”
Many might opt for something more flexible – say working three days a week with an adjusted salary or doing some telecommuting – allowing them to combine the responsibilities and sheer hard work of parenthood with their careers
Coach Caroline Dowd-Higgins suggests coming up with a business plan that can be put to managers.
“Have contingency strategies if the initial plan is not well received or approved but take the driver’s seat and articulate what you need to get the most out of your negotiation. You , three days a week, telecommutingshould help your boss understand that your long-term plan is to grow your career with the company and this adjustment will empower you to serve in the best way possible.”