People As Business Strategy

Do You See Your People As Part Of Your Business Strategy?

One question I am often asked is “what is the difference between clients that grow fast and those that take a little longer?”

Interestingly, the answer has remained the same in my 17 years as a business strategy consultant. The businesses that grow better, faster and smarter are those that have their people strategy right. They understand that a successful business requires getting the right people doing the right things first.

Get People Right, Then Strategy and Execution Will Follow

People drama is often the most time-consuming part of business management. Most conversations I have with business leaders are about their frustrations dealing with people problems and not being able to focus on strategy.

But even though this is one of the most common business strategy concerns, many leaders don’t see the link between people, strategy, revenue and growth.

Getting your people right, having the right people in the right positions and productively doing the right things in your business is how you get your strategy executed. Great people executing a great strategy will drive revenue growth and net profit.

I have seen it so many times and in varying degrees, that when a company does not have this right, the growth in revenue and net profit does not materialise. I have also seen the companies that get their people strategy right outperform their competitors. They also have a lot more fun on the way!

People As Strategy

The people first business strategy is reinforced by Tom Peters in his best book to date The Excellence Dividend. This must-read strategy book has many reminders of what we should be doing to create sustainable growth. A stand-out message is that one of the best business strategies for success is to get all decisions related to people right first. That is, your people strategy must be seen as an integral part of your business strategy.

Peters explains that a people first strategy means that business leaders need to get serious about evaluation. He states that companies that evaluate people effectively have a competitive advantage, giving examples of Zappos, Ritz-Carlton, The Container Store.  Like Peters, we agree that success requires getting the right people doing the right things in your business. The people in your company should be part of the company strategy for growth.

In a recent HBR article titled Retailers Are Squandering Their Most Potent Weapons, the authors explain the idea of a people first strategy in the context of the retail environment. In the age of online shopping, bricks and mortar retailers are cutting costs by reducing headcount. Workers per store has reduced by 10% over the last decade and retailers are also reducing training budgets in an attempt to compete with e-retailers. In many cases, however, reducing staff also significantly reduces revenue and profit, because the remaining staff do not sell as many products or as well.

A people first strategy in the retail environment by contrast, works to assess, train and employ the right number of staff per store. This number will vary per store with some stores, determined by analysis, requiring more or fewer staff. This people focused approach, the authors assert, can add as much as 20% to revenue.

People First Strategy Tips

So when you are scaling up your business, what should you do to create a people first strategy?  Focus on hiring, evaluation and accountability.

Hiring

To ensure you have the right people in your business, you need to start focusing on your hiring process. We recommend that you hire with your business core values in mind and design your interview questions and assessments to test alignment. This way you are clear you are looking for people who are aligned to your vision. Core values provide clarity about how someone should act in your business and gives them the permission and ability to perform better. This provides managers more time to manage. Additionally, when you hire on core values, a large number of your people issues disappear. (Check out my article Core Values Should Drive Your Employment Choices for more on this.)

Evaluation

You also need to establish clarity around your evaluation process. We recommend implementing five key HR practices, with each term and definition below:

  1. Role purpose – define the purpose of the role and how it fits within the business.
  2. Role responsibilities – provide clarity around the duties of each role.
  3. Performance measures – be clear on the outcomes expected of the role (scorecard).
  4. Review processes – provide recognition, a plan for development, and set goals.
  5. Linking company purpose and values – include core values in your scorecard.

(Rowan Larson, Executive Director of The Human Resources Project explains this in more detail in his article Scaling Up – An HR Perspective.)

Accountability

Simply put, for every role, function or process, there should be one person who is accountable. Accountability keeps your business running smoothly and clarifies who is responsible for scaling your business. By identifying one person in your business that is accountable for each of your critical business processes, you can keep track of business performance and make changes to run your business better.

Accountable KPI’s should exist in every role. Keeping team members accountable with clear KPIs brings greater meaning and certainty around the expectations of their role. Accountability also gives clear lines of communication for staff when things are not working. This means problems are identified, shared and resolved more quickly which in turn increases productivity.

A great tool to identify, assign and set KPIs for your critical business processes is the Process Accountability Chart.

Your business, and ultimately your long-term success, relies on your team. Do your people play a part in your competitive business strategy? Get help from a proven business strategist – contact SSBG to get the right people doing the right things with clear accountabilities, allowing you to scale with success.

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  • About the Author, Leigh Paulden

    Leigh Paulden is the only Senior Certified GI Business Consultant in New Zealand. He works with mid-market business leaders looking to grow. He creates the clarity and certainty needed to make great decisions and achieve scalable and sustainable success.

    Find out more about Leigh or contact him to discuss taking your business growth to the next level.