Posted , October 20, 2017.

This week we’re welcoming Kevin Nestadt with a guest blog. Kevin has been both a customer and a contractor with Options Consulting Group.

As a Management Consultant, I thought I knew everything… until I bought into my client’s business.

After some eighteen years of consulting, working mostly with manufacturing businesses, I was pretty confident and successful in what I did, and believed that ‘if only I had my hands on the levers’ of any particular business, I would have both the power and the magic formula to do all those things my clients were struggling to do themselves.

Needless to say, my initial plan of turning the business around and exiting in 2 – 3 years turned into a ten-year mission of pain, stress, survival, learning, growth and ultimately some success.

I have reflected on some of the key lessons I would tell myself if I had to do it all again. These are the “high pain” lessons, never taught at business school or learnt as a consultant.

This is the advice I would give to myself if I had to do it all again. I have focused on the most critical aspects of managing a business – the people issues.

To say that ‘success in business relies on having good people’ is the pinnacle of motherhood statements. So, if ‘good people’ are so hard to find, what are some of the hard lessons that need to be applied. Here we go.

 

Some lessons learnt on how to improve the team

Observe

Don’t change staff without first understanding what ‘lies beneath the surface’. When I first joined the business and was under immense pressure to reduce numbers in a short space of time, mistakes were made. Assess staff on their capability, not on what they have been doing in the past. Do it properly – as you might inadvertently lose your best people.

Implement policies and procedures rigorously and in a consistent manner – particularly when it comes to people management. Don’t let one person get away with breaking all the rules, and then discipline someone else for some other reason. This quickly undermines respect for management and a belief that ‘fairness’ doesn’t exist. Sometimes there may be ‘casualties’ but the benefit of having a system that works and policies and procedures followed far outweigh any short-term pain.

Work harder on some people but draw the line at some point. It’s particularly tough when you have key staff who have lots of knowledge of, and experience in the business, who resist change, or often break the rules. The challenge of replacing people in a small niche business and re-creating the knowledge and experience gained is daunting. Small manufacturing businesses are not high up on the most desirable employer lists, nor are the salaries on offer.

Hire tough and manage easy

At the expense of another ‘motherhood statement’, this one is critical.

Recruit the person that best matches the skills and style required of the job. Often a business owner or manager will clone their own style and recruit someone whom they perceive as being ‘like them’.  The business can then become filled with more of the same, for example, firefighters and problem solvers who are poor at implementing and following systems.  Even if one has to hold the vacancy open for longer – this is far better than filling the urgent job with a candidate who is not even close to ideal.

Don’t be afraid to bring complementary skills and styles into the business. In my role as a management consultant and also as the owner/CEO; I often came across business owners and senior managers who were ‘stuck’ and not making progress with their businesses. While there are many contributing factors, I think one key requirement is getting new people into those businesses, who have the ‘horsepower’, different skills and style to challenge the status quo and help the business owner or manager/s rethink their approach

Weigh up the consequences if people changes are required. Like in many businesses, does one ‘grin and bear’ with the justification that the person in the job is about 70% right, or 60% right, or just take the bull by the horns and risk a new candidate. And so much can rely on these decisions. The consultant in me would say ‘move the person on’, however, faced with recruitment and retraining fatigue, one can become more pragmatic.

Watch out for the hot buttons. There are hot buttons everywhere. Words matter, how they are communicated, tone, selection of words – can inflame and soothe, recognise and insult – often without intent. Many lessons were learnt in that camp.

Some lessons learnt on how to recruit better

Work hard on defining the role required – often completing this task with the management team, key staff familiar with the job, external recruiter or all three. Then use the job definition in a disciplined way to find the person. Don’t bend the job definition to fit any particular candidate.

Use both professional recruiters and employment websites as appropriate depending on the job and time availability. I think there is a perception that recruiters are expensive and simply ‘plug holes’. Like all suppliers and professions, there are a mix very good and pretty average businesses out there and it’s important to find the ones that do deliver quality and value. At times I utilised the services of recruiters who understood my business because I knew I wouldn’t be able to consistently provide the right focus on the process. In other circumstances, I did it myself.

Reference check properly.  Making sure one has relevant and ‘solid’ references for the candidate is super critical, as is the ability to properly ‘interview’ and ‘interpret’ the referee.

Get different opinions. Upon shortlisting candidates, I found it valuable to have additional key staff involved in the interview – not only to get different perspectives but also get the support for recruiting and then supporting the chosen candidate, after that person commenced.

Test the candidate. Whether this is a simple ‘welding test’, checking someone’s abilities to spot mistakes in a drawing or something more complex, testing is vital and saved a lot of money on poor or quick recruiting.  Behaviour and psychometric testing can also be useful but I would suggest not the most critical step.

Trust your instincts and cut your losses quickly if a poor hiring decision is made. Sometimes for whatever reason, mistakes are made. Be sensitive to a new recruit’s behaviour in the first few weeks – being on time, dress, enthusiasm, competence, teamwork etc. However little signs can sometimes be signifiers to a bigger problem. It’s easy to be expedient given the long and possibly expensive recruitment process just undertaken, however, the longer the problem exists, the more it will hurt the business going forward. To be fair though, make sure this is not just one person’s perception, and that the new person is being well supported. My experience though is that one can generally tell in the first few days whether a new hire is going to succeed.

The details

Ensure that the employment contract is comprehensive and that the new employee has a clear understanding of their responsibilities, objectives and incentives to progress in the business.

Implement a performance review system but know in advance – people don’t inherently change and performance reviews are sometimes a waste of time.  I spent hours preparing professional performance management reviews and documentation. Some people valued this and improved, while for others it was a complete waste of time. In many ways, people bring their baggage to work, and despite coaching and reviews, cannot change. And yes, others do, and when this happens, it provides just enough satisfaction to overcome the difficulties.

I learnt that if you want to captain that ship, you need to know almost everything about it, and then have the team that has the right stuff to work with. Getting the team right makes everything else so much easier and having external partners that can help you, as well as solid internal processes, will give you much more sleep and better results.


Kevin Nestadt is a management consultant at Nestadt Consulting (www.nestadt.com.au) and previously CEO and owner of Mackay Multi-Link – a successful SME and manufacturer of boat trailers. Kevin holds a Master’s Degree in Industrial Engineering and is also a graduate of the Australian Institute of Company Directors.

Kevin has worked with Options Consulting Group as both a contractor associate and also a customer.