Creating and Retaining Value - Recent Failures by George Kemish

Over the past 6 months I have seen many instances where organizations have failed to take advantage of opportunities; lost market-share; put their brand at risk; or wasted resources; resulting in loss of revenue and/or additional costs.
Given that August is a quiet month, it has provided me with time to reflect on some of the problems that I have experienced and them with you so that you might learn from some of these outcomes.
So here goes:

Loss of Market-Share - A new team inherited a backlog of work which they saw as being purely an administrative task and so put the work on hold whilst they dealt with, what they considered to be, more pressing tasks. They failed to understand how the back log could impact the Value Chain and put a constraint on the quality of service being provided to the Customer. Reason? Due to a lack of Induction Training, they failed to understand how their actions would be detrimental to the work being undertaken by other departments, thereby reducing the level of service; resulting in a loss of custom.

Risk to Brand and Missed Opportunities - Senior Management failed to recognise the risk to company brands and opportunities that had been lost in an environment where a Group of Companies were dependant upon each other for the generation of custom. Reason? Decisions were being made unilaterally by Senior Managers within the independant complanies. The Value Chain between the companies had not been mapped out and individual business planning had not taken this into account. In this situation there is a need to design a Group Corporate Strategy to protect the Brand of each company whilst also identifying both unilateral and combined opportunities to increase market-share across the Group. This should also include a HR Strategy that is both robust and agile enough to support the Value Chain, across the Group, in order to be able to react expediently to change in both the internal and external environments.

Salary Review - Poor Benchmarking - Recent experience has highlighted the lack of care being taken, by some organizations, when bench-marking salaries against similar posts in other organizations. This can result in locking in poor performers by overpaying them and pushing out high performers by under delivering on expectations. When carrying out salary audits there is a need to compare the duties and responsibilities of the two posts being bench-marked. A value then needs to be placed on any differences that are found; a basic salary can then be calculated. Once this has been done, the employer is in a better position to decide upon the overall package of benefits to be associated with the post (e.g. this might take into account any enhancements to be made in order to retain talent - especially where there is a shortage of skilled labour).

Wasted Resources - Hours - Failure to identify areas where there was a surplus of hours available, compared to actual hours required to complete tasks, resulting in an inflated wage bill. One full-time post was reduced to part-time hours. There could, of course, be a need to retain workers where the workload fluctuates. However, in such a situation, the employer might look to see if it is possible to utilise any surplus hours elsewhere in the organization. The cost of training staff to undertake dual roles could result in savings on both recruitment and salary costs in the longer term.

Key Performance Indicators - Poor Management - The outcome of investigations into the reason why the KPIs were ineffective really surprised me:

  • The KPIs had been put in place to reflect the goals set out in the Business Plan. However, the reporting format failed to show the reasons for poor performance - although colour coded with a traffic-light system, it only showed numerical data. This resulted in a delay in rectifying problems and/or making changes to business and/or operational strategy. It was not down to the KPIs themselves but in the lack of information being reported up the chain.

I hope that you have found this article informative and that it might, in some way, be useful to you in the future. Here's to the next 6 months.

 

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George Kemish is a consultant specialising in HR Strategy, Workforce Planning and Business Scenario Planning. Having started out as an apprentice in the engineering industry he moved into business administration where he held management posts in both HR and Financial Management from 1978 to 1993.

For the next 14 years George held a senior management position in the Education Sector with responsibility for Management & Financial Accounting; HR Management; Secretarial Services; Facilities Management; Events Management, Catering Management; Marketing; Public Relations; Management of Freedom of Information & Data Protection. As Secretary to the Board of Governors he was also responsible for: Advising on the interpretation of all legislation, regulations & best practice relating to corporate governance; committee administration; drafting of the annual corporate report (including year-end accounts); drafting of the business plan to support short, medium and long-term strategic planning.

In 2007 George moved to the Ministry of Defence where he was responsible for HR Strategy and Manpower Planning in respect of worldwide operations until 2016 when he founded his company; specialising in Business Planning from a HR perspective.