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The Business Reset

From time to time most businesses have some sort of ‘reset’. This may be due to changes in the market or any number of other things. It’s an opportunity for the senior management team to re-evaluate their business model, products and services, the operation, cost structure and processes. From an HR point of view, and often in the teeth of carefully written procedures, businesses tend to make ad hoc arrangements that seem appropriate or fix a problem at the time, but after a while are no longer effective and things can end up looking a bit messy.

Companies find their activities and processes out of kilter with their business aims and need to reset. It tends to be times like this that other employees feel they’re being treated less favourably than others. According to the CIPD’s Employee Outlook Survey, pay, workload, bullying, favouritism and redundancy are the five top reasons for employees feeling unfairly treated, and favouritism tends to run through the four others.

Resetting gives a company an opportunity to identify and respond to issues and to adapt to new market requirements. There are many ways a business can be reset. Jim Hindman reset his car workshop business and chose to specialise in oil changes. He set up Jiffy Lube which offered oil changes, which he could train high school students to do, and persuaded customers to come back every three months to prolong the life of their car. He sold the business for $43.5 million in 1990.

HR magazine Work recently discussed the aerospace and defence company Matt Black Systems which, although a relatively small organisation, has penetrated its target market as a bespoke provider. How? Partly by ditching its conventional structure and creating a ‘company of companies’ where each member of the 12-person team is responsible for running his/her own ‘business’ with power to buy, control stock and re-invest profits into projects. Bonuses are based on easily measurable success.

It’s a radical solution, but one that has brought remarkable success. This type of system would need some pretty strong checks and balances. Whilst autonomy is key to its success, each team member would have to be carefully selected and trusted to be able to cover all aspects of business. Development would have to be on offer to ensure that no aspect of the business is dropped.

On a slightly less revolutionary, but still innovative vein, General Electric is working on ‘lean management’. Having reset to create a team of highly flexible engineers and technicians, management numbers are minimal. But that made sense as this excellent team intrinsically attracted to the idea by wanting to work well was then involved in management decisions via various committees. The approach focused on giving all employees a stake in the success of a project. Not only that, but engineers were taken on to be flexible enough to work on as many aspects of a project as possible, so with their input on management decisions they could share ideas at each level rather than focusing on one part of an engine. Not only has this improved working cohesion, but it has also streamlined costs with new employees taken on when the current team requests additional resources. It’s truly business-linked recruitment.

Such a radical reset may not be appropriate for all businesses, particularly if the market demands a more conventional approach. Most organisations sooner or later will find themselves in a place they don’t want to be. Instead of resetting to the original format, why not consider a completely different style that addresses the problems that have arisen? The key is the right team with a desire to work, and that applies from 12-person companies to the multinationals.

Russell HR Consulting provides expert knowledge in HR solutions, employment law training and HR tools and resources to businesses across the UK.

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