Personnel and organisational development: When SMEs become global players

In the past 20 years, many medium-sized companies have developed from craft-based (production) companies into globally active high-tech companies. The qualification requirements for their employees have risen accordingly, and the number of employees has grown accordingly - often worldwide. In most cases, their human resources and organizational development did not keep pace with this development - with the result that many SMEs are now struggling with the following problems: They are finding it difficult,

• find and retain employees with the required qualifications, and
• to develop the qualifications of its employees and its organisational structure in such a way that it corresponds to the economic development of the company as a whole.

One central reason for this is that although they are now effectively large companies, they often still struggle with problems that are typical of small and medium-sized enterprises:

• They lack systematic organization.
• They have little expertise in the areas of human resources and organizational development. And:
• Their development planning is usually short-term, and is often forgotten in the "daily business" - if it exists.     

More strategic thinking in human resources

One reason for this is often: Their personnel function did not grow like the company as a whole. This is why the few experts for personnel and organizational development are usually primarily occupied with "trouble shooting" - i.e. reacting to acute operational problems. They hardly have time for conceptual, strategic work. And in many cases they are still struggling with the problem: The top decision-makers in the company are not sufficiently aware that behind most operational problems - such as poor quality - there is a shortcoming in the area of personnel or organizational development. Accordingly, they have to do a lot of convincing.

But this situation is gradually changing. Increasingly, decision-makers in small and medium-sized enterprises are rethinking their approach - partly because they are realizing that they need to change: Our workforce is much more heterogeneous today than it often was at the turn of the millennium. In addition, our employees more often have an academic degree - for example, as an engineer or business economist. And these employees not only have different demands on their employer, but also on their work and leadership than employees in the past.

That is why many medium-sized companies are currently putting their concepts for personnel and organizational development to the test. The central question is: How can we modernize our personnel work as well as corporate and management culture in such a way that, on the one hand, it meets the (labor) market requirements and, on the other hand, we do not lose the strengths of a medium-sized company?

Addressing the process of change

Developing such solutions and implementing them in day-to-day operations takes time. As a rule, the starting signal is a change project that takes place in five steps, which are briefly outlined below.

Step 1: Record the actual situation.

At the beginning of the change initiative, a kind of check-up is carried out to ascertain the current situation - for example:

• How have our staffing needs - due to changing market demands, our growth, etc. - changed?
• How has our employee structure changed, and to what extent have the needs of our employees changed?
• Which tools and procedures do we currently use for personnel search, selection and development? Are they still appropriate?
• How do we lead and communicate in our company today, how should we lead and communicate in the future?
• How do we work together today, and how do we expect to have to work together in the future to be ready for the market? 

The goal here is to understand the current situation and the need for change in the organization.

Step 2: Design a target image.

After this survey, it is necessary to develop a target picture that includes, for example, the following dimensions:

• Where do we want to go from here?
• How should our company "tick" in five or ten years - which culture should exist in it?
• What competencies does our organization have then? What are its strengths?
• How do we then ensure that we have the required employees with the necessary qualifications, competence?

Step 3: Create a project/action plan.

From the target picture and the analysis of the actual situation, (sub-)projects and, in turn, action plans can be derived. In doing so, it is important to bear in mind:

• Establishing strategic HR work and development and the associated cultural change is a longer-term process. And:
• The change capacities of every company are limited. Because in addition to the development work, the day-to-day business has to be taken care of. 

Accordingly, prioritization is important in order not to overburden the organization.

Step 4: Record and control the changes.

Cultural changes take place slowly. Therefore, it is important to systematically record and communicate the (partial) changes - so that the feeling does not arise that "nothing is moving" and the energy for change slackens. This systematic recording is also necessary in order to control: Are we (still) on the right track or are course corrections necessary?

Step 5: Save partial results.

Giving up habitual patterns of thought and behaviour is difficult for almost all people. Accordingly, they quickly fall back into their old habits. That is why it is important to consider: How - with which tools, procedures - do we ensure that the results are not "flash in the pan" but sustainable?

Get the management team on board

A decisive, if not the decisive success factor in such change projects is that the attitude and behavior of the managers change during the course of the project. These are often technicians and engineers by nature. And this is also where their passion lies. However, they are correspondingly reluctant to deal with such topics as personnel and organizational development. And they tend to attach little importance to leadership work - also because it involves so much "human interaction".

Therefore, it must be ensured in such projects in medium-sized companies that the decision-makers are on board - and do not (unconsciously) torpedo the overall project. Accordingly, it is also important that they receive regular feedback on their (management) behavior and its (unintended) effects - from a neutral person whose competence they trust. Because of the powerful position of owner-entrepreneurs in their companies and their existential dependence on them, employees are usually - and rightly so - very cautious about giving feedback. They tell the "boss" what bothers them, at best through the nose.

Author:

Dr. Christoph Kuth works as a Senior Consultant for Machwürth Team International, Visselhövede (www.mticonsultancy.com). Before becoming a consultant, he was responsible for more than 20 years in various industries and companies as a manager for personnel & organizational development and in-house consulting.