WHAT’S NEW
MANAGEMENT FOR DESIGN Spring 2015
Outsourcing your HR needs
If your business can’t afford the luxury of a dedicated Human Resources (HR) department, perhaps it is time to find one elsewhere. Of all the growing pains experienced by businesses, dealing with HR issues can be some of the most frustrating ones. Finding, managing and retaining good people involves dealing with a myriad of contracts, policies and government regulations, not to mention the finer points of payroll tax, superannuation and other financial issues.
ACA The next ACA Business of Architecture webinar series will be held on Wednesday 11th November. For more details visit the ACA website: http://bit.ly/1P1zznx.
Don’t make the mistake of thinking these problems only affect big businesses. Even the smallest businesses need to be familiar with the National Employment Standards and how these entitlements relate to flexible work conditions. If you’re a business owner, driven by a passion for what you do best, then chances are these people-related issues aren’t your area of expertise. Unfortunately these issues can become overwhelming long before your business is large enough to justify maintaining an in-house HR team. If HR challenges are threatening to impact on your business, then it’s time to get help.
Where to start The Federal government’s FairWork.gov.au and New South Wales’ Small Business portal make good starting points for businesses investigating key HR issues, but there’s no one-size-fits-all solution. The right tools will depend on your budget, your business and the specific challenges you face. The simplest online HR solutions are automated tools and templates designed to walk you through creating policies, procedures and documentation. They should be designed to ensure your business is compliant with workplace laws, such as Australia’s Fair Work Act. Choose with care, as many online HR tools offer templates based on US or UK workplace laws. Legal challenges Of course, laws and regulations can change, so it’s not a set-and-forget process. Look for HR tools that are designed to keep you up to date with legislative changes and other issues that might impact your relationship with your people. Organisations such as Victorian Employers’ Chamber of Commerce and Industry (VECCI) send out regular emails and updates on important legislation changes, particularly relating to the National Employment Standards. Also look for tools that are flexible and designed to grow with your business, perhaps integrating with payroll and other key systems. Compliance requirements While addressing your HR requirements it might also be useful to consider your Occupational Health and Safety needs, as many online services cover both HR and OH&S. Both are key compliance issues, which should be part of your business’ risk management strategy, regardless of how big or small you are. Victoria’s WorkSafe offers online tools and documents for OH&S management, and other states offer similar WorkSafe or WorkCover websites. HR Consulting Services The next step up from fully automated tools is HR consulting services, which often combine online HR tools with a hands-on appraisal of your HR needs. Rather than simply generating forms and policies, such services often assist you with managing the entire employee lifecycle from recruitment and orientation to performance reviews, personal development, ongoing training, termination and exit interviews. Need help? At Management for Design, for example, we provide the full complement of HR services to a number of our clients. This includes HR Strategy and planning, Succession Planning, Industrial and Employee relations, employee engagement and Employee Performance Management. With some of our clients we look after the complete performance review cycle including working with the client to review performance, develop quarterly performance objectives and to implement salary adjustments. This relationship allows our clients to tap into our expertise and to free up their time to focus on what they
do best — nurturing new and existing client relationships and designing and delivering projects. Look for web-based HR services that incorporate self-service features, letting people manage their own routine tasks where possible — such as printing forms, updating personal details and managing annual leave. You might even expand this to cover ongoing training and personal development. A good selfservice component of your HR system lets people resolve issues quickly while also reducing the paperwork load on managers — letting everyone get on with what they do best.
Does having the right systems make my business great?
Many times I have heard businesses say that “it is important to get the right people” or “we are looking for the right system”. Regardless of the industry, these are common problems at some point in a business’ lifecycle, but what is ‘right’? Having the right people is only the start of developing a great business. The key is to have these people in the correct positions and have their roles working effectively by implementing and using the systems and processes provided by the business. Your people need to know what the ‘chain of command’ is regardless of the structure you use. How decisions are made and communicated must be made clear to everyone inside the business. Not only will having a clear leadership structure assist the business with standardising processes, but it makes the lines of responsibility clear. Too many times we have heard people say “draw a
line in the sand”. These lines eventually wash away, so ensure yours are slightly more permanent!! Having leaders in your business that can drive enhancement and improvement in the business is a must. From this, selecting the right systems for a business becomes easier as these people will help drive the selection of key systems and identify processes that need improvement. It is critical that you select and implement the correct business systems for your business. The beginning of this process should be to start talking internally about what issues you have with your current processes and systems — what’s working, what’s not working, what’s missing, what other systems have your people used and would recommend etc. The next step involves documenting in a clear and concise manner these discussions. This then forms a basic requirements document for you to provide to vendors. The major pitfall most businesses get into is “but we want to do it our way”. This is the biggest mistake we see across any systems implementation. When going through an implementation ensure that your vendor has sufficient local knowledge in your market and a demonstrated history of effective implementation. Then allow your vendor to guide you through the implementation process and merge your current processes with the vendor’s experience. A typical selection process will run through three stages: 1. Ask your vendors to match their system with your requirements brief 2. Have 3 vendors present their products, then reduce to 2 vendors, 3. Have both remaining vendors spend a minimum of 1–2 hours with teams inside your business to gain a greater understanding of how the product will fit your business. 4. Select a preferred vendor and present to the decision makers. The next step is critical, and that is selecting the right team from within your business to take ownership of the implementation. This team should consist of your biggest critics and your biggest supporters. This team will work with your selected vendor to drive the implementation process and help manage change within your business. Then the journey really begins!! A key responsibility for every business owner is to systematise your business. It’s not something you can dwell on. Your Business Systems are one of the key foundations of your business and it is only from having effective systems that you can control and build your business. Your systems should run your business and people must follow your systems. It’s only through having strong business systems in place that will allow you to take time away from your business, knowing that everything is under control, knowing that your team of great people that you trust are following the approved systems in your business and knowing that your team has everything in place to drive the success of the business.
Designing a great business
The business of running an architectural practice requires ongoing focus from business leaders, yet is often neglected in the process of servicing clients and delivering projects. Management for Design is addressing these issues in a series of monthly webinars for the Association of Consulting Architects. In the September and October ACAs – Insight National Webinar, Rob Peake investigates the main elements that make up an architectural business. Looking at people, strategy, business and financial management, legal, brand, systems and delivery, Rob simplified the complexities of business management. The 10 foundations to building a successful architecture practice are: 1. Purpose and Plan 2. Leadership 3. Team 4. Management 5. Systems 6. Financial Control and Profitability 7. Managing Risk 8. Marketing, Communications and Brand 9. Design and Delivery 10. Succession
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People buy why you do it, not what you do
Rob covered the first two of these, Purpose and Plan and Leadership in the September Seminar. For those who missed it, here’s a recap of those first two foundations: 1. Purpose and Plan A business is the vehicle that enables you to shape and control your destiny, both in life and in your career. As such, running a business has the potential to be incredibly empowering if you have a strong sense of purpose and a clear plan and direction. There are a number of questions that business leaders should ask themselves and get clarity on to create a truly successful architecture business: •
Why do you do what you do? As Simon Simek said in his widelyshared TED talk (https://www.youtube.com/watch?v=IPYeCltXpxw), “people buy why you do it, not what you do”. If you can convey your purpose and what really drives your business, those elements will infuse the how and the what of what you do to build a stronger and more engaged company.
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What is your vision? Consider what type of work and architecture you want to do. What type of clients do you want to work with? What are the places you want to be and the people you want to work with? What do you want your work–life balance to look like?
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Does your business match with a gap in the market? Your business needs to fill a need that your clients are demanding.
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What sort of business are you building? Is it sustainable or reliant? How will you balance creativity and profitability, and where do you sit on the spectrum?
Not all businesses need a business plan, a strategic plan, strategic objectives, or even a clear direction. In fact, 95% of design businesses don’t have any of these. It is important to understand that there is a difference between a business plan and a strategic plan. Leaping straight to a strategic plan can help to clarify your business goals. Our research shows that 70% of design businesses do minimal or no strategic planning. Yet a strategic plan takes the core objectives of your business and is the roadmap that will enable you to reach your vision and achieve your goals. Five critical elements need to be in place to make strategy happen: •
Leadership needs to drive the process
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A level of excitement
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It has to be concise with definitive timeframes
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It needs to be flexible
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Consider execution before you the start
Develop measurable objectives — typically over 3–4 years — and specific milestones to achieve these strategic objectives, for example steps to develop a global presence, and assign responsibility from within your team to make these objectives happen. Objectives should be strongly linked to a tangible result, for example receiving unsolicited CVs as an indication that you have achieved the objective of being a great place to work. Have a look at the slides from this session for examples of the sorts of objectives that you might want to set: http://bit.ly/1F5L9w3. Arguably, the leading cause of business failure is the lack of a well-executed strategy. If you are committed to true business success then you need to dedicate the resources to make your strategy a reality. In our experience, execution is what matters, with a focus on the following points: •
Involve the key people
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How will you reward them?
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How will you track progress?
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How will you keep people up to date?
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Where will you find the time?
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Will you share your strategy with everyone?
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How often will you review?
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What support/resources will you need?
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How much are you prepared to invest?
2. Leadership Leaders establish the culture of the business. How important are sound business principles in your business? How do you demonstrate and drive this? Do you have a culture of empowerment? Culture filters down from the top and it is up the business leaders to set the tone. Enthusiasm for your vision, clear strategic objectives that filter through to every aspect of the business and empowered staff will drive your business forward. What are the priorities for your business and how do you communicate these to your team? Talk about what you believe, and address those values in phrases that are inclusive of the collective whole of your staff, using the tone ‘this is important to us’. Great leaders exhibit the following qualities: •
Knowing and challenging your people
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Being realistic (self assessment)
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Keeping to clear and actionable goals and priorities
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Following up and creating energy
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Rewarding those that contribute
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Knowing yourself and setting the example
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Focus on what will make a difference
Typically leaders are in charge of getting things done by running the three core business processes: 1. Setting the direction and priorities 2. Engaging the right people 3. Regularly monitoring progress In most architectural businesses leaders are in charge of generating work, client relationships and design — and they should be great at this. But what about all the areas of the business? For a design business to be successful, contribution is needed across strategy; rainmaking; design, delivery and Innovation; operations; human resources; and financial control. None of this comes to you overnight. It comes through time and experience, a well-constructed plan and your team. To get to a point where all of the areas of the business are covered, you need to balance the time you spend ‘in the business’ and ‘on the business’, often with a split of time across the leadership team to enable this. Business leaders need time out from project-related activities to make this happen. Leaders need to be aligned with where the business is heading and have the ability to communicate this to staff. The most successful leaders will be able to empower their staff, hand over control and give some of the responsibility for fulfilling objectives to others. Your project managers are leaders. Set them up to succeed and push authority ‘down’. The following questions should be asked of your project managers: •
Are they trained?
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How much responsibility and accountability do they have?
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Are they responsible for performance (project deliverables)
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Do they have the information and tools they need
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Are they financially literate?
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Do they embrace technology?
Refer to a copy of the seminar slides for examples of contribution criteria aligned with business objectives. The latest ACA webinar was held on Wednesday 14 October 2015. You can view or download the slides from this session, from the Management for Design website: http://bit.ly/1KBLTED. You can also view or download the slides from session 1, held on 2 September 2015, from the Management for Design website: http://bit.ly/1F5L9w3.
The next ACA Business of Architecture webinar series will be held on Wednesday 11 November 2015. For more details about this next event, keep an eye out on the ACA website: http://bit.ly/1P1zznx.
Business Conditions Survey
Each year Management for Design conducts a Business Conditions Survey. The aim of this survey is to assess the prevailing economic and business climate and to drive thinking and decision making. In turn the results assist businesses to work through current circumstances and deliver sustainable growth. This year’s Business Conditions Survey has now closed. We are compiling the results so stay tuned for our insights on the industry — coming soon.
Director Obligations Like any business, architecture and engineering firms are obliged to adhere to strict rules and guidelines related to the legal obligations of a company. In this article, we cover the main points that you need to be on top of to ensure that your business is operating in line with your legal obligations. From the moment your company is registered and you have obtained your ACN from ASIC, you must remain completely up-to-date on what your company is doing, and may need external professional advice to understand the fine print and make informed decisions. Always keep financial records and reports, so you can monitor your company’s monetary position and performance for tax purposes. Keep some financial records electronically (and make regular backup copies of them), but
remember you must be able to convert them into hard copy so that you can provide them to anyone entitled to inspect them. It is only natural that things evolve, but you must keep ASIC informed of changes in your company’s details, such as: •
Change of name (205);
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Change of registered office (form 484);
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Resignation of director or secretary (form 370);
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Change of officeholders or their details (form 484);
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Change of place you keep registers (form 909);
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Change of company review date (form 488),
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Issue of new shares (form 484);
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Negative solvency resolution (form 485);
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And many other changes.
The Corporations Act requires you to tell ASIC about these changes within a certain time period. If you tell them after this time, you may have to pay a late fee. Personally, this is what the law expects from you: •
Be honest and careful in your dealings at all times.
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Know what your company is doing.
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Take extra care if your company is operating a business because you may be handling other people’s money.
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Make sure that your company keeps proper financial records and can pay its debts on time.
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Act in the company’s best interests, even if this may not be in your own interests, and even though you may have set up the company just for personal or taxation reasons.
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Avoid using any information you obtain through your position to gain, directly or indirectly, an advantage for yourself or for any other person, or to harm the company; this may be a crime or may expose you to other claims. This information need not be confidential; if you use it the wrong way and dishonestly, it may still be a crime.
As the director of a business, you can become personally liable for decisions made in your
capacity managing your business. Therefore, it is critical that you understand all legal obligations imposed on your role. In order to limit your potential exposure to personal liability, you should obtain proper advice in respect of the primary legislation that applies to the activities of the company and the obligations that are imposed by the legislation on both the business and the directors. You are unlikely to get in trouble if you are careful in dealing with the business and on its behalf to others. If you ensure that proper procedures exist and are followed in time; keep yourself informed about the financial position; give the interests of the company, its shareholders and its creditors top priority; understand your legal obligations and get professional advice when in doubt. Please note this article does not cover the whole of the relevant law regarding your obligations as a director of a small business. Obtaining appropriate legal advice is recommended in respect of the matters set out in this publication. More information can be obtained from www.asic.gov.au.
Improve project planning and optimise your profit margins For architecture and engineering firms it is difficult to protect margins. Some expected revenue gets lost in the project planning stage, compromising the profitability of future tasks. So what can we do to improve project planning and manage margins? Top challenges Many firms struggle to protect their margins; some of the main reasons are: •
Lack of visibility into information: some firms end up having more than three systems to manage projects.
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Inefficient or inaccurate tracking and reporting: leads to costly mistakes and overspending in unidentified places.
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Managing delivery to meet customer expectations: this becomes especially tricky when dealing with constant project scope changes.
Top performers in architecture and engineering industries rely on a combination of technologies and improved processes to deliver projects to deadline and below budget. At the same time, they have to manage back of house processes that are very time consuming.
Achieve the profitable project There is plenty that can be done to manage margins successfully and make projects profitable: •
Strive for better visibility: the right people should have access to the right information at the right time in order to create an accurate plan. A centralised, integrated and consolidated system helps achieve the right information flow. It also helps businesses learn from previous projects and mistakes by having old projects easily archived and accessible.
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Keep track of finances: protect your margins by, first of all, knowing them. Then stick to budgets and timescales that have been correctly planned.
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Timely project delivery: with cross-departmental visibility, all employees are more likely to get involved, so project delivery is not just the firm’s or the project manager’s responsibility.
A successful project lifecycle should connect business development, project management and bookkeeping. M4D can help you improve your visibility and automate your firm’s admin with a single and unified business system. This will avoid future costly mistakes by improving your processes and planning.
Onsite health checks for your IT systems
Do you feel your IT systems are falling behind your business needs? Data volumes have exploded in the design, planning and engineering industries. Information in itself has become a commodity and staying in full control of your business’s information resources is essential. Your business systems should be in sync with continuity plans. They should include cost-effective data and phone plans — an area where many businesses are overspending — and should ensure license compliance to protect your business. Management for Design deliver IT Services to support and protect your business, ensure your IT strategy is aligned with your commercial objectives and bring savings to your bottom line. We provide onsite checks to assess your current IT Systems in line with best practice and industry standards and include: 1. Systems review 2. Business continuity review 3. Phone and Data costs review A thorough check of your system will allow you to discover imminent risks to your systems and your business, discover opportunities for improvement in productivity, learn about the perception of IT in your organisation, and gain an indication of where your business can save money. If you are interested in getting an IT Health Check for your business, we are offering a limited number of free and obligation-free checks, although we would be delighted if we could assist in any way to ensure the ongoing success of your IT Systems and, therefore, your business in any capacity. IT Health Check Get in touch for further information: info@m4d.com.au.
READING LIST Each issue, Management for Design selects reading material that may be of interest to design businesses. Our spring issue selection follows: The E myth Architect Michael Gerber / Norbert C. Lemermeyer Liberate yourself from the predictable and often overwhelming tyranny of unprofitable, unproductive, and time-consuming routines. Transform yourself from a successful architectural technician into a successful architect-manager-entrepreneur and rethink your practice, shifting from tactical to strategic thinking.
How to work a room Susan Roane How To Work A Room lays down the fundamentals for savvy socializing, whether at a party, a conference, or even communicating online. Roane shows how to overcome the five roadblocks that keep most people from making new contacts.
The ABC of XYZ Mark McCrindle Understanding the Global Generations is designed for educators, business managers and parents who want a short and lively introduction to Australia’s living generations. The book explores what a generation is, how its definition has changed over the years, and the trends that are emerging for the future.
Into thin air Jon Krakouer This updated trade paperback edition of Into Thin Air includes an extensive new postscript that sheds fascinating light on the acrimonious debate that flared between Krakauer and Everest guide Anatoli Boukreev in the wake of the 1996 Mount Everest tragedy.
Drive Daniel H. Pink In this provocative and persuasive new book, Pink asserts that the secret to high performance and satisfaction-at work, at school, and at home—is the deeply human need to direct our own lives, to learn and create new things, and to do better by ourselves and our world.
MANAGEMENT FOR DESIGN
Management for Design provides integrated business systems and services to the design industry across Strategy, Finance, Information Technology, Human Resource Management and Business Systems. By working with Management for Design our clients are enabled to focus on what they are great at and to control and build their businesses. For more information visit www.m4d.com.au or phone 03 9645 8834.
