People Managing

Human Resource Management

No management cliché is pronounced with more fervour but less sincerity than 'People are our most important asset.' That old chestnut happens to pay off, though - if you treat human assets with the same care and attention that are brought (or should be) to plant, equipment and premises.

Several companies featured in this column have rightly laid great stress on their people policies. Edward Smith of John McGavigan Automotive Products called his employees 'the experts'. To 'exploit the potential' of these people, McGavigan invested heavily in 'training, teams and communication.'

McGavigan's a manufacturer. But David Craven of NST, selling educational tours, is just as emphatic on the need to find and develop 'very highly motivated, skilled staff.' Two advertising men, Richard Hall and Richard French of FWWH, chime in: 'only work with people you like, know and trust - and never underestimate their abilities.'

People also provide a dominant theme for the Department of Trade and Industry's drive to improve national competitiveness. Winning sums up a study, carried out with the CBI, of 121 best-practice businesses, which 'unlock the potential of their people' by....

1. Creating a culture in which employees are genuinely empowered and focused on the customer.
2. Investing in people through good communications, learning and training.
3. Flattening and inverting the organisational pyramid.

What those fine words mean in real life - and smaller companies - is shown by three case histories. The first, Navico, makes navigational equipment and waterproof radios for the recreational market. Freeing its 90 employees, who were stuck in an old-fashioned, highly supervised, multi-layered hierarchy, required drastic action.

The boss, Mike Bowerman, closed the factory for two days, took everybody to a hotel and explained why everybody had to change. He 'advertised' for 'team leaders': three out of four came from the shop floor, not from the supervisors. He also nominated 'product champions', people 'who have a desire to drive and get things done.'

Leaders and champions alike went on a training course in the modern technique of cellular manufacturing - and every employee in the factory was retrained: all are now multiskilled. In two years, Navico's turnover rose by 70% to £5.1 million - and profits did even better, advancing over eightfold to half-a-million.

At Dutton Engineering (Woodside), 25 people make precision stainless steel enclosures for the electronics industry. Turnover per direct employee has risen by half since 1991, following the introduction of team working - and trust: 'The men and women on the shop floor', says Ken Lewis, 'are skilled enough and professional enough to make it right in the first place.'

That wasn't an easy idea for Lewis's managers to accept. Instead of giving orders, they had to learn to 'coach, facilitate, lead.' The teams themselves had inhibitions to overcome, too. Introducing a system of annual hours changed their thinking: 'Once the tasks for that week were finished, the team could go home. They worked a lot more effectively once they realised that.'

At Sunrise Medical, managing director Barrie Payne also used focused teams in his winning people formula. The 370 employees, making custom mobility products for the disabled, are encouraged to find their own ways to do things better - and once a month the factory closes for half-an-hour to praise their achievements.

That means 'anything an individual has done, however small, over and above what they might be expected to do.' The achievers get entered in a prize draw. That doesn't sound like a big deal. But small, low-cost, original ideas can produce big incentives and large results - like Sunrise's eleven years of 20% compound growth.

Managing people imaginatively isn't the only winning way you need, of course. The DTI-CBI studies also drum home the importance of constantly innovating in products and services - and of really knowing your customers. But people are also the keys to innovation and customer service.

At Navico, everybody went sailing to get in the same boat (so to speak) as the customers. Dutton's manufacturing cells have direct customer contact; so does every Sunrise manager. As Winning says, 'Winning companies know people make the difference