Key person risk – Is your organisation vulnerable?

If your business depends on you, you don’t own a business – you have a job. And it’s the worst job in the world because you’re working for a lunatic!
– Michael E. Gerber

Organisations can live forever, but people cannot. In the UK, the oldest not for profit organisation is said to be King’s School, Cantebury which was established more than 1400 years ago in 597.

There are many factors that contribute to the longevity of an organisation and one of them is ensuring that key person risk is mitigated.

An organisation has key person risk when it is highly reliant on one individual or individuals. Whilst employees with unique skills and knowledge are an invaluable resource to have, what happens when they leave? A simple test is to ask yourself, how would the organisation operate without that person? On one extreme, a one-person organisation simply would not exist if that person stopped working for any reason. And whilst key person risk may not always result in the organisation ceasing, it may cause serious pain. If not properly managed, the loss of a key person can result in a productivity downturn and a decrease in profits, as well as effect the confidence of other employees.

If your organisation has key person risk, the question arises as to whether or not you want the organisation and the services it provides to outlive the working life of that key person. If the answer is yes (it usually is!), then you must mitigate all key person risk. This can be done by developing systems and processes, automating workflows and cross-skilling staff.

A first step is to take stock of the key individuals in your organisation and assess whether those people may be a “key person risk”. Senior roles are often the first to come to mind, but ensure all key roles and responsibilities are reviewed, even the unsung heroes of the team, who other employees turn to for assistance and support. In many cases, it could well be someone in an administrative or assistant role who does more in and around the organisation than you realise. It is only when they leave that their true role and responsibilities become obvious.

Once you have identified any employees that pose a key person risk – and it may even be you – the next step is to look at your current systems and processes. In order to mitigate key person risk, you must develop or introduce new systems and processes that are independent of a particular person and can be executed by any appropriately trained person within the organisation.

Consider your current business model and structure. Are there individuals within your organisation that are the sole holders of important knowledge and relationships? Spread that knowledge through cross-skilling. Not only will the sharing of information and skills help to nurture teamwork and cooperation, but it will enhance the talents of employees for the long-term benefit of your organisation.

Succession planning is also important, particularly if you identify a senior member of your team as being a key person risk. And if you are aware that they are planning to retire in the near future, then you need to start looking ahead… Having them mentor another member of your team may be a great way to make the key person feel appreciated and valued, but also allow them to share the high-level knowledge they’ve acquired through years of experience.

The effectiveness of your efforts to mitigate key person risk can be easily tested by removing the key person from the organisation for a trial period, either whilst they are on leave or secondment. Did things fall apart as feared, or did the rest of the team step up with a “can-do, business as usual” attitude?

If you can identify employees who pose a key person risk to your organisation, and you’re not sure how to tackle it, get in touch with our team. CBB has several consultants with experience in processes mapping and the streamlining of organisational systems and processes to help you mitigate key person risk.

For an obligation free consultation, please contact us on 1300 763 505 or email consulting@cbb.com.au.

 


When leadership is an impossible job

Impossible leadership

As a Brit living and working in Australia, I’ve been reflecting on the mess that is Brexit, and, in the wake of Theresa May’s resignation as British Prime Minister, what it tells us about leadership, and the impossible job. Leadership – given its embeddedness in individual and organisational psychology – is a complex topic. There have been millions of words written about it, some based on sophisticated studies, and some of which are probably nonsense. What follows are my personal reflections and observations based on a 25 year career of working with leaders, and being in leadership positions myself. Central to the meaning of ‘leadership’ is that it requires followers. I’m not a fan of the term ‘followers’ because it implies subservience – definitely not something I want from the people I work with. However, leadership does require a team. You can’t lead in a vacuum, or without vision. These are the two key features that have been lacking in the last three years of the British Prime Ministership, making leadership a near impossible job for Mrs May.

  1. Leadership rests on shared vision

Rule #1 of leadership: develop a vision – or at least some common goals and objectives – that your team can commit to. With significant divisions within the UK Conservative party regarding the shape Brexit should take, Mrs May has been unable to build consensus within her own team. The same weekend that Mrs May resigned, I read articles about the Australian Federal election, and the anti-vaxxer movement. Both cited research showing that, when presented with evidence that contradicts their opinions, people hold on to their existing opinion more strongly. Our human tendency to look for evidence that validates – rather than challenges – our viewpoints, coupled with social media’s propensity to present more of what we like, means most of us live in an echo-chamber with inadequate perspective on the broader world. More dangerously, we heavily criticise politicians for changing their standing on an issue, making them reluctant to actually listen to evidence and shift their position. One British political commentator, Peter Oborne (who was a Brexiteer) has publically changed his stance on Brexit and urged others to do the same. Although his story has been widely shared, it’s had little impact. Instead, positions have become more entrenched and more polarised, and the behaviours more vicious. Little space is left for negotiation or compromise, and there’s scant hope of creating a shared vision across the ‘team’ responsible for delivering Brexit.

Shared vision depends on diversity and a healthy culture

We hope that, in our professional lives, we operate with a more open mindset, with the capacity to take on board new evidence, and alternative perspectives. This is why diversity in teams – of experience, perspectives and thinking styles – is so important. Challenging and testing assumptions is critical to busting groupthink and building a robust, shared vision that everyone can get behind. But to build a consensus, you need a safe environment for constructive challenge and considered debate. It’s pretty difficult to have honest face to face discussions if everyone’s watching their back and waiting for the next manoeuvre. Which brings us to point two…

  1. Leadership requires team support

Leaders are only as good as their teams. Team support is vital to getting the work done, in thinking through challenges, in creating new opportunities, in innovating improvements. You can’t do it alone, and you certainly can’t do it if your team are fighting and undermining you (and each other) all the time. This has clearly been another major challenge for the UK Prime Minister. It’s not necessarily a bad thing to have people in your team that want your job (and who have the competence or potential to do it). They can stretch you as a leader and build a pipeline for succession. What’s not good is having people that are openly hostile and trying to unseat you. Exit Mrs Theresa May, British PM.

Build a stronger team with clear behavioural expectations.

While we would hope for better behaviours in the workplace, people’s professionalism can’t always be assumed. A behaviours framework that sets explicit and objective expectations of workplace behaviour – towards each other, clients and stakeholders – is useful here. Formalising a behaviours framework gives you criteria against which you can recruit and select new employees, and manage those whose behaviours undermine the integrity and values of your organisation.

Support for Leadership

Whilst we hope that the febrile environment of national politics is not played out in not for profits across Australia, organisation cultures – and organisation leaders – do need to be nurtured and cared for to keep them healthy. You can read more about how to avoid a toxic workplace here.

If you have concerns about the culture in your organisation, or you’re a leader that needs a bit of external support, get in touch with Jane:


Jane Arnott
General Manager, Consulting and Business Services
Email: jarnott@cbb.com.au
Phone: 1300 284 364


Is your workplace toxic?

Danger sign on office door

It was disappointing, but unsurprising, to read recent articles in Pro Bono and Third Sector on the toxic culture at Amnesty’s International Secretariat in the UK. The response of the Australian Unemployed Workers’ Union was similarly unsurprising – effectively stating that toxic work cultures are present in the Australian not for profit sector too.

Continue reading…

Lessons learnt from NDIS Transitions

For the last 18 months we have been assisting nearly 100 disability providers in SA with their NDIS transition journeys.  It has been an interesting ride and a steep learning curve for all involvedLessons learnt NDIS (clients and consultants alike) as we’ve ridden through the white water NDIS landscape.  As the year is coming to a close and our direct involvement with our current clients is coming to an end, it is time to reflect on the strategic impact of the NDIS in a People and Culture context. Continue reading…


Talent Management Part 4– Measuring success

In this Talent Management series (Part one: Do you have a lack of talent?, Part two: exploring the employee journey and Part three: getting confused with definitions?) we have defined Talent SuccessManagement as a series of interconnected development activities that when executed thoughtfully, add value to the employee journey and the organisation’s brand.

As our sector continues to grapple with the VUCA environment and shrinking risk appetites from Boards and executive leaders, there has never been a more crucial time to invest in our organisations. This puts pressure on workforce leaders to provide evidence based measures of program success. Continue reading…


Talent Management Part 3 – Getting confused with definitions?

Are you getting confused about all the definitions that are thrown into the conversation when we manage and develop our talent?

If you answered yes, you are not alone. It can be a real turn off for operational managers to deal with ‘HR speak’ at the best of times. Being crystal clear about what we mean becomes an important part of our organisation’s underlying approach to Talent Management. Our managers and leaders are the major stakeholders and drivers of our Talent Management efforts, and so it becomes our responsibility as HR professionals to make it as easy as possible to reduce confusion and inspire engagement. It is easy to get into semantics when we are developing our terms of reference and essentially at the end of the day, it doesn’t really matter which words we use to describe what we mean. The most important thing, is that we develop a shared understanding across the whole organisation.

Here are the five key definitions that we regularly use and what I think they mean in the Talent Management context:

Continue reading…


Talent Management part 2: exploring the employee journey – it’s a marathon, not a sprint

Talent management: the employee journey marathon

In my last article of this Talent Management series, we concluded that Talent Management (TM) was not a stand-alone activity that can be ‘done’ to people.  It is the compounding effect of people practices, leadership and thoughtful execution. As a definition TM is having robust people and culture structures, practice and initiatives that when combined add value to the employee journey while enhancing organisational brand. Continue reading…


Talent Management Series – Part one

Do you have a lack of talent? It could be a reflection of the leadership culture

Often in my consulting work I am asked to help ‘fix’ the culture of a team, unit and in some instances, a whole organisation. So as I listen to leaders describing the unproductive behaviours, workforce issues and customer problems, I ask questions that help to uncover why these issues have arisen in the first place. Continue reading…


Customer loyalty – it’s simple yet complex

Loyalty is hard to come by these days – even in the not for profit sector.  Our communities are becoming more sophisticated, informed and savvy about the services they chose to engage in.  For community based organisations the issue with developing customer loyalty is not attracting new customers – it’s more about how we retain them.

Our regular customers need to walk away from every type of interaction feeling better than the start.  Think about it this way – every time you meet someone’s expectation you have only partially engaged them for their next visit.  If something newer or different comes along they may tempted to ‘check them out’.  We need to continually exceed expectations so when other options come their way they think – ‘nah I love where I am now’ or the best case scenario is that they don’t even see your competitors – it’s not even on their radar to try something else.

Loyalty is about creating a sense of allegiance in your customers where they become your advocates rather than a transactional customer.  Here are five ways to promote a sense of allegiance in your customers. Continue reading…


Customer Service or Customer Experience?

There is no doubt that consumer directed care has placed our service standards under the spotlight.  In a market place that is becoming more crowded and noisy, finding that special ‘something’ to attract and retain our customers has become a necessity for survival rather than a ‘nice to have’.  With so much focus on packaging effective and efficient products and services, the disability sector has come to the harsh realisation that ‘commercialisation’ and ‘bottom line’ results are now standard items on the strategic agenda.  The attraction and retention of our customers has become a vital part of our organisation’s success.

To keep our doors open we need customers that Continue reading…