Q&A: Professor William Scott-Jackson: “SMEs need structure and strategic HR”
Author: Kirsty Tuxford | Date: 09 Dec 2015
But HR mustn’t get in the way of a growing business, says the chairman of Oxford Strategic Consulting
When an organisation gets too big for one person to grasp, it’s time to call on strategic HR capability, says Professor William Scott-Jackson, chairman of Oxford Strategic Consulting. One of the most respected HR and management commentators in the GCC, and a visiting academic at Oxford University, Scott-Jackson has turned his attention to smaller businesses – and, as he tells People Management, knowing when and how to deploy HR is a key decision on their road to growth.
How should entrepreneurs think about the structure of their businesses?
SMEs need a structure of leadership no matter how small they are so that vision, direction, decisions and motivations can be coordinated. They might not need a functional structure (finance, IT, HR, sales) until the roles become big enough for full-time employees or demand specific expertise, and even then it is easy to outsource functions as needed. So I would advise focusing on a sound leadership structure and outsourcing many of the functional roles until the SME grows enough to really stretch the functional needs.
At what point should a small business employ a full-time HR professional, and what are the options if they aren’t ready?
Many GCC leaders have told me that most of what the HR function should do is actually the job of the leader (engagement, productivity, recruiting great people, vision, communication, discipline etc), and they find that HR sometimes gets in the way. The presence and ambition of HR can allow line managers to abdicate their responsibilities for people management. Leaders do need specific capacities related to personnel, employment law, visas, and admin, but this can be outsourced or done through IT.
However, it takes a very capable leader to manage all the softer, strategic aspects of HR and, more importantly, to make sure that as the firm grows all the leaders are equally capable. Strategic HR is needed when the organisation gets too big for one person to grasp and when the issues require specific expertise.
How can SMEs fight above their weight when it comes to attracting and retaining talent?
Identify the core distinctive capabilities for the organisations and focus hard on building these capabilities while outsourcing or contracting everything else. So a smart, unique web company should build web expertise and outsource, for example, accounts. Focus retention, development and money on the strategic capabilities and get the rest from 'pay as you go' expertise.
SME leaders should build these capabilities and gain loyalty based on great leadership, development and challenge. SME leaders should also give ownership to key skilled people (in both decision-making and sharing in success) and reward the key capabilities instead of focusing exclusively on management hierarchy, age or length of service.
The key requirement for an SME leader is enthusiasm, optimism and the ability to inspire these qualities in the whole team. This is, interestingly, a particular strength of the gulf leadership style (identified in a paper I contributed to, 'The Gulf Leadership Style: The Perils of Best Practice'), which stresses relationships and sees the organisation as family.