The Employee Management System

All organizations are made out of people, and all companies need people who are ready to contribute. But people inside agencies and consultancies play a different role as opposed to people inside product companies. If you run a service company, your employees are building relationships with your customers. Inside a product company, this relationship doesn't exist. Your customers have a relationship with your product, your brand, and maybe with your sales people, but not with your designers and developers.

Since as an agency or a consultancy your employees are part of your offering, you can't really ignore employee performance whenever you're discussing things like growth and profitability. Employee performance plays a part in making sure that you help your customers reach their goals. In return, satisfied customers lead to more business and better projects.

Employee management refers to all the actions taken to help employees succeed at their work. Frances X. Frei from Harvard Business School talks about employee management systems and how to design them: Your employee management system is badly designed if your employees need to stretch themselves to the limit over and over again in order to succeed. Well designed systems give employees a reasonable chance to succeed with a reasonable amount of motivation. You shouldn't rely on heroism to get the work done. You can read more about Frei's points here.

Inside your agency, employee management is not another HR function. HR is back office work. How good will it be at building systems that fuel customer success? Does it have the required experience, knowledge, and empathy for understanding customer-facing work and the realities of consultant work? A change in your employee management system is a change in your strategy.

So how do you help your employees achieve excellence? Approach this question from an engineering perspective and you can see opportunities to codify consultant work into a process with detailed steps. Achieving excellence won't require excellence from your employees but compliance instead: great work will be a result of meticulously following the given instructions. However, translating creative work into systematic code is not going to be possible for you as an agency. Creative work involves unpredictability which makes all attempts to create comprehensive manuals or handbooks useless.

This doesn't mean that you won't have a process. It just means that no process will be ever enough. Yes, you will have parts of the work that can be codified, you will share tools, you will adopt company-wide practices, and you can approach problems with specific mental models or frameworks. But you can't replace your employees with assembly line workers.

Recruiting is going to be a part of your employee management system. You can have your employees succeed at their work by hiring the "perfect" people: people who are exceptionally good at what they do and who's skills match perfectly with the requirements. Service excellence will be a result of individual excellence. However, here are the problems with this design:

• You can't find enough people with the right skillset.
• You need to pay a premium for exceptional skills (or provide work that is exceptionally motivating).
• You don't have room to hire for potential. Your system can't handle people who are still learning.

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Designing an employee management system looks more like wayfinding and less like meeting specifications. Recruiting will be a balancing act between skill, cost, availability, and potential.

The environment you operate in will continue to change. People will join your company and they will leave. Since change is the only constant, maybe the following two questions, asked regularly, can provide you with direction:

• What does great work look like?
• Why isn't all our work great already?

"What does great work look like?" forces you to define excellence. You can't move towards a goal if you don't know what the goal is. "Why isn't all our work great already?" assumes that everyone wants to achieve excellence but there are forces blocking them from reaching this goal. Find and remove those blocks and you'll make progress.