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The Vacuum Effect!
Written by: Nicholas FraserArticle Overview: The Vacuum Effect! It is interesting how similar situations appear as you go through life. I suppose when something happens once you become more aware of when it happens again. Anyway this month I had a couple of instances of what I will call “The Vacuum Effect”. This is where in companies or organisations you have a key employee leaving with a consequential effect on the rest of the business.
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The Vacuum Effect!
The Vacuum Effect!
It is interesting how similar situations appear
as you go through life. I suppose when something happens once you become more
aware of when it happens again.
Anyway this month I had a couple of instances
of what I will call “The Vacuum Effect”.
This is where in companies or organisations you
have a key employee leaving with a consequential effect on the rest of the
business. In one of my clients they lost an FD at the beginning of the year.
Now they filled the position by using a junior employee supplemented by a part
time FD. In one sense this worked very well delivering the key financials and
management reports the business needed. But there is more to an FD than that.
So one of the other Directors in the business filled the vacuum and took over
the responsibilities not being delivered. However the consequence of that was
that his planned key activity for 2008, to take over a new department was
constrained. That meant the person who he was to take over from was constrained
from moving to take over another area (HR in this case). This meant that all
the other departments who were expecting HR support were disappointed. So it
has ended up with an imbalanced organisation and the overall plan not being
delivered.
I found a similar set of circumstances the
following day after reviewing the above with another client. Here though it was
do with a subsidiary in China.
A key director left in Dec 2008 and he was never fully replaced. This was due
to the economic conditions in China
and Hong Kong. A real growth economy makes for
difficult recruitment and potential gaps appearing at any moment as key
employees leave or are poached. Again plans are constrained due this resource
shortage.
Both cases highlight the need to have a clear
Human Resources Strategy with plans and contingencies to recruit and retain
staff as well as back up activities in case staff leave. One tool I recommend
is to place your staff in the following matrix box. Each member of staff has a
propensity to leave (Low, Medium and High) which might be due to market
conditions, role or the person. The other side is the effect of their departure
on the business and the delivery of its business plan. Again graded from Low,
Medium to High
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Likely to leave? ---->
Importance to Business |
Low
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Medium
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High
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Low |
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Medium |
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High |
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You need to focus on those most important to the business and most likely to leave but then you should also focus on all those who are important to the business as a matter of course. Good businesses come up with plans to retain staff and back up those who might leave with others who are less likely to. Obviously I can help in this activity.
Why don’t you fill in this chart for your business or organisation and see what it tells you. If you don’t then you are likely to find yourselves suffering from
The Vacuum Effect!
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About the Author: Nicholas Fraser RSS for Nicholas's articles - Visit Nicholas's website  He is currently splitting his time with running a new software startup Newera Controls - an exciting Energy Management and Control application and is in the process of raising Venture Capital to launch it worldwide. Click here to visit Nicholas's website   Understanding the market Building Windmills So what do you know or what do you think you know Trapped by your business Customers and Competition Love them or Hate them |
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