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HRM TV: Effective people management strategies

When Jan Pacas arrived in Australia in 2009 to head up the power tools company Hilti, it wasn’t in great shape. Now, it’s an award-winning and financially successful organisation that mixes old-school style with Aussie flare for effective people management strategies.

In 2009, the effects of the Global Financial Crisis were still reverberating around the world. Australia had weathered the crisis better than most, but economic growth had slowed to about half a percentage point and unemployment was rising.

Jan Pacas, born in Prague of German parents, was only 32 and the international chain’s youngest chief executive. He had moved rapidly up the ranks, first as marketing manager for the Czech & Slovak Republic; then in Switzerland as a global marketing manager for the company.

In Australia, he faced a company that was struggling to increase its market share, and the workforce was more likely to speak its mind to the boss than follow the hierarchical management structure found in Hilti’s European divisions.

The solution? To paint the town red. Literally.

“Our corporate colour is red,” says Pacas, explaining that he wanted to see that colour splashed over more job sites, and over an ever increasing share of the B2B, retail and online sales markets.

The vision to paint Australia red was one thing; executing it meant investing heavily in the company’s people management strategies and corporate culture, and making sure all staff felt they could play a role in growing the business.

Rather than importing an exact replica of the Hilti management model from overseas, Pacas chose to work with a flatter management style typical of many Australian companies. But he was also determined to have a senior management team made up of the very best people in the business.

“The vision is only the start of things,” says Pacas. “How you bring it to life is the key. You have to have a lot of discussions with your team every day. We invest heavily in management, in leadership, and we make everyone accountable.”

The benefits of a strong management team always flow down the employment chain, says Pacas. If managers clearly explain a company’s vision and lead by example, staff are more likely to strive to meet their own performance benchmarks.

It’s a strategy that has paid off. In six years, Hilti’s Australian operation has almost doubled its business, says Pacas.

There has been a professional pay-off too. In December, Pacas received AHRI’s 2015 Lynda Gratton CEO Award. The award recognised his use of best practice people management to achieve positive results for the company.

Hilti Australia has also received Aon Hewitt Best Employer accreditation four times in as many years, and was awarded ‘Best of the Best’ status by the HR consultancy in 2011.

Genuine staff engagement will nearly always help drive financial success, but Pacas says there is a line between making staff feel happy about their workplace and creating a competitive culture. He says it’s not enough to be a nice guy, but he doesn’t want to encourage a dog-eat-dog mentality among staff.

“You need to find the ‘sweet spot’ between those two things.”

Pacas says it is a big mistake to believe problems can be fixed by simply getting rid of old staff and hiring new people. It can be financially and strategically better to invest in the current staff.

“If we lose someone because it did not work out, we consider it our fault,” says Pacas. “We have very selective criteria for hiring; we are looking not just for technical ability, but for attitude and cultural fit.

“We act on suggestions from staff. Some of the questions in the survey are quite confronting, such as ‘Do you trust your senior managers?’. If the result is only 80 per cent saying ‘yes’, we work hard to fix that.”

He says there can be scepticism about people management strategies and styles that talk about things such as vision and integrity, “but maybe those companies aren’t communicating properly.”

Among other things, Hilti cites courage as a core value of its corporate culture. Pacas says that in part means having the courage to focus on long-term goals.

“It is the courage you have to have as a CEO. We are all under short-term pressure to deliver results … but the focus is on having a long-term competitive advantage.

“There will be a lot of intense discussions every day and it is an illusion to think you can change things quickly.”

Applications are now open for the 2016 AHRI Awards and close 20 May. If you would like to nominate yourself or a colleague, your team or your company, click here to learn more.

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