Practical risk management: how investing in frontline people skills can improve your bottom line

September 6, 2015
FCB Workplace Law

The joy of developing people

Over the last 12 months, I’ve had the privilege of designing and delivering a major training project for a fantastic engineering client (of course, all our clients are shades of fantastic). This particular business had committed to improving the skills of their line managers across the board, with one senior manager telling me this:

‘We identify our good people and then promote them because they are very good at their job. Then we expect them to lead others. It’s only right that we equip our people with the skills to lead others otherwise we should expect them to fail.’

It has been a real joy working with this client, not only because they recognise and value the importance of people skills, but also because they back up their words with action and invest in the training needed to develop them. From a personal perspective, it is also incredibly satisfying to see a group of managers enter a training room looking unsure, then leave at the end of the day walking taller, smiling and expressing new enthusiasm to both challenge and support their teams towards improved productivity. It sure beats watching them walk out of a court room having just been cross-examined mercilessly on whether they treated someone fairly!

At FCB we believe that our clients’ line managers are often best placed to proactively develop workforce performance and identify potential problems before they arise or escalate. In the words of one former CEO:

‘In my experience, frontline managers are the key to bringing such an organisation to life. After all, they are directly responsible for managing the vast majority of a company’s employees and, therefore, have exceptional leverage on company performance.’1

To make the most of this leverage, however, line managers need to be empowered with sufficient skills training, as well as specialist HR support to coach and guide them through complex and challenging scenarios.

The right training

The available data strongly supports both the productive benefits of conducting training and the countervailing risks of ignoring skills development.2 Sadly, however, surveys also show that, at all levels, executives believe the little training they do receive often fails to prepare them to take on leadership roles successfully.3

In our experience, most managers these days already attend at least some form of basic legal issues training on a variety of employment and industrial relations issues, for example: health and safety, unfair dismissal, discrimination, etc. As such, they are usually already keenly aware that their direct reports can make all sorts of legal claims if they want to dispute a dismissal, disciplinary action or even an organisational management decision. Simple legal issues sessions, however, rarely inspire practical confidence and often have the counter-productive effect of scaring managers into unhelpful inaction or even ‘work around’ behaviours aimed more at avoiding a perceived legal risk rather than achieving a desired outcome.

For example, during 2014 alone my clients have shared with me some truly sub-optimal and frustrating practices, such as:

  • The business unit manager who restructured his whole unit, just to avoid running a simple performance counselling process for one serial underperformer
  • The project manager who habitually puts poor performers on the deployment list, making them ‘Someone Else’s Problem’4
  • The employer with no centralised system for tracking staff performance, good or bad, from one project to the next
  • The team leader who swore one of his team had been underperforming for years, despite signing off on a series of glowing performance appraisals
  • The Head of Sales who accepted an offer from a sales executive to resign rather than be performance managed (without a deed) but was then gobsmacked when the sales executive turned around and sued for unfair dismissal!

There are more of these examples, and they regularly run the risk of ending up as litigation files in our law practice. I have no doubt similar examples occur right across the almost 15,000 unfair dismissal or almost 3,000 general protections claims (for dismissals) filed in FY2014.5 What I regularly see in our law practice are clients with highly trained and effective professionals, who are being tasked with leading teams of people without the benefit of skills training to properly equip them to do so. The result is that instead of leading the business towards improved outcomes, they end up adding costs, by inadvertently creating a new need for legal advice or representation. Those same high performers then run a risk of falling into performance management themselves, when they fail to cope or live up to the unrealised expectations of their new role, or leave when the role does not meet their expectations.

Improving the bottom line

Practical training can’t just focus on legal rules. It needs to address the real life scenarios that managers face and help them plan and prepare for those challenges as and when they arise. For example, how many new managers really receive training on:

  • How to keep driving improvement within their team without appearing disrespectful or negative about previously hard earned success?
  • When is it ok to make a subjective human resourcing decision because there’s no ‘right’ answer?
  • How to articulate the reasons for a decision in a way that minimises risk?
  • How to choose between two worthy candidates?
  • How to communicate the same information in different ways for different audiences?
  • How to recognise situations that trigger their own emotional ‘fight or flight’ response and how that can affect relationships with their staff?
  • How to keep records of performance discussions and why it is important?
  • When internal communication about performance management is appropriate or should be avoided?

In our experience people skills are often undervalued in Australian organisational culture in part because they are difficult to measure. For many employers, however, developing these skills is the single most practical step they can take to improve workforce productivity and generate improved returns. Empowered people managers inspire trust, respect and better performance from their teams by:

  • Authentically and clearly communicating the values, policies and procedures of the organisation, in order to guide and explain their decision making
  • Consistently challenging performance or conduct that isn’t aligned with those values and expectations, but also giving credit as and when it’s due
  • Confidently tackling the most difficult or important conversations, even though they are challenging.

Managers who have these skills improve productivity and minimise legal risks: they don’t have to choose between one or the other. And, if things do go bad as they inevitably can, they are also the best people we could hope to put in the witness box (or in front of a media scrum!) to explain, justify and ultimately defend you against legal claims and reputational risk.

What are people skills?

Business leaders and HR directors tell us that ‘people skills’ are among the top 3 attributes needed by their future leaders.6 But what does this really mean?

What are people skills? Here are some examples of key skills we focus on when training people managers.

Persuasive communication

It’s one thing to understand the legal rules that apply in common management scenarios, such as anti-discrimination rules or the need for ‘procedural fairness’ in pre-termination discussions. However, it is quite a different thing to persuade an employee that you are acting appropriately and fairly when deciding to dismiss them. Many termination, bullying and stress claims we see are not about whether a manager acted lawfully or unlawfully, but about how the employee perceived their conduct.

Not all managers are blessed with natural charisma, but they can still plan and develop appropriate communication techniques to minimise legal claims and their impact. For example, many managers focus narrowly on trying to demonstrate why a particular process is fair and lawful, when in fact a more effective strategy may be to explain to an employee how the manager’s decision is better than the alternatives!

Productive intervention

Many of the so called ‘best practice’ procedures we see start from the assumption that performance management occurs in ‘exceptional’ situations, when a worker hasn’t performed well or has behaved badly. But this significantly undervalues the importance of routine, transparent communication about improving performance and productivity. Managers don’t just need the skills to discuss expectations when things go bad or relationships have broken down – to build and maintain a truly high performance culture, they also need the day-to-day skills to interact with staff in a way which consistently incentivises, develops and rewards achievements and productivity.

Mindful decision making

There is no right or wrong way to make a decision and, for some natural leaders, acting on ‘gut instinct’ can produce better judgments than working through a systematic assessment of detailed data. However, one of the key risks for people managers is not appreciating how, why or even when they are making important decisions. Legal claims often arise from decisions based on habit, assumption or emotional ‘fight or flight’ reactions. But learning a few key skills can help improve judgment, without slowing it down or making it less effective. For example, we work with managers to better understand risky decision making practices and to recognise the signs and triggers usually associated with poor outcomes.

Are you interested in applying the principles of practical risk management in your workplace? Would you like to talk to us about how to implement a training program? Please call us on (02) 9922 5188 or email us at

1 Fred Hassan, The Frontline Advantage Harvard Business Review May 2011 here.

2 See eg

3 See, eg:

4 Special thanks to Douglas Adams, Hitchhikers Guide to the Galaxy.

5 Fair Work Commission Annual Report 2013-2014.

6 FCB Group, Smarter solutions for the future (White Paper published October 2014).