Thought Leaders Series: Nick Southcombe, General Manager at Frontier Software

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Nick Southcombe 2

Nick Southcombe talks to us about HR software, innovation and how Frontier Software is rethinking marketing

Nick Southcombe is the general manager at Frontier Software – the company behind chris21 (Comprehensive Human Resources Integrated System). Frontier Software has been around for 33 years, continually developing leading edge software systems for payroll and HR. The company currently has 850 clients in Australia and its systems pay around 10% of the Australian workforce. Frontier Software’s largest client has a staggering 64,000 employees.

In this week’s Thought Leaders Series, Nick talks to Steve Pell about the world of payroll and HR software. They discuss how to sell to HR, the importance of demonstrating ROI and how Frontier Software has replaced local sales seminars with thought leadership webinars – with global reach.

The Interview:

Steve Pell: Nick, thanks for taking the time to speak with me today. Let’s kick off with your elevator pitch for Frontier Software – what you guys do and where the business has come from?

Nick Southcombe: Sure. Frontier Software was founded about 33 years ago by an Englishman living in Melbourne at the time – Michael Howard. Then in the mid-90s, he started building the organisation in Europe and more globally. Australia is still the most significant part of the business and most of the product development is managed and done here.

In tier one we compete with Oracle and SAP – where we believe our product is more feature rich, the application is faster and it’s more cost effective. Then in the tier two space, we consider ourselves to be market lead.

Steve Pell: Can you give me an example of who your clients are?

Nick: Yes, the South Australian government, ACT Government, PwC, Ernst and Young, Ramsay Healthcare… We also do the vast majority of Victorian Public Health. We’re spread reasonably well across all market verticals and horizontals. I think that’s a credit to the product and our services. It’s comprehensive enough to be able to deal with this and we continue to invest in it whenever there’s a new opportunity.

Steve: Let’s switch up a little bit and talk about you. How did you come to be General Manager?

Nick: I started life in accounting, which I found boring enough to move into systems and IT! Rather than do advanced degrees in finance, I moved over into information systems where I have worked in both CIO roles and for software vendors in senior management positions.

Steve: Do you enjoy the HR space?

Nick: Oh very much. I never worked in HR or payroll before. But it’s great working with an organisation that Michael has built over time, that’s got good legacy, good product and continues to invest in the future.

Steve: When you go out and talk to your clients, what do they love about the organisation?

Nick: The payroll people like it because so much in our system is automated – that’s not automated in other systems. Finance people like it because our reporting capabilities are really second to none, and because of our ability to easily integrate with other finance systems.

Stability is also important. There aren’t many organisations that could say they’ve been in the same business for 33 years with consistent ownership all the way through with year on year growth and it’s all we do: HR and payroll.

Steve:  Are there any major differences selling to an HR market versus where you’d been before?

Nick: Yes, certainly HR people tend to be different. In the past I’ve sold financial systems. Finance people understand systems while HR is not necessarily so system based. Now the question is, should it be? You can answer yes, a lot of it is systems-based but HR people aren’t brought up mostly, in my view, with systems design, systems implementation, business process improvement. They focus a lot on the people side. Which is important but not necessarily how you deliver ROI. That’s been a challenge.

Steve: Let’s jump into that a little bit because this is really interesting. Where you’re going from a product direction is, “We need to get systematic in HR.” But you’re not really able to sell that benefit direct to your end user?

Nick: It’s hard because when you put in a new finance system, it’s very easy to prove a return on investment, particularly when you’re dealing with the CFOs. “I’ll put in a new system. I’m going to save so many people, save so many costs. If I put a new time and attendance system, this is going to improve our accuracy and this cuts down things like time”. There is a bit of an ROI. How do you develop ROI for something like a performance management system? It’s very difficult to do.

I think this is something that software vendors and clients should work on together. Developing those metrics to help measure where the HR function is delivering ROI to organisations. It’s a big challenge for the HR community to demonstrate that.

Steve:  So you do a lot of work there?

Nick: Yes, certainly that’s something we continue to work on because we want to sell it, right? And it’s got to make sense to buy. But even using our systems internally, we try to measure this type of thing. If we can demonstrate that it works for us that helps us sell it. So developing those types of metrics is something we’re continuing to work on.

Steve: That’s really getting into the heart of thought leadership, right? Developing new metrics, building awareness…

Nick: Yes, what matters – and all the HR publications are filled with this – is the value that HR can add. HR can add all this value to things but what they’re not good at is measuring it. They need to get good at measuring it. On that basis for instance, we’ve developed a dashboard module which can show what the key metrics are and how people are performing against KPIs.

It ranges from what overtime costs were compared to what the budget was. To the time to recruit, number of vacancies available, staff turnover.

Steve:  What’s your view on the future of work? Do you think people will be as critical or even more critical tomorrow as they are today?

Nick: Yes, any organisation that’s really a service-based organisation, 80% of their cost is people related. That’s a significant cost, or an investment in people, whichever way you want to look at it. I think most organisations are flat out trying to get it right now in order to position for the future.

In my view, any manager who’s not working hard to get the best return out of the staff, isn’t properly doing their job. To be able to understand what attracts people to your organisation, what keeps people in your organisation, and how to develop those people is a key.

Steve:  Yes, as an aside, we did some work recently showing that there is no market in the world that is searching on Google for “cost cutting” with more frequency than Australia.

Nick:   Is that right?

Steve:  I think it nearly doubles the next market.

Nick: Yes, I mean every organisation wants to cut costs of course but managing your staff isn’t necessarily about cutting costs. You need to pay people fairly. Sometimes cutting costs on your staff can turn out to be a false economy because then you’re getting the cost of turnover involved and all the opportunity costs you miss along the way. This then goes back to the measurement point because frankly a bit of staff turnover in organisations is not a bad thing.

Steve:  Do you see technology as a threat to your business model?

Nick: Frontier Software has been well managed over its life and seen a lot of software payroll & HR vendors come and go. I think the barriers of entry into payroll are reasonably high – so it keeps competitors away. In countries like Australia, New Zealand and the UK there’s complexity in the labour laws and the tax. Indeed in the US, income tax can be taxed at three levels: federal, state and local government, things like that.

To build a comprehensive payroll system takes time, and the tolerances for quality have to be high because you can’t get your payroll wrong. If it’s right no one talks about it. If it’s wrong everyone knows about it.

What’s more of a challenge is that the barriers for entry for individual HR systems are much lower. Someone can come up with a good learning and development system for instance and that’s all they do. They can sell that, develop it relatively cheaply and sell it quite cheaply. They don’t have to worry about integration.

While we’re focusing a lot on our HR products nowadays, we have to be very cautious about any change we make so it doesn’t impact payroll critical functions.

Steve:  Let’s talk about now versus when you started out with the company. How is what you’re doing from a marketing perspective different from what you were doing say five years ago?

Nick: Certainly, when I started, a lot of the marketing was through seminars, “come along to a presentation seminar, let us show you product and talk about it”. What we see now is there’s very little interest in people coming along to those types of presentations.

A lot more of our marketing is EDMs, electronic marketing, and so on, a lot more of that. It’s still a requirement for us to attend trade shows and for a company like Frontier Software in Australia we’d be visible by our absence. That’s still quite a strong source of leads, and certainly reinforcement because it’s also an opportunity to touch and feel without being sold too heavily.

The other thing that I’ve noticed in recent times is the number of organisations putting out tenders is increasing. I think this is because of the sophistication and the complexity involved, so they can be very prescriptive about what their requirements are. Because of this we’re now focusing a lot more on outbound marketing.

Steve:  When you say outbound are you talking blogs and content, what else…?

Nick: Yes, Frontier Software isn’t bleeding edge in this type of area yet. We’re improving our website. We’ve got LinkedIn presence, Facebook presence and things like that. The electronic marketing is more about webinars to our prospects on thought leadership. Not so much talking about our system but more the things we’re talking about in this interview for instance – then just create some linkages in with what we’re doing from a product perspective.

Steve:  Ok, that makes sense.

Nick: There’s been great interest in those webinars. We did a number of those in the last 18 months and we’re just launching a program to commence those for this year. Our reach on those goes not just out in Australia. We have people from New Zealand, New Guinea, Pacific Islands logging. They’ve been very successful I think, and we support that with follow-up marketing and what not. But these things do take time.

Steve: Nick, that’s been fantastic, really interesting. Thank you for taking the time.

Nick: Thank you.

Thought Leaders Series: Peter Wilson, Chairman at AHRI

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Peter Wilson AHRI

Peter Wilson chats to us about Google, the need for competitiveness in HR and how AHRI has embraced social media

This week’s thought leader is a big name in HR. As National President and Chairman of the Australian Human Resources Institute, Peter Wilson is leading the way for over 20,000 Australian HR professionals. Although from Peter’s perspective, it’s these members that run the show.

Since Peter took the helm in 2006, AHRI has been owned by its members. Over this time engagement with the institute has skyrocketed – and AHRI is now making waves internationally as a HR thought leader.

Cementing Peter Wilson’s status as a thought leader is his inclusion in Peter Ulrich’s new book ‘The Rise of HR: Wisdom from 73 Thought Leaders’.

So what makes Peter tick? Who does he look up to? And where does he see the biggest challenges in HR coming from? We asked Peter all this and more – as he rushed across Melbourne from one meeting to the next.

The interview:

Elizabeth Jones: Thanks for making time to speak with me Peter – it sounds like you have a crazy schedule! Let’s start with what the Australian Human Resources Institute does. What’s your elevator pitch?

Peter Wilson: Well, you can divide what we do into three camps. First, we provide a range of professional services on parts of the trade like change management. Second, we’re a training organisation. We run about 200 courses a year varying from half-a-day courses to professional diplomas.

The third thing we do is run events – big and small. I just finished one at lunchtime today at Telstra. We had a group of senior practitioners listening to David Rock – the CEO of NeuroLeadership Institute, they’re doing some wonderful things there.

“We’re getting recognition internationally for our thinking in the profession

We also run the biggest HR convention in the southern hemisphere. This year it’s in Melbourne and we’ve got some of the world’s thought leaders in HR coming. Dave Ulrich, Ram Charan from Harvard – who’s quite contrarian in his viewpoint on HR – and Julia Gillard. We’re getting recognition internationally for our thinking in the profession.

Elizabeth Jones: How would you describe your role at AHRI?

Peter Wilson: I have two names in my title. I’m National President and Chairman. The National President side is effectively the national leader of the volunteer network – and I’m chairman of the AHRI board. Although AHRI is a not-for-profit enterprise it has large commercial revenues and expenses. I’m also a spokesperson, a writer and a media commentator – we get around 150 major media mentions a year.

Elizabeth Jones: A hugely diverse job. As a media commentator, what are some of the topics you’ve spoken about recently?

Peter Wilson: I was on ABC Drive Time talking about whether the police should wear long sleeves if they’ve got tattoos. And on Neil Mitchell’s 3AW radio show I spoke about relationships in the workplace and about sick leave and its utilisation – all sorts of quirky issues in the workplace.

Elizabeth Jones: Tell me about your writing.

Peter Wilson: I write a lot of opinion pieces for our magazine (Read some of Peter’s recent articles on HRM Online). This morning I was pleased to see that Dave Ulrich has published his new book – which I wrote a chapter for.

The second edition of my book ‘Make Mentoring Work’ comes out in a month too.

Elizabeth Jones: Let’s talk about the future of work. How do you think human resources has changed since you first started in the industry?

Peter Wilson: Very much like leadership itself. We were taught in business schools to be ‘command and control’ leaders up until 1990. And that HR is the regulatory bureaucrat and policeman. With this new globalised, digital world we’ve seen a different form of leadership emerge and HR has changed as a result.

Google has a nice approach to HR – they see it as having three parts. One part is the traditional skills: performance reward, change management, contracting, recruitment etc.

The second part sees HR execs as marketing and communication experts. Organisations deliver a message through the HR system – but they also rely on that system to collate viewpoints from the people and data on engagement. So a third of what HR does now in the best-performing organisations is continually refine the organisation’s brand.

The third part is MBAs. Many HR departments have to go out to the business units and provide business cases as to what they want to do. So they have MBAs in their midst developing the businesses cases and providing the pitch to get resources. That’s where HR is headed.

Elizabeth Jones: Is that a direction you’re excited about?

Peter Wilson: Yes, I’m genuinely excited by the practices at the cutting edge. The Atlassians, the Wespacs, the Telstras – very inspired, innovative companies have HR as part of their leadership. Those are the companies people want to work for. That’s very exciting. And that’s pulling the rest of the profession forward – but of course not everybody wants to go!

“Inspired, innovative companies have HR as part of their leadership”

Elizabeth Jones: What would you say the key challenges are for human resources at the moment?

Peter Wilson: The challenge for human resources essentially is to reshape the organisation into an employer of choice. That’s the fundamental challenge. If you do that, then you’ll see success with all the main aspects of lifecycle and employment.

There has to be a competitiveness in HR to speak the language of the business and to develop people solutions that are very much aligned to the business strategy. There’s a need for very smart HR right now – smart negotiators and creators of systems that develop people in line with the organisation’s values.

Elizabeth Jones: You’re a thought leader in human resources who’s known around the world. How do you achieve such recognition?

Peter Wilson: I’ve just tried to be around smart people, smarter people than me. There’s an e-book that was released today called ‘The Rise of HR: Wisdom from 73 Though Leaders’. I looked at the index and thought “There’s 72 thought leaders – and I’m the other guy!”

I don’t see myself as a thought leader but I certainly gravitate to them. I’m just inspired by creative insights, often contrarian insights, on the world of the workplace and the mindset of the modern worker. I’m just fascinated by that.

“I looked at the index and thought ‘There’s 72 thought leaders – and I’m the other guy!”

Elizabeth Jones: Can you give me some examples? Who are the thought leaders you learn from?

Peter Wilson: People like David Rock and Dave Ulrich, Fons Trompenaars and Wayne Cascio – people who are smarter than me in very particular ways. I’m someone that goes after people of leadership where I find them, and then reshape their material to be of value in my own community.

Elizabeth Jones: Apart from your events, how do you get the institute’s expertise out there? What channels do you use?

Peter Wilson: We’ve got our website which is being upgraded as we speak. We interviewed professionals about what they want from institutes, then restructured the website accordingly, that’s been huge.

We’re very, very active in social media. At the moment, when I write an article, it will go into our magazine – which is also available online. Then part of what I write will be cut into a blog and we’ll put it out through the various social media channels.

We’ve got HR management TV, so we’ve got regular TV updates to our members. We see our members once a year to ask them what they want.

We use every possible channel of communication we can to reach members.

Elizabeth Jones: Fantastic. Thank you so much for talking to me Peter.

John Whelan: HR Thought Leaders Series

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John Whelan

Meet John Whelan – qualified mediator, lawyer, government adviser and speechwriter

Conflict is one of those things we don’t often think about – until we’re busy resolving it. Perhaps a rebrand of the conflict resolution industry would help? That’s just one of the topics we discuss in this, our second instalment of the Thought Leaders Series.

This week I’m joined by John Whelan. John is the founder of JJ Whelan a successful mediation and conflict resolution company in Sydney. He formed JJ Whelan (which is a registered provider to the NSW Government) after a high-profile career in politics. Not such a big career change some may say!

John has been a Senior Adviser to two Prime Ministers and two Premiers. He’s also been Chief of Staff to the Commonwealth Attorney General and the Commonwealth Minister for Justice. No stranger to the media, John writes political opinion pieces for the Telegraph (here’s a great one for all you Game of Thrones fans) and is a regular guest on current affairs program, The Nation.

Putting John firmly in the HR thought leadership camp is the book he recently co-authored with Nina Harding and Simone Farrar. The Workplace Conflict Guide, currently available on iTunes, is a highly practical handbook for managers or employees experiencing conflict at work.

The interview

Elizabeth: Thanks for joining me John. To kick off, can you tell me a little about what JJ Whelan does? Give me your elevator pitch.

John: Sure. So JJ Whelan helps organisations resolve and prevent conflict in order to improve performance – that of individuals and the business as a whole.

We provide mediation to resolve existing disputes – and coaching to prevent conflict occurring. We also offer a program called High Performance Communication Training – a four-hour workshop that help teams author their own high-performance standards.

(For a list of specific disputes you might recognise, check out ‘Is this your dispute’ on John’s website)

Elizabeth: What kind of companies do you work with?

John: I have mainly worked with the public sector, so State Government bureaucracies and Commonwealth bureaucracies. I do have private sector clients too and some in the not-for-profit space.

Elizabeth: Which roles in those organisations do you normally work with?

John: The CEO is normally the first contact, especially if it’s a dispute that’s escalated. The actual training, coaching and mediations are conducted at a number of levels through the organisation though. Project managers often need conflict resolution for their teams for example. When you have fast-moving projects, even small disputes can have a big impact.

Elizabeth: What’s that ‘head in hands’ moment that makes people call you?

John: That’s a great term ‘head in hands’, that’s exactly what it is! I’d say it’s one of two things. One: as a dispute escalates and lawyers are about to get involved, the CEO (or whoever it is) looks over the edge and realises how much time and money is about to be spent. So they call me to get the dispute resolved. Two: there may be a break down of a relationship, which is affecting performance and stopping progress being made.

Elizabeth: A relationship between who?

John: It could be two leaders, it could be a manager and their team, it could even be between two different companies that are working on a project together. Or in a mediation between warring parties seeking a non litigated outcome.

Elizabeth: Can you tell me about a specific job you’ve done recently?

John: Yes – it was a group that was working across different branches in one organisation – four people participating in a project all with different needs and with poor communication. As a result the performance was suffering and the project faltering.

Elizabeth: Were they receptive to help?

John: Yes – but you have to remember that with any conflict, coming into the situation, there has already been a lot of investment into the dispute – emotional investment. So the intervention was necessary.

That’s a problem with humans. We’re highly competitive – so often pre-disposed for conflict. But most don’t like conflict and we’re not very good at dealing with it. That’s because of the emotions involved. We’re very complicated beings!

Elizabeth: What was the outcome for this group in particular?

John: I ran workshops that broke the conflict down into specific things that needed solving. The key was to get them authoring their own standards and methods of communications. For example, one standard stipulated that ‘Written communications need to be augmented with frank, factual, verbal communications.’ It is very simple but under pressure sometimes the breakthrough is hard for the participants to author. They are a good show and are on track.

Elizabeth: I bet they’d wish they’d called you a few months previously!

John: They always do!

Elizabeth: So what about prevention then?

John: I’m sometimes asked to come in and run coaching and training sessions on prevention – but really, people don’t tend to think about conflict until it happens. This is one of the things about the conflict resolution profession that needs to change. We need to get better at marketing the benefits of investing in prevention.

Elizabeth: Companies are increasingly publishing these ‘culture docs’ that outline the company’s standards. The standards you help groups create during coaching sessions could form part of these culture docs… what do you think?

John: Yes, the standards my groups write go on to be ‘norms’ that form the basis of how employees should behave – so that’s exactly what you’re talking about.

Culture is also about the language of a company, how people talk to each other, give feedback and respond to situations. And the standards tend to stick when they are authored by the team itself. The work being done by David Rock around this is particularly interesting.

Elizabeth: How has conflict resolution changed since you first started in the industry?

John: It hasn’t changed enough. I don’t think businesses are very clear on what conflict resolution is and what the impact of it is. If you can resolve or avoid conflict then performance increases. Not only that but people take fewer sick days and retention increases – of course all of this directly impacts your bottom line.

In your Thought Leaders interview with Gareth Bennett you spoke about the importance of data – I mean, which piece of data is more important than a company’s bottom line?

Elizabeth: What particularly excites you about the future of conflict resolution?

John: Neuroscience and neurolinguistics. There’s a lot we can learn from these disciplines. Like I mentioned before, the language of a company – how people express themselves and react to situations – can make a huge difference in your tendency towards or away from conflict as a company.

In one organisation I worked with recently the way most people would start a conversation was with their role – so their status. So instantly you have an atmosphere of competition, hierarchy and one-up-man-ship. Whereas if you put your needs first, you foster a feeling of collaboration. I’ll call this linguistic trade craft.

Elizabeth: As a thought leader, your thinking will contribute to the future of conflict resolution, so who have you been inspired by recently?

John: In terms of geo politics you have to admire Obama. You look at how conflict-prone the American political system is – and yet he’s taken America out of two wars , introduced a new healthcare system and brought them through a recession – that’s pretty impressive!

In terms of my industry: Nina Harding. Nina is Australia’s leading mind in mediation. She is high IQ – high EQ and has over 20 years of experience. I recently wrote a book with Nina that’s on iTunes: Workplace Conflict Guide. We’re planning to collaborate on some more publications in the near future.

I would also have to say that any business leaders who admit there’s a problem are inspiring. Recognising that there’s something wrong, speaking up about it and choosing to deal with it is a sign of strength, not of weakness. Those are the leaders that succeed. And they’re the ones with the most longevity.

Elizabeth: How do you currently get your expertise out there?

John: Face-to-face and word of mouth. Most of my business comes from referrals at the moment – and it’s enough to keep me busy! I don’t do social media or blogging but I can definitely see the potential there – it’s something I’ll be looking at this year for sure.

Elizabeth: Well, when you do, you know where to come! Thanks so much for chatting with me today John.