EXTRA By Mike Sullivan >>
WATTSNEXT is a diversified and innovative human resources company on a rapid growth trajectory – and with a mission that lives up to its name.
“What’s next?” founder Sue-Ellen Watts is fond of asking – hence the branding of her company – and her answer, at the peak of her corporate career, was to act on an idea that had been brewing for many years. 
She had observed that small businesses in Australia had a lot going for them but often stumbled when it came to staff alignment and management.
After a long and successful career in corporate human resources (HR), Sue-Ellen Watts felt there should be a way of helping smaller, growth companies access the HR systems and toolsets that larger organisations utilised.
She decided the only way she could test her theory was to go out on her own, building an agile and flexible business around the very best of what she had learned and observed working for large organisations.
“We have a vision of disrupting the HR space. We think completely differently,” Ms Watts said. “We are not supporters of traditional HR and we have really gone out there and pushed that thought leadership, and people have connected to it.”
The problem was, she launched wattsnext in 2007 and, just as the business was gaining its footing, the Global Financial Crisis (GFC) struck. True to form, she kept her focus and turned a crisis into an advantage.
“See, my business was born as the GFC hit – I don’t know any different,” Ms Watts said. “It has been a really big advantage, as it turns out. It has been bumpy along the way but that naivety helps.
“I moved to Brisbane from Adelaide, where I left an internal HR role. I started the business when my first son was three months old. So the business has grown only in hard times and it has grown only when I have been having children.
“It creates resilience. Nothing can stop me. I have always been building.”
DISRUPT AND GROW
Comfortable times are an unknown quantity for wattsnext. Just as the business began to experience even growth in 2014, Ms Watts had the feeling it was time to focus on expansion.
“We decided we weren’t growing as fast as we probably could be,” Ms Watts said. “I am very comfortable with risk, so I knew that we absolutely had to go for it.
“We had a great brand, our service was great. There were not a lot of competitors in our market and we had a great offering. I felt we should be really pushing it a lot harder.”
Wattsnext completed the Queensland Leaders Executive Member program in 2011and then went on to step up into an Industry Expert role, mentoring other business leaders last year. Sue-Ellen Watts knew that when the Leaders program extended to Victoria and New South Wales, wattsnext had to go with it – even though it was going to be an organisational stretch.
“So we did a bit of an organisational restructure to accommodate our national expansion. We brought in some more senior people and we designed some new roles. When wattsnext started we were servicing micro businesses and now we find we are servicing larger fast-growth businesses, which need a higher level offering. We recognised we probably did not have the resources in our team to take it to the next level.
“So we focused on increasing our capability, which is always hard because it is a big outlay. It’s money up front … and we were talking (big dollar) jumps.”
There was one challenge Ms Watts knew would be hard to overcome as part of that growth: finding HR specialists who could consult.
“It is really hard in our market because many HR people are very often not suited to HR consulting. It is not an easy change,” Ms Watts said. “Most times we have grown and developed people through the business. They start as a junior and work their way through – and that has always worked really well for us.
“The national expansion and increased capability is working. We picked up $250,000 worth of new business in one month. That was brand new – clients that we have never had any work from before.
“In the past we have done so much farming of our current client base, but now it is just all new because we have ourselves out there,” Ms Watts said. “We have had a 30 percent increase year on year.
“I think making the internal changes, which aligned everybody, to show a commitment to our vision has helped. Showing the team that we were going to do whatever it takes to live up to our potential set the scene. But trying different marketing practices – like social media – has helped to create this amazing momentum that we are riding.”
WINNING SOCIAL MEDIA
A vital part of driving wattsnext’s growth has been a strategic and focused social media plan.
“We implemented a social media strategy which has been absolutely phenomenal,” Ms Watts said. “A lot of our clients and competitors still aren’t on social media, but we implemented this strategy and got the entire team involved. We got ahead of the game.
“For example, our website hits went from 60 hits a month to 5000 a month. We picked up a $100,000 client through Twitter. We picked up new staff through Twitter. I am getting media nearly every week. I’ve had three interviews today.”
Ms Watts sees social media playing a unique role in being pro-active in reaching potential clients, while staying in touch with certain key parts of the client base. It is all well thought out and a social media manager is employed internally. Now, after seeing the program in action and its impressive results, many wattsnext clients are learning how to adapt social media to their own businesses.
“We use different social media platforms for different purposes, for example Facebook for showing our internal culture,” Ms Watts said. “We will share what we do for someone’s birthday or a staff anniversary internally on Facebook, but business blogs and thought leadership through Twitter and Linkedin
“We focus on Twitter, Linkedin and our blogs … and we do video blogs as well, called Vlogs, which have been great content for our YouTube channel.
“We have 20 on the team and everyone sends out at least eight tweets a day – and that’s everybody from the receptionist to the managing director,” Ms Watts said.
“Plus there are Linkedin activities. We’ve got a Linkedin group – called Amazing Energy – which we all interact with other SMEs.”
Ms Watts said Amazing Energy is a platform for talking about people, leadership, HR and business which has worked extremely well and constantly attracts new SME leaders.
“We have increased our social media footprint from 10,000 to over 60,000 in 10 months,” Ms Watts said. “Social media is now an essential part of the business and the jewel in our marketing strategy.”
Every staff member who joins wattsnext is trained in the company’s social media systems, techniques and responsibilities.
“Social media is part of all role descriptions and is an essential part of our staff engagement and culture” Ms Watts said.
“We have two sessions a week where the whole business stops for half an hour – we call it Twitter time – and we put a big disco ball up and we put music on and everyone focuses on social media for half an hour.
“At our board meeting every month we sit down and we analyse all the social media statistics.
“We get asked to speak at conferences, because we are putting out so much fresh new content, positioning ourselves as thought leaders in the industry. We are writing 15 fresh new blogs a month and we are just sharing knowledge constantly – every day – everyone in the team is,” Ms Watts said.
The commitment to the Queensland, NSW and Victorian Leaders Industry Expert programs is an example of the ‘go-for-it’ ethos of wattsnext. Sue-Ellen Watts’ company acts like where it needs to be, not where it happens to be.
“One of the things that I think has been really successful – and has made our business really thrive – is that we have invested in things and done things before we have been ready,” Ms Watts said.
“I have done that from day one. A business our size would ordinarily never employ a permanent social media coordinator – because you think, oh no, we are not big enough, yet. When someone says something like that to me, that really says to me: do it.”
She attributes the company’s successful growth to that momentum, which she admits might seem risky to many.
“What people are talking about out there, which is still doom and gloom and (poor) market conditions, we have had the opposite,” Ms Watts said. “And I think it is because we are moving and we have made risky changes, but are very committed to the overall vision. Basically, we’ve just gone for it.”
GOING FOR IT
Wattsnext has that contrarian approach built in to its DNA. Its leadership team looks at the way others in their sector do things – and then they find a way to do things differently.
“Anything that anyone else would not do at this stage, I will do. Because that is what makes the difference,” Ms Watts said. “Yes, it’s risky and, yes, it’s an investment, but you have got to be prepared to do what others won’t. So when someone says to me, you are not ready for that, I think, great, I’d better do it!
“I have done that from day one. I have always acted like where I want to be, as opposed to where I am. I think that has had a massive impact,” she said.
“I have never focused on our competitors and I have never focused on market. Ever. If I can’t control that, why give any energy to it? I have just focused on what is my vision and what do I need to do now to achieve that. And the vision has always been to be a national business, while disrupting HR, whilst we inspire and develop our people. We never waiver from this business vision.
“We were not ready to do NSW Leaders and Vic Leaders. All three of them (including triggering up to the Queensland Leaders Industry Expert role) happened within a couple of months. It is a big investment when you have not planned for it. But I knew, straight away. There was not a doubt in my mind that we were going to do that.
“Every business decision I make is a line to our vision and every client decision I make is aligned to our mission, which is that we create great workplaces.”
CREATE GREAT WORKPLACES
Wattsnext concentrates on four streams to ‘create great workplaces’: Industrial relations/compliance, recruitment, HR Management/frameworks, and the overarching area of performance, which encompasses business culture, engagement and leadership.
Ms Watts said the industrial relations focus was on business owners legal requirements in regards to their people. In that area, wattsnext helps its clients reduce risk through policies, employee contracts and conducting independent investigations and training
Recruitment is where wattsnext gets innovative.
“We have our recruitment division: and that has been a very interesting story in itself,” Ms Watts said. “Since we started in recruitment, everything about how recruitment agencies run we have done the opposite.
“We do three or four things that are completely outside the square for a traditional recruitment agency. It has been interesting and has actually helped us grow, whereas all the other agencies are too scared to change. I am speaking at the RCSA (Recruitment and Consulting Services Association) conference at Hamilton Island in September (2-4) about how we have done things differently. Recruitment is about 25-30 percent of our business.
“Then we have our HR Management/frameworks – that is all the systems, processes, things like on-boarding, performance reviews, remuneration benchmarking, salary benchmarking and role descriptions and design.
“Then there is the exciting strategy work that ultimately drives performance. Culture, engagement, leadership and organisational structure work that transforms business performance.
“We basically cover anything to do with people in business,” Ms Watts said. “The majority of our clients are under 100 staff, although we are getting more clients in the 100-300 staff bracket where we work with their internal HR staff or team. The mix of how the wattsnext system is applied is as diverse as the client base.
“Clients are advised on what parts of the system will work best for them and wattsnext adapts its engagement to help these client companies align and grow. Most clients are small to medium, fast-growth businesses with growing pains.
“But then we have other clients where they might have a senior HR person and they need support from a different area.
“My view is that small businesses don’t need HR administrators, they need commercially focused HR strategists that ensure a return on their people investment.”
Ms Watts said small businesses need flexibility and a concentration on revenue growth to progress, so getting the HR equation at its most efficient is a key advantage.
Her view is that in small businesses, “HR as a responsibility should sit with the managers. We should be training and developing the managers on how to manage their people and not rely on internal HR to do it form them. I would like to see more businesses holding back from engaging internal facing HR administrators and utilising companies like us to help build their management and leadership capability. This is far more sustainable long term.
“Staff are often promoted to managers because they are technically good at whatever they do, but they are not necessarily very good at managing people and then they are rarely given training and development.”
She knows the territory, having experienced it personally.
“It’s the same with me, I am not a great manager” Ms Watts said. “The sooner I could get out of managing people and become the leader, and drive the vision, the better off everyone was.”
PRACTISE WHAT YOU PREACH
Ms Watts has long held the view that what works at wattsnext – a fast-growth business – will serve as an illustration for clients. The feeling of ‘ownership’ that wattsnext staff have is a good example.
“My focus always, from the beginning, has been on our internal culture,” she said. “I have always had this view that I need to build a business where my team treat the business like it is their own, because then I will be freed up to do what I am good at – which is grow it.
“It has all been about having a clear vision, mission and values, getting the team aligned, getting them excited about what we are trying to do and getting them to feel like they are part of something that could ultimately be really exciting. And it has been. The internal culture and my team are my biggest focus.”
A good example is how the growth of wattsnext’s Sydney clientele has allowed it to open the Sydney office this month, but also provided internal opportunity, Ms Watts said.
“We have given the opportunity to one of our team, Katie Hamilton, to go and start up our Sydney office. Which is just fantastic. I am really excited about that and it is a great opportunity for Katie who has been part of and an advocate of our internal culture.”
A similar plan to set up the wattsnext Victorian office was unable to proceed, so Ms Watts is now looking at options including buying a business in Melbourne. In an ironic way, this solution will propel wattsnext into another area earlier than expected, Ms Watts said.
She is often asked if she is planning an exit, by building up the business so quickly.
“Everyone asks that, are you building up to get bought? Are you building up your valuation?” she said.
“We are part of a number of entrepreneurial groups, and Queensland Leaders is one of them, that teach us how to build businesses up so that we can get bought – but I keep saying, when is someone going to come along and teach us how to be the ones that do the buying?” she laughed. “Why not build up big enough to do the buying?
“I am not looking for an exit right now, I am looking to build this so that I can have the experience of buying others and growing bigger and bigger – but hardly anyone seems to think about that.
“I am on this business journey to have as many interesting experiences as I possibly can and that could mean outside of Australia.”
That goal has been especially challenging for Sue-Ellen Watts, who happens to have combined launching a business, in possibly the worst financial environment in a generation, while simultaneously rearing three small children.
“The fact is, in my own business, I have never known any different,” she said. “This is situation normal.”
A common question she endures is how her three sons – ages 8, 6 and 2 – cope with her long work hours and irregular business travel.
“And I always ask, how many times do you ask a man that question? And they never do,” Ms Watts grinned. “Kids don’t care if their fathers are away, apparently, only the mothers.”
THE BUSINESS ENVIRONMENT
Some of the most challenging business conditions in a generation is how many business leaders, including Ms Watts, describe the current small business environment in Australia. The liquidations continue at a high rates and Ms Watts, typically, views the business climate as an opportunity for her company.
“People are over it. They are exhausted,” she said. “And a lot of them are saying, it’s not worth it.
“I totally understand that. It’s hard. For me, that’s where the mission, your purpose kicks in. When you are passionate about your mission it helps you to fight on. No matter what sort of technology comes in, or anything like that in our space … at the end of the day people want support.(Technology helps to a point) but people in business form the biggest challenges and they want help managing people.
“We have had clients where we have put in great processes, frameworks and systems for them and they still don’t want to manage people … they still don’t want to have that difficult conversation and still don’t want to lead, they want to sit at their desk,” Ms Watts said.
“It takes training and it takes coaching. They can’t just have a little reminder come up in their calendar. Getting the most out of your people is hard and it needs to be taught.”
THE RECRUITMENT DIFFERENCE
It is widely accepted that recruitment is an industry in decline, but don’t tell that to Sue-Ellen Watts, for she believes in the craft of recruitment and that it should be done like a quality internal HR manager does it. 
“Technology, like Linkedin, is often mentioned as going to kill the recruitment industry, but for us the craft of recruitment is so important at the end of the day,” Ms Watts said. “You can find people from Linkedin, but if you can’t sit in an interview and actually assess them properly, then it doesn’t really matter, does it?
“This is why we sit in in all our clients’ interviews, because generally it is not what they are skilled at doing.
“In recruitment, we cover all levels of role and all industries. When I was trained as a recruiter, I was trained in how to recruit as opposed to how to be a sales person. How to actually do that vital craft of recruitment. If you can do that, you can recruit anyone, is my view.
“Other expert recruiters who specialise in a particular area possibly would disagree with me, but the majority of recruiters out there are sales first, craft second – whereas we are craft, 100 percent. Our recruiters are not responsible for doing sales, I want all of their energy on sourcing and placing the best possible candidates for our clients.
“We say to (our recruiters), we’ll give you the jobs. We don’t want you worrying about that, because that just takes your focus away. What am I training you in? Training recruiters in how to sell is the model every other recruiting agency has and it’s just ridiculous.”
Wattsnext only works retained to recruit for companies and does not manage its own people placement database . Wattsnext also works only on a retained recruitment model, not on a contingent model which pays on placement, “because that is just transactional bums on seats and we believe in quality over quantity where there is a commitment from both parties”.
“We are HR experts and we don’t compromise on that for the purpose of billings,” Ms Watts said. “It is the same with our IR. Our IR division goes through stages where there are so many redundancies (to process) – and then recruitment will go up. But all the different streams and divisions are referring business to each other, so the industrial relations division might be dealing with a termination and then they will give a lead to recruitment as a result of that and then, because there was a termination, we ask what led to that?
“What led to that poor performance, for example? Then we will get the HR team in to be looking at your business. So it is all cross referring.”
The power of this wattsnext capability has proven itself time and again.
“One of our values is that we have the confidence to tell it as it is,” Ms Watts said.
“Say there is a bullying investigation,” Ms Watts said. “We will deal with the issue and then say, okay, now let’s go back and look at the issue that actually caused this.
“It is very rarely just the person that was involved at fault. Let’s look at it from a company point of view … the culture you have or what sort of recruitment you did or what sort of training you did that actually resulted in this, so that you don’t have this issue happen again.”
WATTSNEXT METHOD
“We pride ourselves on providing solutions that are commercial, creative and are always implemented,” Ms Watts said.
“Usually businesses are seeking an increase in performance and that comes from people having clear expectations, knowing what their job is, having a good culture, having well-trained managers,” she said. “There are a number of things. Nothing is siloed. Everything connects (and creates innovation).
“You just create a more collaborative workplace. And less stuff that is bogging people down from performing. We like to get rid of all that.
“HR people (generally) do that same thing – create all this stuff. We are all about getting rid of this stuff. You don’t need to be doing all this stuff. Let’s just focus on what is really going to get the results.
“We have this thing we say: Less Typing, More Talking. Let’s get on the phone to our clients as opposed to e-mailing them.”
Ms Watts said wattsnext used its own mission values as a guide for assisting other organisations.
“They are an important part of what we use every day. They are not words on a wall. When we get that clear, then we can implement their organisational structure and then we can get the people performing.
“The owners and the CEOs … you can see the weight coming off their shoulders. It suddenly becomes clear to them around where they want to go and what it means. That is my favourite bit. I just love it. I just love the different businesses we get to work with.
“I often refer to us as like a showroom for our clients. Because I absolutely live that. There are so many times when clients say to us, we just want to do it how you have done it. We have to say, your vision is very different to ours so we can’t implement the same HR strategy, but what we can do is work out what your things is and then we will create it for you.
“The best thing about it is the businesses we get to work with and the people, because they are doing amazing things. I feel very privileged to work with the businesses that we do and learn all about them and help them to get clarity on their visions. Get people aligned and engaged with them and positivity, and moving forward – and being confident to move forward,” she said.
“Clients come to us in a reactive way when they have staff issues, but what is also increasingly happening is that people are coming to us and saying, I want to create a great culture, I want to have everything in place and I want to offer a really good workplace, so what do we need to do?” Ms Watts said.
“And that is an ideal client for us because they are really committed to their people and creating a great workplace – and we can customise a creative and commercial HR Strategy to suit.
“When we start with an organisation we often start by looking at their organisational structure and we help them do their vision mission and values,” Ms Watts said. “That is really a great experience for the business owners, because it gives them clarity and direction.
“I am anti ‘words on a wall’. Our client’s vision, mission and values are all about creating clarity on where they are going, why they do what they do. Then the values are the guiding behaviours they need to get there … they become actual tools for the business owner and for the staff.”
The initial process is simple.
“We look at where the business wants to be and the vision for what they are trying to create. Then we look at where they are actually at. Often a HR analysis is conducted to audit any current frameworks, systems and capability and a report produced in the form of a HR strategy.
“Then ideally they would engage us on an ongoing basis, maybe 12 months to 18 months to implement and manage that HR strategic plan. It is priced as a retained monthly fee based on the results of the analysis, the complexity of the deliverables and the size of the business. Priorities can also be completed on an hourly or project basis if required.
“And we provide them with a timeline of deliverables that will be rolled out, when, and what is included as well: support, advice, as well as implementation.
“We become their HR partners and go to for all staff related advice.”
This innovative and creative approach is what sets wattsnext apart.
“We do not just put in place cookie cutter performance reviews and so forth, we really design the culture they are trying to create to reach their vision,” Ms Watts said.
“And the other thing is that we are really commercial – so we are all about business and getting a return. We don’t do things for the sake of doing them.
“That is a lot of the problem that HR falls into a lot of the time: the business does not see that they are getting a return on investment. Whereas our focus is very commercial.”
Most wattsnext appointments start at a basic level and then ramp up as results come through and confidence in the program builds.
Sue-Ellen Watts admits she is a highly driven business person, but her real skill is in steering alignment within organisations – especially her own – to achieve common goals.
“I have high expectations, absolutely,” she said. “We are a high performance culture. I am very driven. I am very ambitious for my vision. I am absolutely linked to that.
“But I am also in business to have fun and to enjoy the journey and to see what we can do.
“I am so curious to see what I can turn this into. Whenever I have had those days when I think I cannot do this anymore, I have this little voice in my head that says what if you … can do what Jamie’s done (Jamie Pherous, Corporate Travel Management founder and managing director, whose inspirational business story appeared in Acumen #79).
“What if you do it, being a woman, having all these children … absolutely why not?
“It has always been my own race. I am not concerned about competitors. If you want it badly enough you will make it happen and you will do whatever it takes to get there. If you don’t want it badly enough, you will make an excuse. I am pretty unforgiving in that area.
“One of our other values I have is no ego, no excuses. I can’t stand ego and I can’t stand excuses. Just be real,” Ms Watts said.
“You have got to do it for the love of it. If you are doing it because you want accolades or you want it because your ego is driving, it is so unauthentic. And I see that when I meet some people. You have got to do it because you love it and you are passionate about it and you want to give back.
“We know (the value of our work) from the fact that we have clients signing up for another year and another year and another … and they are different engagements as they change and develop. We never have anyone leave our recruitment division and use another recruiter. We have people coming back time and time again.”
Ms Watts feels is it vital for Australia’s future that business has access to this kind of development.
“We talk about that all the time at wattsnext in terms of creating great workplaces,” she said. “Someone comes home from work, and they have not been having a great workplace experience, they are more likely to yell at their kids and lie on the couch, be grumpy … whereas someone who leaves work after a day of great experiences is more likely to do things like coach the local footy team and things like that – add value to the community.
“I say to the team, you know, we could actually make the world better. We have access to all these businesses and if we can help make them great it will affect these individuals too, so that they go out and do great things. We can actually make the world a better place as a result of the work we do.
“I truly believe that, and I get goose bumps every time I talk about it. That is my driver, not only for my clients but for my business, for my team. For my family.
“For the ones that took a chance and took a lower salary or a risk to come and work in my business and I’m really humbled and grateful for that. I want them to have a better life for having taken that leap of faith in me,” Ms Watts said.
“Our Sydney office, that’s the same sort of level of pride for me at the moment (referring to Jamie Pherous having made 20 millionaires among staff through his company’s growth) – giving someone an opportunity to do something like that.
“Who knows where that might lead them in the future?” she said, thinking again of what’s next.
www.wattsnext.com.au
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