Business Essentials: A victim of its own success seeks the personnel touch

As legal firm STL grows, it needs a more structured approach to managing its staff, says Kate Hilpern

In 2002, STL Group was a small family business with 20 employees working out of an open-plan office. "It was easy for us all to help each other out and we were ticking along nicely," recalls chief executive Alan Thorogood.

In 2002, STL Group was a small family business with 20 employees working out of an open-plan office. "It was easy for us all to help each other out and we were ticking along nicely," recalls chief executive Alan Thorogood.

But suddenly things changed. Work started pouring in and the legal services firm has gone through a period of rapid growth. "We're up to 58 staff at the moment and we really need some guidance on how best to manage the culture changes as the company gets bigger," he says. "I want to ensure that we continue to have a motivated, fulfilled workforce who can provide a premium service to our customers."

He gives two examples of the new challenge he faces. "People are now asking me at job interviews, 'What's the career path at STL?' That was something I never thought about before - progression just seemed to happen when someone was doing well.

"Meanwhile, employees who were here already have found themselves unable to call on people they had previously because we are now split across several offices. When everyone was in one big office, you could correct someone at a moment's notice, but that's no longer possible."

Although STL was formed in 1974, the company only really took off at the start of the new millennium, says Mr Thorogood, after a change in legislation. "Part of our service is providing property searches, and environmental reports fall into the category of these searches. In 2000, the Law Society recommended these reports for every single property transaction, and because we were developing cheap, easy-to-read reports, we went from selling none of them to 400 a day."

Another service provided by STL is personal local authority searches. These are carried out by visiting a council in person and gaining access to data from public records, rather than writing to the authority. The services have become popular due to their lower cost and faster turnaround compared with standard council searches.

In addition, the firm provides costs drafting and company searches. But property, says Mr Thorogood, now forms 70 per cent of all its business.

The IT system was first to feel the strain of the growing volume of business, he says. "But we've sorted that out now. Communication with clients also took its toll, so we have decided to set up a call centre to deal with this effectively."

Sales and marketing is another business function that he has decided to develop. After employing the services of a local PR company, STL has a new website being launched next year and a new employee coming on board who will focus on innovative sales methods. "My sister, who has many years' experience of account management at Abbey National, has joined us to oversee this area."

But people management, says Mr Thorogood, is an area where he still needs advice. "We have applied to become Investors in People [the national standard for good practice in training and development]. But we want to know what else we should do. Things like creating systems around management and motivating staff happened organically before. But when you're growing, you need structures in place."

www.stlgroup.co.uk

WHAT THE EXPERTS SAY

Ben Fletcher, professor of personal and organisational development, University of Hertfordshire

"STL has a management problem and not a 'culture' or 'people' one. The business has developed by serendipity and not design - fortunate but not sustainable. It must tackle the haphazard structures that were allowed before.

"It needs to develop strategies and objective systems in many areas. IT may be sorted out now, but client communication could resurface again as an issue. Family appointments may be 'known', but they also distort sense and need.

"People management can help, but it cannot replace objectivity and process, which seem largely absent. The company is vulnerable to the random management processes it is not controlling.

"Good culture is the consequence of good management and not of good intent. Culture evolves gradually or as a result of catastrophe. There is a catastrophe waiting to happen here."

Angela Baron, organisation and resourcing adviser, Chartered Institute of Personnel and Development

"STL has a classic change dilemma. There is a point, usually when the headcount reaches 50-plus, when small companies need human resources systems to manage effectively. The trick is to adopt systems that keep all the positives about being a small business and amalgamate them with the opportunities of being an expanding business.

"STL is a family firm with family members being put into key roles. It needs to hold on to that cohesion but not to the extent that new recruits feel family will be favoured.

"It also needs to adopt communication and knowledge-management systems that enhance the free flow of information and create social networks, fostering a sense of co-operation.

"It is very hard to manage all the factors contributing to corporate culture, but if STL can identify the core values that have shaped what is good about the firm, that is where it should concentrate its efforts."

Julia Woodford, consultant, The Work Foundation

"In common with heads of many successful organisations, Mr Thorogood has seen his role change from 'running' a small family business to 'leading' a larger company - requiring a more strategic approach.

"While updating the IT system is a positive step, he seems to have missed the vital need to have a clear vision for the organisation based on market intelligence, and the requirement to bring his staff with him - through robust communication and consultation.

"Often, employees hold many of the answers, and their involvement is critical. Cross-functional working groups can help generate a feeling of mutual support, together with practical solutions for culture change, while improving communications. But don't discard good practice.

"STL is still relatively small, and at this stage, Mr Thorogood may wish to maintain the informal 'feel' by implementing lighter structures for workforce planning, career progression and knowledge management, rather than rigid systems."