It looks like organisational agility is the new black. But how do we get there? There is already a rich source of literature on agile practices that we should consider . However, our research has suggested that HR is less certain on how to adjust their processes to facilitate it. The good news is: we have identified 5 building blocks you should focus on to enable an agile organisation.
Looking back to the 20th century industrial age, the success of manufacturing depended on repetitive, predictable and highly standardised work. For businesses to thrive in such a static environment, process optimisation and “efficient Taylorism” were the modes of choice. Therefore, talent practices were expected to be ruled-based and bureaucratic so that long-term goals could be reliably achieved. At that time, it was the smart thing to do.
However, managing organisations as machines became less effective over time. As technology evolved exponentially, competition became global and predictability started to decrease. In the current fast-paced, highly competitive business world, continuous innovation is now a strategic imperative. The new volatile, uncertain, complex and ambiguous (VUCA) conditions make it unrealistic to hope for “business as usual”. Chances are, whatever organisations did to get where they are today won’t keep them there tomorrow.
So, how can organisations prepare for a future that few of us can define?
To respond to change and uncertainty , software companies were amongst the first to set the example with an agile manifesto for managing projects. Through incremental iterations and cross-functional teams, a culture of continuous improvement and collaboration created and defined the baseline for high adaptability to change.
In the meanwhile, the term “agile” has evolved to become more holistic, and now represents how an entire organisation could operate.According to a report from Accenture: “Agility is a company’s ability to anticipate, sense and respond to volatility in its markets in ways that create competitive advantage”. This agile business approach has been widely accepted as something to strive for (a report from Mckinsey published this year suggests that 75% of companies believe organisational agility is a top priority, and nearly 40% are currently conducting an organisational agility transformation).
At TI People, we have targeted the topic of agility from an HR perspective. It is clear that the current long-term and role-focused talent management practices are not suited for this new approach, and yet, there’s an uncomfortable uncertainty about what to do instead.
How can HR enable agility?
According to the same report from Mckinsey, there are 5 trademarks of an agile organisation. These include practices such as: implementing flat structures; empowering multidisciplinary teams (which can be quickly assembled and dissolved around shared tasks); using design thinking, sprints or other similar methods to foster rapid decision making and learning cycles; investing in leadership that empowers people and creates an entrepreneurial culture; and offering real-time communication and work-management tools to support speed and flexibility.
Although these are core practices of every agile organisation, HR has struggled to adjust its processes to enable agility. Most literature and advice out there is too general and lacks clear guidelines for HR. Thus, we decided to explore the topic further. Our research has suggested that skills and work need to be transparent before networks of empowered teams can emerge. And it is through this transparency that an agile organization can be managed effectively. Therefore, to enable agility it’s fundamental that HR focuses on skill management.
According to our research, the common approach to segmenting the workforce is by level and function. However, to become agile it is essential that we segment by skills. Therefore, new approaches to workforce segmentation by skills are already emerging and it is predicted that they will become quite common by 2020 (figure below).
While we know HR needs to focus on building a skill-based organisation, two crucial questions remain: Where to start? And which technology to use?
1) Building Blocks of a Skill-Based Organisation:
Despite being a large and complex topic, our work with HR and non-HR professionals from the likes of Cisco, Solvay and Zalando, has allowed us to define an initial categorization system. In summary, we identified 5 building blocks.
1. Work Decomposition: Work and deliverables are subdivided into smaller and manageable components until the work and deliverables can be mapped to skills;
2. Skill Detection: Skills that are available in the organisation are made fully transparent
3. Future Skill Demand Prediction: Skills that are critically needed to fulfill the future company strategy are defined;
4. Work Skill Matching: Work will be mapped with available skills, career aspirations and preferences and supported by suitable technology;
5. Skill-based Talent Management: All talent management efforts are aligned with work / skill matching. As agile organisations won’t be able to rely on static job roles or organizational charts to determine processes relevant to each employee, such processes will need to be adjusted to the individual skills/projects. Examples include:
– Job Design: have less rigidly prescribed job tasks to facilitate a more fluid workforce with spontaneous problem solving and experimentation;
– Mobility: foster high mobility to enable everyone to pull the human resources necessary when needed;
– Performance appraisal: substitute annual performance appraisal by ongoing feedback. Development and evaluation discussions should be separated so that there is time for more focus on the employee’s growth. Further, since work will be organised by projects, leaders will lack complete awareness of employees work and will need to source feedback from multiple sources;
– Promotion and Rewards: provide instant rewards that reinforce desired behaviors when they occur. Promotions should also be clearly linked to results rather than tenure or seniority;
2) Technology for an Agile Workforce:
Due to recent advances in technology, several challenges around facilitating agile working can now be better addressed. Enterprise social networks, cloud-based collaboration portals and emerging software are making it easier to create highly dynamic team structures. Emerging software is providing ways to identify and describe employees’ skills and interests, to measure and collect employees’ accomplishments and to use gamification mechanisms to recognise accomplishments and earned skills. Moreover, team portals with social feeds support improved coordination and tracking. It’s clearly an exciting time for HR!
If you want to check some really nice real-life examples, you can read about the talent platform that HERE technologies developed, which provides visibility to skills and better matching of the right people to the right opportunities; or check how Swisscom implemented Startmind as “Ask the Brain” into their collaboration suite, allowing to get the right expert for any specific question.
Still skeptical about agility?
Research has shown that organisational agility can provide a powerful source of competitive advantage. Companies such as PMI identified several benefits of increased organisational agility:
In the new VUCA world, organisations will need to embrace agility in one way or another. Being able to rapidly respond to changes is essential. Those that fail to do so may be putting their organisation at risk. Likewise, HR will need to reinvent itself and adjust talent management practices if it is to support the agile organisation.
Even though its importance is clear, our research has found that HR professionals feel that there is no common jump-start solution to enable HR to adapt to the new agile environment. The most common questions that we received were “How do I start?” and “Which technologies should I use?”. With these struggles in mind, TI People is running a co-creation with companies such as Bertelsmann, HERE Technologies, Bayer, Bosch, Otto Group, Grundfos, E.ON, Cisco and others. Our aim is to develop a framework that will support organisations as they look to embrace agility, with a specific focus on skill management. If this is something that captures your attention, reach out to us to know more.