HR's role in organisational agility
No sector can afford to rest on its laurels when it comes to change. Here's HR's role in organisational agility
It’s 1995, and the Encarta team at Microsoft has good reason to feel pretty smug. Spotting the opportunity to provide an easy to use and searchable CD-rom encyclopaedia early on, the company has built a repository boasting 62,000 articles, pictures, illustrations, music clips, videos, timelines and maps – and sales of $800 million. The team had created a program so popular as to be the bane of school teachers setting research assignments everywhere.
And yet only 15 years later it was no more. Its usurper? A larger, richer competitor with more sophisticated technology? No: an organisation simply savvy enough to harness a growing appetite to create educational content among normal folk.
Despite having moved online by 2009, Encarta’s slow-moving content creation and verification processes just couldn’t compete. At this point Wikipedia boasted 2.7 million entries (five million today). Encarta still had Joseph Stalin’s birth date wrong.
It’s a cautionary tale about spotting new business opportunities first, but perhaps more crucially about how successful an entity can be where all contributors are passionate about taking ownership and responsibility for their contributions.
Wikipedia doesn’t have to wait for someone high up to confirm information has gone through the requisite verification processes (for better or for worse, depending on your view). It just does it. Wikipedia could be seen as the ultimate in organisational agility.
The agility agenda
And it is not the only entity to emerge triumphant in this way. Kodak and FujiFilm, Blockbuster and Netflix, black cabs and Uber… recent history is littered with similarly stark reminders of the need to keep up.
No surprise then that the term ‘organisational agility’ finds itself steadily rising up the business agenda. In an ever faster moving, more globalised, technology-driven and VUCA world, the need to move, and perhaps most importantly change direction, at speed is clear to see.
No sector can afford to rest on its laurels, confirms Geoff Tranfield, group HR director at engineering firm IMI: “If you look at what’s happening with disruptive technology, and the internet of things, and 3D printers you’re seeing technology inevitably changing all sectors… There’s very little in the world standing still.”
Barry Pirie, director of people and business services at Wiltshire Council and president of the Public Service People Managers’ Association (PPMA), confirms this to be the case within public sector organisations too: “Contrary to perceptions, I don’t think the public sector has ever had the luxury of standing still. However, what we are seeing now in the sector is a pace of change that is quicker than I have witnessed.
“The public sector finds itself in a unique position of having a burning platform – decreasing revenues and increasing demand for services – which means that doing anything other than moving quickly to deliver organisational change and reconfigure services will only store up greater problems for further down the line.”
And yet according to Corporate Research Forum (CRF) research director Gillian Pillans and her recent co-authored report Organisation Agility, this urgent need isn’t always translated into action. According to the report (co-authored by Chris Worley) only 17% of CRF member organisations meet the financial standard of agility. This chimes with US 2014 research, which found that 13% of businesses display a ‘chronic underperformer’ pattern here.
“If the question is how many organisations are aiming to be more agile, it’s a lot; agility has become fashionable,” reports Pillans. “But there’s only a very small minority achieving that.
“There’s a greater awareness now that you can’t just run business as usual, stop the clock, change everything and then move to a new business as usual,” she adds. “I think organisations are much more aware that change isn’t a one-off event; that it needs to be continual. But that doesn’t make it any easier in practice.”
In Pillans’ last comments lies an indication of the biggest factor standing in the way of many – namely, and perhaps conversely, their preponderance for one-off change, or ‘transformation’, projects.
Octavius Black, CEO of consultancy Mind Gym, describes the dangerous “false utopia” created by the implication that businesses are either in the process of change, or in a state of having reached exactly where they need to be. “There’s something about how we’re approaching change with a kind of programmatic approach,” he says. “It creates a forced relationship with change. It imagines there’s change versus business as usual, which frankly there isn’t. A child growing up for example: is that change or growth as usual? Which bit’s the change and which bit is the growth as usual? You tie yourself in knots.”
Perhaps another reason many have so far failed to embrace agility to the extent needed, is confusion around what this even means. The term ‘agile’ started life to describe a set of principles for software development in which requirements and solutions evolve through collaboration between self-organising, cross-functional teams – a much less holistic description than the CRF-cited definition of agility as “a dynamic capability that allows an organisation to make timely, effective, and sustained responses to environmental change”.
So what should organisations be aiming for? What are the key hallmarks of agility they should be striving to emulate, and what should HR – the custodian, typically, of the transformation project – be doing to support this?
There appears to be agreement on at least one of the most important contributing factors. In all conversations HR magazine conducted on the topic, three words cropped up again and again with particular emphasis: ‘culture’, ‘ownership’ and ‘autonomy’.
“For me the thing that really stood out was the concept of having a trust culture where employees are treated like adults,” confirms Pillans, when asked to identify the most important hallmark of agility. “To me that’s absolutely critical. It leads to other things. If you have that you’re more likely to have a strong sense of accountability, better communication, you’re more likely to be closer to the customer…”
Toby Peyton-Jones, UK and north west Europe HR director at Siemens, explains the danger of relying on a shiny new organisational structure in delivering true agility, instead of embedding a culture of trust and empowerment. “I don’t think people are looking at this holistically enough,” he says. “I don’t think people pay enough attention to the cultural as well as the organisational aspects of what needs to change, and the kind of mindset that needs to go along with a different way of doing things.
“It’s very easy to get fixated on the technology or processes, on management philosophies or changing certain organisational structures. This is the big thing we like to do. But a new structure won’t fundamentally change everything.”
What will ‘change everything’ – and has done for Siemens – is a culture of ownership. “That means: ‘what would you be doing now, if it was your own organisation, to do the right thing?’” explains Peyton-Jones. “How we operate needs to be a judgement that comes down to what’s the right thing to do in the situation. When you’re in front of a customer and they’re asking for something very reasonable, in the past we might have needed to say ‘I need to check this and that’ but we can be much quicker now.”
Also crucial, he adds, is a culture of collaboration and an external focus. “The permeability of the edge of your organisation is critical. We might have had huge R&D departments but now we can crowdsource ideas; put an engineering problem up and recognise that not all the capability we need to harness will be inside the organisation,” he says. “Contact with the community and economy isn’t window dressing any more.”
Tranfield reports a culture like this to be similarly vital at IMI. “We revamped our company values a few years ago and one of the key things we built in was collaboration,” he says. “We’re an organisation of 13,000 people. If you can draw on the knowledge of not just the colleagues around you but the touch points of 13,000 people, into different geographies for example, that makes you more agile. It’s having a deep interest in the world; what are the big trends out there? What is the competition up to (in a strictly ethical way)?”
Communication is king
‘Profit for purpose’ housing association Orbit Housing provides insight into the importance of a culture of agility in a very different context. “It’s creating a form of ownership within people. It’s really trying to get staff to take accountability and innovate, and give them the licence to do that,” reports Tony Williams, former executive director of people at the organisation and now a consultant working with the association.
He explains the importance of communicating this change in ethos the right way: “We didn’t use the word ‘agile’ as I think sometimes these kind of buzzy words can turn people off. What we were talking about was the fact that we need to be able to respond to change. We have 1,500 eyes and ears and voices and we need to make sure we use them all. The words used were: ‘light on our feet’ and ‘flexibility’.” Roadshows run by chief executive Paul Tennant have also been vital.
Senior-level visibility in the communications process has been similarly important at MasterCard, reports SVP of global HR David Walsh. He explains that CEO Ajaypal Singh Banga “wrote agile” when he took the helm in 2000, and speaks in these terms in all staff communication forums.
Important too has been recruiting people with the right mindset. “With the people we’re now bringing in there will be an inherent agility because the organisations we’re hiring from have had some kind of agile programme,” says Walsh. “The global perspective has got to always be there. We need people who think and act globally.”
Walsh adds that hiring people with diverse skillsets is also key. “Previously 70% of employees came from banking,” he explains. “We don’t look like that anymore… We have people who have worked in technology, people who have merchant experience…”
It might seem that achieving true organisational agility is simply a matter of recruiting the right self-starting, enterprising types, telling them they have free reign in determining how best to do their jobs, and simply letting them do it. But this is not quite the case.
IMI’s Tranfield points out the need for balance and not throwing the baby out with the bathwater when it comes to OD for agility. “You could take it to the other [extreme] and say to be agile we have no processes and we just do what works, but I would argue it’s more nuanced than that,” he says. “Having a clear organisational structure doesn’t do anyone any harm. I think, as long as you have the right culture and positivity around the organisation there’s little danger of limiting people by them saying ‘I won’t do anything outside the box.’”
For IT and software development outsourcing company HCL Technologies its culture of ‘ideapreneurship’ is very much about having a flatter structure, but structure nonetheless. “We recently did some benchmarking and found the number of layers between our business heads and employees facing the customer is one of the lowest in the industry,” says chief HR officer Prithvi Shergill, adding though that training for line managers to support employees in developing their ideas, and technologies that allow less experienced staff to access more experienced people, are crucial. There are clearly still layers, based on experience and capability, for a reason.
“We have various digital platforms around accessing knowledge from someone. Our expert database for example; you can write a question and an expert will respond with what you need to do in that particular situation,” explains Shergill, adding that this can be done on the go through a newly-developed app.
On the importance of training to equip people to embrace agility, Shergill says: “It’s vital to build skills on how to use autonomy so it’s for the benefit of the firm – so understanding what is doable or not and where to go for resources.”
Orbit’s Williams is similarly convinced of the need for robust training and development programmes to support agility. “You’ve got to have managers at every level of the business able to encourage people and act as enablers of change,” he says. “It’s about equipping your managers first, so we’re introducing a Future Leaders programme based on transformational leadership.”
Also important at Orbit has been training and development around ensuring employees are resilient enough to handle such a significant change in ethos, and the ongoing demands of agility. Hilary Scarlett, a neuroscience and change specialist working with the association on this, offers the following advice: “It’s important to get people into a reward state so they’re in a positive place. If they feel threatened and in uncertainty they’re not open to change.
“There are all sorts of things at play. One is about a need for central connection; so a good relationship at work and a manager who empathises. If we’re in the presence of an empathetic person we’ll thrive and stick at a task for longer.”
Structure for collaboration
Another key supporting activity is providing the structure through which employees can communicate and collaborate. For HCL technology is often the key. Frequent and inclusive employee gatherings (or ‘stand-ups’) are similarly vital for many organisations.
This has certainly been the case at the Driver and Vehicle Licensing Agency (DVLA), where bringing IT processes in-house and adopting an agile mindset more widely has enabled it to move with the times, allowing it to roll out online viewing of driver and vehicle records, for example. “It has to be a very inclusive approach, so things like daily stand-ups where anyone can turn up and find out exactly what’s happening are very important,” says head of HR Louise White.
“As an organisation, like many, we’ve had problems with silos and perhaps the IT side and operations side not working well enough together. This throws people into one pot and they have to get on with it. That’s been really good,” she adds.
But this approach hasn’t been without its practical challenges. “One has been the team concept, so constantly standing up and standing down teams and bringing new groups of people together and building relationships,” White explains. “We’ve issued some guidance about what you can do at the beginning to fast track that a bit. That’s around spending some time at the start doing team building and getting-to-know-each-other activities.”
So HR has a clear role to play. And not just in stripping back the autonomy-stifling bureaucracies of old. Instead it seems to be a case of arriving at just the right level of organisational structure, and the best training, digital, and communications activities to really support an agility ethos. But the all-important word here is still ‘balance’.
Software solutions provider Objectivity’s head of HR Paulina Roszczak-Sliwa says organisations must realise the importance of making sure all systems and processes are geared around agility, not just those that will most obviously support a culture of agility at the frontline.
“The most important thing is you cannot have agility in only one part of the organisation. It’s not possible to have agility only in the projects and products we deliver to our clients,” she says, explaining that an agile mindset must therefore extend to back office, supportive functions too.
An important element identified by the CRF report, and on a more anecdotal level by those HR magazine spoke to, was all supporting functions working to ‘agile timescales.’
Budget-setting is one area where more short-term timescales will often be needed, explains HCL’s Shergill. “More communication is required. Budgets and resources are agreed at the beginning of the year, but if you leave things like that [and don’t evolve], in today’s world that’s not viable,” he says. “You really need to remember that planning today is almost quarter-to-quarter rather than year-to-year.”
HR departments will similarly need to match the fast-moving nature of the businesses they now serve. “We talk about HR having the characteristics of flexibility and speed; but speed doesn’t necessarily mean doing everything really quickly,” explains Pillans. “It’s about the cycle time of the business and how HR needs to fit in with that. If you’re a fast-moving business maybe doing annual performance appraisals is not the way to go.”
Roszczak-Sliwa raises the example of engagement surveys: “The standard action is to check engagement once a year with a huge survey. But in an agile company where everything is changing very frequently, you can’t ask people to summarise the whole year to tell you how satisfied they were, it doesn’t work at all.”
An agile company also needs HR to be not only matching the timescales of its activities to the business, but planning much further ahead, adds Shergill. “HR can’t be sitting waiting for demand to be raised for talent, for example,” he says. “We have an analytics team that works on data we see in the sales pipeline. That enables us to say ‘this is what we’re seeing, these are the kinds of skills we’re seeing discussed with clients’ even before the contract is signed. And you start sourcing for talent before the demand is raised.”
Most important for all supporting, back office functions – most pertinently HR – is ensuring business processes aren’t slowing people down. “The truth is the world is becoming more and more complex,” says Tranfield. “The sheer amount of data is considerably greater than when most people started their educational journeys. It’s very hard for everyone to take all that in. You have to make sure the complexity they deal with in the workplace is reduced to a point where they’re helped to do that.”
“We find in a lot of organisations there are quite complicated processes and procedures in place,” says Pillans, adding that “those firms that keep things under review are more agile”.
Those more agile organisations are not “happy to settle on ‘we’ve got 60 HR processes and we’ve spent a lot of time developing them’,” she explains. “They’re prepared to take a step back and ask ‘is this delivering exactly what we need? Are there ways of improving efficiency, reducing the burden on the business, being more flexible?’”
No quick fix
Despite such helpful practical steps an awareness must always be maintained, however, that there is no silver bullet solution to becoming more agile. Otherwise the risk is the business falling back into the very mindset that dispensing with distinct change management projects was meant to escape.
“There are no quick fixes in the transformation to agility,” CRF’s Organisation Agility report states. “In every organisation we interviewed, even those that are highly agile, the story was the same: ‘There’s still so much we need to learn.’ Becoming agile requires patience and committed leadership. It is a journey that never ends.”
Objectivity’s Roszczak-Sliwa agrees that patience, and understanding of the short-term costs needed for long-term gain, are paramount. “Everyone wants to be agile but there are some costs,” she says. “For example, the cost of the time you spend in meetings… There are some things that are obviously time consuming, like retrospectives, lessons learned, daily stand-ups… You can’t take just the advantages from agility; you also need to accept the short-term costs.”
So while organisations are desperate to keep moving, the journey to acheiving true agility is not a quick one, and requires continual hard work and scrutiny. In creating the right conditions for agility HR needs to be on its toes. After all, if you stand still the only way to go is backwards.