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Agility in HR

May 5, 2021

By Sheila Hoover, courtesy of SBAM Approved Partner ASE

Agile: The ability to move quickly and easily; relating to or denoting a method of project management that is characterized by the division of tasks into short phases of work and frequent reassessment and adaptation of plans.  Agility has been working its way into areas and functions from product development to manufacturing to marketing—and now it’s transforming how organizations hire, develop, and manage their people.

You could say HR is going “agile lite,” applying the general principles without adopting all the tools and protocols.  It’s a move away from a rules and planning-based approach toward a simpler and faster model driven by feedback from participants. This new paradigm has really taken off in the area of performance management. (In a 2017 Deloitte survey, 79% of global executives rated agile performance management as a high organizational priority.) But other HR processes are starting to change too.

In many companies it’s happening gradually, almost organically, where more than 90% of organizations already use agile practices. One result is that companies now think about performance management in terms of teams, not just individuals. In some companies, the move to agile HR has been faster and more deliberate.  Instead of leadership being seen as a paragon of management through control systems, it switched to a lean approach that cuts back on top-down financial controls and empowers teams to manage projects as needs evolve.

The changes in HR have been a long time coming. Years ago, when manufacturing dominated the industrial landscape, planning was at the heart of human resources. Companies recruited lifers, gave them rotational assignments to support their development, groomed them years in advance to take on bigger and bigger roles, and tied their raises directly to each incremental move up the ladder. Organizations wanted their talent practices to be rules-based and internally consistent so that they could reliably meet five-year (and sometimes 15-year) plans. That made sense. Every other aspect of companies, from core businesses to administrative functions, took the long view in their goal setting, budgeting, and operations. HR reflected and supported what they were doing.

By the 1990s, as business became less predictable and companies needed to acquire new skills fast, that traditional approach began to bend. Hiring from the outside, to get more flexibility and a variety of skills, replaced a good deal of the internal development and promotions. “Broadband” compensation gave managers greater latitude to reward people for growth and achievement within roles. However, the old model persisted. Like other functions, HR was still built around the long term. Workforce and succession planning carried on, even though changes in the economy and in the business often rendered those plans irrelevant. Annual appraisals continued, despite almost universal dissatisfaction with them.

Now we’re seeing a more sweeping transformation. Rapid innovation has become a strategic imperative for most companies. Businesses have looked to Silicon Valley and to software companies in particular, emulating their agile practices for managing projects. So top-down planning models are giving way to nimbler, user-driven methods that are better suited for adapting in the near term, such as rapid prototyping, iterative feedback, team-based decisions, and task-centered sprints.

With the business justification for the old HR systems gone and the agile playbook available, people management is finally getting its long-awaited overhaul too.  Because HR touches every aspect, and every employee, of an organization, its agile transformation may be even more extensive and difficult than the changes in other departments. Companies are redesigning their talent practices in the following areas:

PERFORMANCE APPRAISALS

When businesses adopted agile methods in their core operations, they discontinued the practice of trying to plan a year or more in advance how projects would go and when they would end. So, in many cases the first traditional HR practice to go was the annual performance review, along with employee goals that “cascaded” down from business and unit objectives each year. As individuals worked on shorter-term projects of various lengths, often run by different leaders and organized around teams, the notion that performance feedback would come once a year, from one boss, made little sense. They needed more of it, more often, from more people.

Many organizations have switched to frequent performance assessments, often conducted project by project. Overall, the focus is on delivering more immediate feedback throughout the year so that teams can become nimbler, “course-correct” mistakes, improve performance, and learn through iteration—all key agile principles.

COACHING

The companies that most effectively adopt agile talent practices invest in sharpening managers’ coaching skills. Managers and supervisors go through “coach” training designed for busy managers. It can be broken into weekly short videos. The supervisors can also engage in learning sessions, which, like “learning sprints” in agile project management, are brief and spread out to allow individuals to reflect and test-drive new skills on the job. Peer-to-peer feedback is incorporated in manager training too. Colleagues form learning cohorts to share ideas and tactics. This creates the kinds of conversations companies want supervisors to have with their direct reports, but they feel freer to share mistakes with one another, without the fear of “evaluation” hanging over their heads.

Companies have also invested heavily in training supervisors on topics such as how to establish employees’ priorities and goals, how to provide feedback about contributions, and how to align employees’ career aspirations with business needs and learning and development plans. The bet is that building employees’ capabilities and relationships with supervisors will increase engagement and therefore help the company innovate and move faster. Many companies are already reporting improvements in these areas, at all levels of management.

TEAMS

Traditional HR focused on individuals—their goals, their performance, their needs. But now that so many companies are organizing their work project by project, their management and talent systems are becoming more team focused. Groups are creating, executing, and revising their goals and tasks with scrums—at the team level, in the moment, to adapt quickly to new information as it comes in. (“Scrum” may be the best-known term in the agile lexicon. It comes from rugby, where players pack tightly together to restart play.) They are also taking it upon themselves to track their own progress, identify obstacles, assess their leadership, and generate insights about how to improve performance.

In that context, organizations must learn to contend with:

Multidirectional feedback – Peer feedback is essential to course corrections and employee development in an agile environment, because team members know better than anyone else what each person is contributing. It’s rarely a formal process, and comments are generally directed to the employee, not the supervisor. That keeps input constructive and prevents the undermining of colleagues that sometimes occurs in hypercompetitive workplaces.  Some executives believe that peer feedback should have an impact on performance evaluations. Because an agile environment makes it practically impossible to “monitor” performance in the old sense, managers solicit input from others to help them identify and address issues early on. Unless it’s sensitive, that input is shared in the team’s daily stand-up meetings and captured in an app. Employees may choose whether to include managers and others in their comments to peers. The risk of cutthroat behavior is mitigated by the fact that peer comments to the supervisor also go to the team. Anyone trying to undercut colleagues will be exposed.

In agile organizations, “upward” feedback from employees to team leaders and supervisors is highly valued too. Employees may be initially hesitant to provide upward feedback, even though it is anonymous and is used for development purposes only, because they weren’t accustomed to voicing their thoughts about what management was doing.

Frontline decision rights – Thefundamental shift toward teams has also affected decision rights. Organizations are pushing them down to the front lines, equipping and empowering employees to operate more independently. But that’s a huge behavioral change, and people need support to pull it off. Senior leaders need to be ready to give up control, and the people under them need to get used to taking it. A successful approach is to integrate agile coaches in business teams.

Complex team dynamics – Finally,since the supervisor’s role has moved away from just managing individuals and toward the much more complicated task of promoting productive, healthy team dynamics, people often need help with that, too. It’s charged with identifying the company’s best-performing teams, analyzing how they operate, and helping other teams learn how to become more like them.

COMPENSATION

Pay is changing as well. A simple adaptation to agile work is to use spot bonuses to recognize contributions when they happen rather than rely solely on end-of-year salary increases. Research and practice have shown that compensation works best as a motivator when it comes as soon as possible after the desired behavior. Instant rewards reinforce instant feedback in a powerful way. Annual merit-based raises are less effective, because too much time goes by.

RECRUITING

With the improvements in the economy since the Great Recession, recruiting and hiring have become more urgent—and more agile. For example, a cross-functional team works together on all hiring requisitions. A “head count manager” represents the interests of internal stakeholders who want their positions filled quickly and appropriately. Hiring managers rotate on and off the team, depending on whether they’re currently hiring, and a scrum master oversees the process.

The recruiting team focuses on vacancies that have cleared all the hurdles, no requisitions get started if debate is still ongoing about the desired attributes of candidates. Openings are ranked, and the team concentrates on the top-priority hires until they are completed. It works on several hires at once so that members can share information about candidates who may fit better in other roles. The team keeps track of its cycle time for filling positions and monitors all open requisitions on a Kanban board (an agile project management tool designed to help visualize work, limit work-in-progress, and maximize effenciency).

LEARNING AND DEVELOPMENT

Like hiring, L&D had to change to bring new skills into organizations more quickly. Most companies already have a suite of online learning modules that employees can access on demand. Although helpful for those who have clearly defined needs, this is a bit like giving a student the key to a library and telling her to figure out what she must know and then learn it. Newer approaches use data analysis to identify the skills required for particular jobs and for advancement and then suggest to individual employees what kinds of training and future jobs make sense for them, given their experience and interests.

Traditionally, L&D has included succession planning—the epitome of top-down, long-range thinking, whereby individuals are picked years in advance to take on the most crucial leadership roles, usually in the hope that they will develop certain capabilities on schedule. The world often fails to cooperate with those plans, though. Companies routinely find that by the time senior leadership positions open up, their needs have changed. The most common solution is to ignore the plan and start a search from scratch. But organizations often continue doing long-term succession planning anyway.

ONGOING CHALLENGES

To be sure, not every organization or group is in hot pursuit of rapid innovation. Some jobs must remain largely rules based. (Consider the work that accountants, nuclear control-room operators, and surgeons do.) In such cases agile talent practices may not make sense.

And even when they’re appropriate, they may meet resistance—especially within HR. A lot of processes have to change for an organization to move away from a planning-based, “waterfall” model (which is linear rather than flexible and adaptive), and some of them are hardwired into information systems, job titles, and so forth. People issues remain a sticking point. Many HR tasks, such as traditional approaches to recruitment, onboarding, and program coordination, will become obsolete, as will expertise in those areas.

Meanwhile, new tasks are being created. Helping supervisors replace judging with coaching is a big challenge not just in terms of skills but also because it undercuts their status and formal authority. Shifting the focus of management from individuals to teams may be even more difficult, because team dynamics can be a black box to those who are still struggling to understand how to coach individuals. The big question is whether companies can help managers take all this on and see the value in it.

The HR function will also require reskilling. It will need more expertise in IT support—especially given all the performance data generated by the new apps—and deeper knowledge about teams and hands-on supervision. HR has not had to change in recent decades nearly as much as the line operations it supports. But now the pressure is on, and it’s coming from the operating level, which makes it much harder to cling to old talent.

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