If you don’t change these two, real organizational agility will be elusive – Part 1

Agile is a mindset, defined by values, and guided by principles, that are manifested through practices. It is not a methodology or a set of processes.

Yet the focus is often on the methods (e.g. Scrum) rather than on values side of it that help to inculcate the right mindset. And if it’s a mindset, then clearly it is about people.

Agile teams don’t work like other teams; they are expected:

  • To be self-directing and self-managing
  • To hold retrospectives to continuously get better at what they do
  • To help each other, and those in other teams
  • To be committed to the same goals and ensure that they deliver zero-defect work
  • To identify impediments or bottlenecks and get them removed so the team can keep moving forward.

Yet, they are expected to do all of that while the rest of organization around them does not change. For example, the rewards systems and job descriptions can still be the ones that existed before they started trying to be Agile.

Realistic? Nope.

Steven Dennning in Making The Entire Organization Agile said that “[t]o delight its customers, the firm must embrace a new ecosystem, built on Agile principles and applying radical management across every aspect of an organization.”

There are two specific groups within organizations that I think top the list of places that need to change how they do what they do in order to start creating this new ecosystem – HR and Finance.

In the first of this two-part blog post I’ll take a look at the implications of Agile on HR and how they need to change their fundamental understandings of why they exist within organizations in order for them to support true organizational agility. In the second post I’ll look at the Finance group.

In my view, if you don’t change these two areas of your organization first, real organizational agility will remain elusive as will be the ecosystem to which Denning refers.

While it’s true that Agile is making some in-roads beyond software development, it is often in groups with whom IT is doing Agile projects as opposed to it being planned as part of creating a new Agile ecosystem.

Agile challenges our belief and value systems

To become a truly Agile organization, we need to challenge our beliefs and value systems in a number of ways:

Traditional Agile Challenge Change needed
Job descriptions and titles are designed around hierarchical and command and control mental models Focus needs to be more on disciplines and roles and self-management and self-direction As we can’t control change, we need to learn how to manage at the pace of change. Steadfast job descriptions and job titles are impediments to that view.
Traditional organizations tend to prescribe what we do and how we do it Need to be open to adapting aspects of multiple methods over blindly adopting individual methods (emergent discovery) Give more control to teams to determine how they want to work to achieve agreed goals
Hire people based on their content expertise Need to be open to constant learning so hiring people who have “learned how to learn” is becoming more important. Shift to valuing innovative thinking over just content expertise

HR’s role in enabling the Agile Ecosystem

In most organizations HR is seen mostly as an extension of the legal department – their role is as much to ensure that a firing can happen without legal challenge as it is about hiring the right people. In the public sector (and some larger corporations) this has translated into a focus on being able to survive an audit of their hiring and firing practices rather than on hiring people who will fit both into and be part of creating a new culture of an Agile ecosystem.

Here are some changes that HR groups can make to enable the Agile ecosystem in an organization:

  • Refocus hiring on helping to attract and retain the right people – and away from being an extension of the legal department
  • Stop focusing on job descriptions – instead focus on the disciplines and their competencies that a modern workforce must possess
  • Treat people as people – not resources or assets. Resources are facilities and equipment and money – i.e. things we use. We don’t use people.
  • Recognize the changing demographics of the workforce – the new workforce doesn’t have the same motivators. This new generation of workers tend to hate hierarchies and will often seek out less hierarchical organizations – sometimes for less money or for less perceived upward mobility. Traditional hierarchies are the complete antithesis of what motivates them.
  • Focus hiring on leading indicators rather than on lagging indicators. Content expertise is a lagging indicator – it’s what you know today based on what you did yesterday. Look for those who have “learned how to learn” – which is a leading indicator as it tells you they can adapt at the pace of change
  • Recognize the shift that values collective intelligence over individual intelligence – Rod Collins in his seminal book on Wiki Management says that “the smartest organizations are now the ones that know how to aggregate and leverage their collective intelligence by designing organizations not as top-down hierarchies but as powerful collaborative networks”.
  • Change the performance and compensation systems – As the shift to valuing collective intelligence over individual intelligence and the manifesting of collaborative networks takes shape, performance and compensation systems will also need to be replaced by ones that support the new motivators and drivers of the modern workforce – and surprise, it isn’t just monetary. They want a sense of belonging, of being valued, of feeling like they are making a difference. A recent survey found that “83% of employees said recognition for contributions is more fulfilling than any rewards and gifts” and “71% said the most meaningful recognition they have received had no dollar value.”

Conclusion

Organizational agility cannot be achieved simply by giving individual teams the ability to be self-directed and self-managed. It requires changes throughout the organization.

In a recent blog post Collins suggested that “if CEOs are serious about improving their companies’ capacity for innovation and collaboration, they need to transform their organizations from top-down hierarchies to peer-to peer-networks”.

In my humble opinion, HR groups need to be at the forefront of that thinking, and to have it reflected in their practices if they are to appropriately support the rest of the organization in creating its Agile ecosystem.

What do you think? Can HR organizations make the transition? Do they have a choice?

Next week I’ll tackle Finance

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