The agile methodology enables organisations to master continuous change. It is particularly relevant for environments where customer preferences and solution options change frequently. It began as an iterative approach to delivery that builds software incrementally from the start of the project. In short, it is about listing, estimating, prioritising, executing, updating and constantly analysing and testing. If reality disagrees with their plans, agile-trained managers find it easier to change their plans because of the nature of the methodology. Unsurprisingly, on agile teams roles blur and scopes vary. The idea is that it's a lot like working on a (successful) mini start-up.
Human capital academics Peter Capelli and Anna Tavis of HBR argue that HR departments, in those favourable environments, are applying some of agile’s general principles.
In what way is this happening?
- Performance appraisals
As individuals work on shorter-term projects, often run by different leaders, the notion that performance feedback would come once a year, from one boss, makes less sense. This calls for more feedback, more often, from more people. Many organisations (Pfizer, PwC, Deloitte) have switched to project-by-project performance assessments. Overall, the focus is on delivering more-immediate feedback so that teams can become nimbler, “course-correct” mistakes (or “fail fast”), improve performance and learn through iteration—all key agile principles.
Coaching is central to both the agile methodology and talent management. Managers are being trained to coach better and more efficiently (for example, at P&G and at Cigna, US health services provider). It results in the kinds of conversations that might surface in appraisal type meetings but people feel freer to share mistakes with one another, without the fear of “annual evaluation” hanging over their heads.
Traditional HR focused on individuals but now that so many companies are organising their work project-by-project, their management and talent systems are becoming more team focused.
In that context, organisations must learn to contend with:
- Frontline decision rights: Organisations are pushing down decision rights to the front lines, empowering employees to operate more independently. But that’s a huge behavioural change, and people need support to pull it off. The HBR authors point to a Bank of Montreal example where agile teams designed some new customer services; however, senior leaders weren’t quite ready to give up the decision-making and the people under them were not used to taking it. So, the bank embedded agile coaches and they put everyone, including high-level executives, through after-action reviews held after each iteration (wave of work or sprint). Because the retrospectives quickly identified concrete successes, failures, and root causes, senior leaders at BMO immediately recognised their value, which helped them loosen their grip on decision making.
- Complex team dynamics. Agile shifts the focus away from individuals and towards teams. HBR points to Cisco’s special Team Intelligence unit which is charged with identifying the company’s best-performing teams, analysing how they operate and helping other teams learn how to become more like them. We can report that Emerson in Europe has a similar approach (not necessarily with a team intelligence unit), with some UK teams regularly sought out as experts on the back of team success as opposed to individualistic self-promotion.
Research has shown that compensation works best as a motivator when it comes as soon as possible after the desired behaviour (see Daniel Pink’s bestseller Drive). Instant rewards reinforce instant feedback in a powerful way. Annual merit-based raises are less effective because too much time goes by. HBR points to outdoor fashion retailer Patagonia which eliminated annual raises for its knowledge workers. Instead, adjusting wages more frequently based on market rates. Another tech firm Digital Ocean makes salary adjustments twice a year and closed gaps in pay for equivalent work so to deliberately head-off internal rivalries.
To scale up quickly in 2015, GE’s new digital division pioneered a cross-functional team to work 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.
To keep things moving 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. It works on several hires at once so that members can share information about candidates who may fit better in other roles.
Companies are also relying more heavily on technology to find and track candidates who are well suited to an agile work environment. GE, IBM, and Cisco are all looking at assessment techniques to identify who might be better suited to an agile environment.
Primary source: https://hbr.org/2018/03/the-new-rules-of-talent-management (accessed 20/03/2018)
Other sources: http://www.agilenutshell.com/ (accessed 20/03/2018)
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.