Agile transformations in organisations

In this way, the entire HR organisation and processes are often constructed around the managerial hierarchy. When the leadership hierarchy is disrupted during an agile transformation, it literally pulls the rug from under the HR function, and HR can effectively hinder the agile transformation if the department refuses or is unable to adapt.

The agile disruption and new talent definitions

When a company undergoes an agile transformation, the individual employee will typically no longer be assigned to just one manager. Instead, employees work in cross-functional and more or less self-managed teams. The classic employee-manager relationship is no longer so rigid and allows for new roles to come in and has a significant impact on the managerial functions in the teams.

Thus, the employee can have many roles, each covering some of the traditional managerial relationships.

Below is an example of agile roles adapted from the “Spotify model”:

• The Chapter Lead is responsible for the team’s professional development and setting the bar for professionalism. Talent development, onboarding and the general well-being of the employees are part of the role. The Chapter Lead will hold the overall responsibility for the employees in a given professional area.
  
  
• The Product Owner is the customers’ representative in the team and ensures that the customers’ needs are met, e.g. by prioritising the team’s deliverables.
  
  
• The Scrum Master coordinates the team’s deliverables and facilitates allocation of employees to each task. The Scrum Master is an expert in agile processes and ensures that the goal is successfully achieved.
  
  
• Finally, the Agile Coach assists the Scrum Master and facilitates the processes by aligning the team with the agile practices, values and mindset.

In addition to the above-mentioned agile roles, employees also collaborate with peers and teammates on the products on a day-to-day basis.

The talent definition also usually broadens within companies working agile. Previously, many companies focused on developing tomorrow’s leaders – typically generalists with solid business understanding and highly developed skills for leading and distributing. Some knowledge-intensive companies had a parallel specialist track to nurture the specialists of the future.

In an agile company, future success mainly depends on the power of innovation. Here, talent is recognised as the potential to become an innovator of the future – usually with a high degree of specialist knowledge combined with a profound understanding of consumers and their needs. Traditional personnel development, career and remuneration models based on a hierarchical organisation are thus entirely inadequate.

How should HR respond to the agile transformation?

New work structures call for new processes and a new HR organisation. We have spoken to several agile teams, managers and HR departments in agile organisations, and they all point to the same questions that they need to find new answers to:

• “Who is now in charge of hiring and firing people?”
• “Who heads up development and personal KPIs, and are they even relevant now?”
• “How do we meet employees’ personal development and career progression requirements in a flat organisation?”
• “How should HR regroup to support all these new needs, roles and relationships in our organisation?”

We have identified three areas where HR should respond to the agile transformation to achieve a structure that caters for all departments in the company:

1. The workflows in your organisation

In the agile organisation, there is no longer one leader with the power to make all decisions in all areas, and so you must define new decision models and decision-making forums encompassing all relevant roles and stakeholders in the organisation. It is essential to ensure that the right people make decisions on talent.

As far as HR goes, we have identified several ways of achieving this goal:

• Decisions on talents still rest with one person, but that person may vary depending on the area, e.g. the Chapter Lead may be overall responsible for personnel development while task management and daily management are in the hands of someone in the agile team. This pattern is usually evident in organisations that have taken the first tentative steps on their agile journey but are still very much bound by the traditional leadership relationship.
  
  
• An increased tendency is also to have talent decision-making forums, where decisions about hiring, pay and careers are handled by teams of colleagues who have a combined 360-degree perspective on an employee. In this scenario, employees are calibrated in relation to each other. You get a transparent talent development process and a fair assessment, which is beneficial to all employees. This type of approach is evident in organisations that are far along on their agile journey. For example, Google and Spotify are organisations that practise this very transparent approach and offer optimal conditions for increasing the talent pool in their teams.

2. The organisation of HR

You should also look at the way your HR department is structured. It no longer makes sense for HR to focus on supporting management and individual employees’ needs, respectively. On the contrary, HR can benefit from shifting its focus to the teams of employees and supporting the different areas of expertise instead of the departments, thus gaining an in-depth knowledge of the teams. Going forward, recruitment, salary and career counselling may be carried out by a professionally oriented HR employee who knows the different talent markets, the competition out there and the dominant motivators in the different talent segments. Such a professionally oriented HR function supports the increased focus on professionalism and innovation and allows the company to retain its highly skilled employees long term.

You need to develop an HR organisation that can continue to provide strategic sparring at the top level, provide managerial and personnel nurturing of the various teams and tribes and continue to help the individual employee with their specific employment needs.

Agile Coaches are involved in this process in some HR departments. Their role is to facilitate agile workflows in the teams, including sparring on personnel management, motivation, high-performing teams etc. It is a natural extension of HR’s traditional domain in leadership development.

3. The HR work method

You also need to adjust your work method. It is not conducive to an agile work structure to have a “centre of expertise” that develops your organisation’s policies and processes based on an analysis-design-build-implement-model, allowing only for a small and very late involvement of the rest of the HR organisation and other key stakeholders. Rather, HR should implement more agile workflows with high user involvement from the start, continuously tweaking and adjusting as the organisation evolves and changes.

It varies greatly how each HR department approaches this issue. In some companies, HR continues to develop and adjust staff issues in the department itself – although in an agile flow with increased business involvement.

Other companies take a more drastic approach and set up HR partners in a kind of Scrum Master role where they facilitate a team working on a particular personnel-related topic such as employee engagement. Such a team then goes on to involve experts in e.g. motivation and engagement, experts in incentive programmes as well as customers or clients, IT experts and anyone else who may be relevant to include in the cross-departmental team on employee engagement. Thus, HR can operate in its field and come up with solutions tailored to suit the challenges in business conditions and still rely on its employees’ unique knowledge and expertise in psychology.

The future HR organisation

Going forward, and regardless of which model you choose, your HR department’s solutions should not be designed to fit long-term projects but should instead be introduced through development processes that develop MVPs (minimum viable products) that can be tested in smaller groups. When solutions are finally launched, you can still make several adjustments, improvements and new releases along the way. This is the only way your HR department can support your business and remain up to date and abreast of a constantly evolving marketplace.

These are all just examples of how you can organise the management structure and workflows in HR to be more adapted to the agile process. If management asks you to take a helicopter view and a strategic perspective, then one thing is for certain: the old ways are not agile and no longer represent a solution. Rather, HR should embrace a transparent organisation and way of working that is consistent with what the workflow required from the employees, allowing the department to support the agile management structure to the best of its ability.