Are Agile Organization Models the Future?

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As more organizations free themselves from the corporate hierarchy, we take a look at the benefits of an agile organization model

Norberts Erts, CakeHR

The agile organization model offers a different methodology for managing people and operations from what we are used to seeing.

With well-known industry names such as Apple, Philips, and ING Bank operating successfully using agile techniques, other businesses are looking to adopt the agile approach, which means moving away from a managerial hierarchy (where decisions are made from the top down) and no longer adhering to strictly structured processes.

With huge changes affecting both internal and external areas of an organization, being agile requires you to thrive on change and become stronger as a result, giving your business a competitive advantage.

 

What does the agile organization model look like?

Organization structure: This will shift from hierarchy management structures to networks and teams that work closer to the customer base, having more control over decision-making.

Teams and projects: From fixed teams that work together regularly to networks, or “squads”, that are assembled quickly based on skill sets and dismantled quickly once projects are complete.

Job roles: Employees usually working under a job description will move to working on projects that make use of their skills, enabling staff to work on multiple projects across different areas within the business, offering diverse opportunities.

Management: Managers will no longer focus on just overseeing people and “own” their development but will lead projects and sponsor the right employees to support project requirements.

Rewards and promotions: Rather than rewarding employees based on their job level, continuous service, or experience, rewards will be based on outcomes of tasks, reputation, and sponsorship by colleagues or leaders.

Culture: Arguably the most important element in ensuring the agile organization is a success, the company’s agile culture will have influence over every area and all functions within the business.

Of failed Agile implementations, 63 percent of respondents in one study blamed the clash between their business’s culture and Agile’s business philosophy.”

Rachel Burger, Capterra

 

What are the benefits of an agile organization?

The agile organization is quick to respond to changes within the market through fast decision cycles, efficiently dealing with new threats from internal and external factors and keeping on top of the fast advancements in technology, enabling operations to thrive in a turbulent environment of constant change.

If we look at ING Bank as an example, going agile has provided the following benefits to their organization within a 15-month period:

  • Improved time to market
  • Boosted employee engagement
  • Reduced impediments and handovers
  • Improved client experience
  • Increased productivity

 

Some tips for success

Successful agile models are said to consistently exhibit these five trademarks:

  1. Shared purpose and vision to help people feel personally and emotionally invested.
  2. A network of empowered teams (cross-functional teams, self-managing teams, and flow-to-the-work pools) that are given clear responsibility to figure out their own solutions and deliver “exceptional results”.
  3. Rapid decision and learning cycles to embrace uncertainty in evolving environments.
  4. A dynamic people model that ignites passion, promoting a company culture that puts its people at the center, engaging the workforce and creating value.
  5. Next-generation enabling technology seamlessly integrated into every aspect of the organization, supporting speed and flexibility with rapid reactions to the stakeholder and business needs.

“Agile projects are 28 percent more successful than traditional projects.”

PWC

 

Ability needs stability

Although agility promotes open communication and more flexible methods, being agile should not be confused with being unstable. Alongside being able to adapt and show resilience, for an agile organization model to be a success, companies must design structures, governance arrangements, and processes with a relatively unchanging set of core elements — a fixed backbone,according to an article from McKinsey & Company.

 

Technology

In order to support an agile organization, your tech needs to support the needs of improved productivity and flexibility across the business by operating in the following ways:

  • Team-based performance management
  • Goal and objective sharing
  • Team/network feedback
  • Assigning, managing, and overseeing projects
  • Instant-messaging service
  • The option to create and dismantle teams for collaborations with ease
  • Transferable data

 

What impact does agility have on HR?

HR is a crucial supporting function. Improving marketing, continuous development, responsiveness to change, and collaborations can be a wasted effort if there is a lack of agility in HR to back it up.

HR’s role is not to just simply execute and roll-out agile controls and standards, but rather facilitate and improve agility across an organization by being responsive to change, staffing, and planning. This will impact the way jobs are designed, recruitment is conducted, objectives and performance are managed, and how people develop within the business and the culture of the company.

“How ready are you to attract, manage, and grow people in a network, rather than a hierarchy? Are your career models, performance management practices, leadership models, and reward systems ready? Quite possibly not, but 2018 is the time to start rethinking them.”

— Josh Bersin, Bersin by Deloitte

HR regularly works on an annual or quarterly cycle that would need to be changed to a more frequent schedule, such as bi-weekly, to optimize processes and look at results at the end of a cycle.

The main objectives will be to look at ways to attract, retain, and grow employees in a flexible network rather than hierarchy and promote an agile culture across the board.

 

In summary

Any organization can become agile, but they need to be clear about why they want to make the move to agile in the first place, so the foundations can be established. Once that is answered, organizations can then move on to figuring out the how and when.

By redesigning your organization’s structure to be more focused on teams and networks that are responsive and utilize skills across functions, whilst creating new roles such as Leader, Sponsor, and Advisor, will ultimately have a positive impact on the transformation of your business.

From what we can see, the agile design is becoming the future go-to business operational model, with 71 percent of organizations already said to be using some form of agile approach. Therefore, if you are looking to keep ahead of your competition, now is the time to start developing and implementing these agile practices.

Do you own or work within an agile organization? We would love to hear your views on the positives and negatives of agile operations.

 


Norberts Erts is the co-founder of HR software CakeHR, which streamlines attendance and performance management for customers worldwide. Email Norberts at norberts@cake.hr, follow him on LinkedIn and Twitter, and visit blog.cake.hr to follow up on the latest in HR management.

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