I’ve been speaking a lot this year at various conferences (Big Apple Scrum Day, Music City Agile, and Agile 2017 to name a few) about the need to engage our Human Resources and Finance teams in agile transformations. Creating a sustainable agile transformation is difficult if we don’t change how we manage our people systems or our funding models. In this post, I want to give a brief overview of the presentation I’ve been giving and why it’s important. This is part one of a two part series. In this post, we’re talking about Human Resources.
Creating a Sustainable Agile Transformation
Agile transformation traditionally starts with the IT teams. It’s normally either pushed down from management or is a grassroots effort from the development teams. While this works in most cases it’s limited in scope. This means that the transformation tends to stall in IT. There are several reasons for this, but one main one is that our people systems are working at cross-purposes with our goals.
What Makes This Hard for HR?
I began exploring this topic when I was doing enterprise transformations. Every company I worked at experienced some issues as related to HR and finance and after some digging, I learned why. According to an article from Accenture,
According to an article from Accenture,
HR systems have generally been designed to reduce variability and to standardize behavior, with an eye toward mitigating risk and delivering low-cost, easy-to-manage administrative services.
The problem with this approach is that agile often requires that we increase variability and provide for customized people systems and policies. We want to be flexible and allow for experimentation with our people.
Another part is the annual performance review process. The focus is on extrinsic rewards and doesn’t tend to inspire or engage our employees. Our reviews tend to drive our bonus and salary conversations based on year-long goals. And the process can conflict with our “team” priorities by emphasizing individual accomplishments.
Finally, HR has been focusing on creating job families with standard career paths and descriptions. Scrum provides new roles that aren’t well-understood by HR teams. We need to find ways to either expand or simply do away with those.
What Can HR Do?
The biggest things that our HR departments can do to help our agile transformation succeed is to change their model to support the variability we need. But what does that look like?
New Thinking in HR
Several thought leaders have started publishing guidance on the ways HR can embrace 21st-century business methodologies. Jacob Morgan published an article in the Harvard Business Review entitled “The Future of Work” (chart on the right). This article lays out some of the changes that we want to engender in a modern workplace, not just an agile one. There are many, many changes (as you can see) that will help us move that direction.
Many other recent works make the same arguments for changing our people and reward systems. Dan Pink’s Drive is a must-read on that. Lean Startup by Eric Ries is another relatively recent work that describes some of those changes as well. And there are some good examples in the industry. Adobe released a video describing how they’ve replaced annual performance reviews with a wholly different – and more popular – system.
Changes to Management Thinking
We need to engage HR in helping our management team understand the changes required for a successful agile adoption. In particular, if a team is getting their work assigned from a Product Owner (or “customer team”), managers oftentimes find themselves challenged to figure out what their job is. Jurgen Appelo’s Management 3.0 (M3.0) is probably the leading management transformation framework. While it’s not prescriptive, the ideas Jurgen presents help managers understand how their jobs are changing. At its core, M3.0 says that “management is too important to leave to managers” but teaches that managers are responsible for managing the business systems and ecosystem. It’s not exactly revolutionary thinking, but Jurgen has done a great job of distilling disparate ideas into an easy-to-understand presentation.
HR and Finance are important partners in our an agile transformation. They are often where our culture gets formalized as process and policy. If we want to change our culture we need to engage them early and often. But we need to make sure that we’re clear about our need – and desire – to partner with them. We’re not asking them to change on a whim – there is a purpose. The best question to ask is: “How can I help you help us?”
Look for Part 2 – Engaging Finance – later this week!
Feliz entrenamiento, mis amigos! (Happy coaching, my friends!)