What is an agile organisation and what does it mean for Talent Acquisition?
Posted by Ian Monk & Nick Shaw on 16 December, 2020
Business agility is a hot topic, a McKinsey survey of 2,500 business leaders showed that 75 percent of companies see organisational agility as a top-three priority, and nearly 40 percent are currently implementing a transformation programme related to agility. In this article we will define what an agile organisation is and how this shift is both impacting and benefiting Talent Acquisition.
We’ve been speaking to CHRO and Heads of Talent at some of the world’s leading global organisations about the agile organisation to understand what this means to them and Talent Acquisition. Whilst almost everyone agrees that this is an important shift in how organisations operate, what struck us is that there are a number of perspectives on what it means and encapsulates.
As a first step, it captures flexible working which includes, among other things, flexible hours, hot desking and home working, all which may more succinctly be phrased as “anytime, any place, anywhere”. Flexible working initiatives were initially seen as employee benefits but progressive organisations have realised that both employee and employer benefit from this flexibility. However, the true agile organisation includes far more than flexible working.
To understand agile, one can first look at its origins in software development in the early 2000s. The preceding decade had seen sustained failures with traditional waterfall project methodology (top-down planning, homogeneous projects, long delivery plans). Techbeacon explains how the agile movement started with Scrums in 1995 but its turning point came in 2001 with the publication of the Agile Manifesto. Over the following decade, the best tech organisations learned that success was delivered through agile teams - small, multi-disciplinary teams with a clearly defined purpose and close customer alignment. These agile teams were empowered to make decisions and iteratively produce outcomes through rapid delivery cycles where they continuously measured and learned what worked, and what didn’t.
Perhaps one of the most compelling elements of this approach is the focus on management through outcomes, with teams given full end-to-end accountability and leadership giving direction on desired outcomes, leaving the team empowered to decide how to deliver them. The Agile Org puts this succinctly when they note that in an agile organisation the team is empowered by being allowed to work within guidelines (of the task) but without boundaries (of how you achieve it). HBR says these teams must be responsible for specific outcomes and be trusted to work autonomously but be guided by clear decision rights.
Fast forward 20 years and organisations large and small are embracing agile principles, not just in software development but right across their organisation and projects. For example, in a Bain survey of 1,300 global executives, the statement that had the most consensus (95 percent agreed) was: “Today’s business leaders must trust and empower people, not command and control them.”
An agile organisation at its simplest level is one in which a significant proportion of its capability is delivered through agile teams. Going back to where we started, a key pillar of an agile organisation may initially be empowering people to decide when and where they can add value using ‘flexible working’, as was the case with BT. But it encapsulates far more - how organisations define their management structures, teams, business goals, delivery cycles and use of technology. McKinsey describes an agile organisation as:
We’ve been speaking to CHRO and Heads of Talent at some of the world’s leading global organisations about the agile organisation to understand what this means to them and Talent Acquisition. Whilst almost everyone agrees that this is an important shift in how organisations operate, what struck us is that there are a number of perspectives on what it means and encapsulates.
As a first step, it captures flexible working which includes, among other things, flexible hours, hot desking and home working, all which may more succinctly be phrased as “anytime, any place, anywhere”. Flexible working initiatives were initially seen as employee benefits but progressive organisations have realised that both employee and employer benefit from this flexibility. However, the true agile organisation includes far more than flexible working.
To understand agile, one can first look at its origins in software development in the early 2000s. The preceding decade had seen sustained failures with traditional waterfall project methodology (top-down planning, homogeneous projects, long delivery plans). Techbeacon explains how the agile movement started with Scrums in 1995 but its turning point came in 2001 with the publication of the Agile Manifesto. Over the following decade, the best tech organisations learned that success was delivered through agile teams - small, multi-disciplinary teams with a clearly defined purpose and close customer alignment. These agile teams were empowered to make decisions and iteratively produce outcomes through rapid delivery cycles where they continuously measured and learned what worked, and what didn’t.
Perhaps one of the most compelling elements of this approach is the focus on management through outcomes, with teams given full end-to-end accountability and leadership giving direction on desired outcomes, leaving the team empowered to decide how to deliver them. The Agile Org puts this succinctly when they note that in an agile organisation the team is empowered by being allowed to work within guidelines (of the task) but without boundaries (of how you achieve it). HBR says these teams must be responsible for specific outcomes and be trusted to work autonomously but be guided by clear decision rights.
Fast forward 20 years and organisations large and small are embracing agile principles, not just in software development but right across their organisation and projects. For example, in a Bain survey of 1,300 global executives, the statement that had the most consensus (95 percent agreed) was: “Today’s business leaders must trust and empower people, not command and control them.”
An agile organisation at its simplest level is one in which a significant proportion of its capability is delivered through agile teams. Going back to where we started, a key pillar of an agile organisation may initially be empowering people to decide when and where they can add value using ‘flexible working’, as was the case with BT. But it encapsulates far more - how organisations define their management structures, teams, business goals, delivery cycles and use of technology. McKinsey describes an agile organisation as:
“a network of teams within a people-centered culture that operates in rapid learning and fast decision cycles which are enabled by technology, and that is guided by a powerful common purpose to co-create value for all stakeholders.” McKinsey
Given how well agile organisations outperform their peers, it is not surprising that the agile movement is gaining momentum. McKinsey has shown that agile organisations have a 70 percent chance of being in the top quartile of organisational health, considered one of the leading indicators of long-term performance. These agile organisations achieve greater customer alignment, faster time to market, higher revenue growth, lower costs, and a more engaged workforce.
What does an agile organisation look like?
The obvious visual and structural change is the disassembly of large homogeneous departments into compact teams. Large enterprises are likely to have significant numbers of these teams, SAP was an early adopter of agile and now has over 2,000 teams. Saab has over 100 agile teams working on the Gripen fighter jet project. As in SAP’s case, this change can come about through gradual iterations or in ING’s case, a more dramatic change management project. ING is often held out as a case study of the success gained from fully embracing agile. It introduced agile teams by requiring nearly 3,500 employees to reapply for redesigned positions on those teams. About 40% of the people filling the positions had to learn new jobs, and all had to profoundly change their mindset.
McKinsey’s chart may suggest almost the whole organisation will move to agile teams, but in practice most companies will maintain a balance between agile and traditional organisational structures. Corporate support functions are typically structured in the traditional way. However, in an agile organisation, these functions will have a different mindset and their priorities more closely aligned to strategic initiatives. For example, when Riot Games introduced agile it redefined how its corporate functions serviced its agile teams. This varied from some members of these functions being embedded in agile teams to a portion of a function’s capacity being dedicated to high velocity requests from agile teams. But make no mistake, the march of agile is on and it has developed into interesting use cases in corporate functions such as HR and Talent Acquisition. For instance, GE’s new digital division created a cross-functional agile team to work together on all hiring requisitions.
Scaling an agile organisation needs structures to support the agile teams. Spotify is one of the most successful examples of an agile organisation and has helped to define common terminology around the structures required for success. If one is following the Spotify tribe terminology, your agile team would be called Squads which are further organised into Tribes, Chapters, Guilds, Trios and Alliances.
McKinsey identified five trademarks that define an Agile Organisation and highlights many of the best practices that can be seen in those that are most successful.
Scaling an agile organisation needs structures to support the agile teams. Spotify is one of the most successful examples of an agile organisation and has helped to define common terminology around the structures required for success. If one is following the Spotify tribe terminology, your agile team would be called Squads which are further organised into Tribes, Chapters, Guilds, Trios and Alliances.
McKinsey identified five trademarks that define an Agile Organisation and highlights many of the best practices that can be seen in those that are most successful.
Why is agile gaining momentum?
The agile movement has been undoubtedly on the march since the early 2000s but there are now a number of trends accelerating us towards the agile organisation:
The demand for innovation
Rapid innovation has become a strategic imperative for most companies, not just a subset. Top-down planning models are giving way to nimbler, customer-driven methods of agile. As Bank of Montreal’s chief transformation officer, Lynn Roger, puts it, “Speed is the new business currency.”
Rapid innovation has become a strategic imperative for most companies, not just a subset. Top-down planning models are giving way to nimbler, customer-driven methods of agile. As Bank of Montreal’s chief transformation officer, Lynn Roger, puts it, “Speed is the new business currency.”
Pace of introduction of disruptive technology
Established businesses and industries are being commoditised or replaced through technology innovation and new business models. This has been accelerated more so in recent years with the automation, AI and No Code revolutions.
Established businesses and industries are being commoditised or replaced through technology innovation and new business models. This has been accelerated more so in recent years with the automation, AI and No Code revolutions.
The war for talent
As roles change and automation is introduced, the focus on talent has shifted towards the ‘creative’ or 'learning’ worker. These workers flourish and feel more rewarded in agile teams where they are empowered to iterate quickly, make decisions and own the outcome.
As roles change and automation is introduced, the focus on talent has shifted towards the ‘creative’ or 'learning’ worker. These workers flourish and feel more rewarded in agile teams where they are empowered to iterate quickly, make decisions and own the outcome.
The rise of remote working
Even before Covid the world was moving towards remote working, removing geography as a barrier to hiring. With this comes a shift to focusing on outcomes rather than inputs. Employee empowerment and measuring outcomes align neatly with agile principles.
Even before Covid the world was moving towards remote working, removing geography as a barrier to hiring. With this comes a shift to focusing on outcomes rather than inputs. Employee empowerment and measuring outcomes align neatly with agile principles.
How will the shift to agile impact Talent Acquisition?
The continued rise of agile will have a significant impact on Talent Acquisition both in terms of its internal client’s needs, but also how the function will benefit from embracing agile principles.
Let’s first look at this from the perspective of how Talent Acquisition will be impacted as its internal customers move towards agile teams.
Let’s first look at this from the perspective of how Talent Acquisition will be impacted as its internal customers move towards agile teams.
1. More frequent and more urgent hiring
Rapid iterations and fast reactions to opportunities will mean that teams will be powered up and powered down rapidly in order to respond to strategic initiatives. These multidisciplinary teams will need to be built and deployed far more frequently and faster than ever before, increasing both volume and time demands on talent teams. With resource constraints already impacting Talent Acquisition, even more emphasis will be required to focus on standardised, efficient and semi-automated processes that deliver the right candidates.
Rapid iterations and fast reactions to opportunities will mean that teams will be powered up and powered down rapidly in order to respond to strategic initiatives. These multidisciplinary teams will need to be built and deployed far more frequently and faster than ever before, increasing both volume and time demands on talent teams. With resource constraints already impacting Talent Acquisition, even more emphasis will be required to focus on standardised, efficient and semi-automated processes that deliver the right candidates.
2. Rapidly changing teams and roles
The agile organisation responds more quickly to technology shifts, adjusting both its teams and roles to maximise opportunity. It also brings clear purpose and ownership which allows individual roles within a team to be clearly defined. It will therefore become even more important to focus on the requirements of the role, and to clearly understand these requirements before assessing candidates.
The agile organisation responds more quickly to technology shifts, adjusting both its teams and roles to maximise opportunity. It also brings clear purpose and ownership which allows individual roles within a team to be clearly defined. It will therefore become even more important to focus on the requirements of the role, and to clearly understand these requirements before assessing candidates.
3. Experience and expertise displaced by soft skills
When ING implemented their agile transformation, they lost a lot of people who had good knowledge but lacked the right mind-set; however their view was that knowledge can be easily regained if people have the intrinsic capability. With the pace of innovation increasing, a company can no longer hire purely for expertise, it now needs to identify individuals with the right soft skills and motivation to learn quickly and work collaboratively, in a high paced environment where technology is automating many areas that experience was previously valued.
When ING implemented their agile transformation, they lost a lot of people who had good knowledge but lacked the right mind-set; however their view was that knowledge can be easily regained if people have the intrinsic capability. With the pace of innovation increasing, a company can no longer hire purely for expertise, it now needs to identify individuals with the right soft skills and motivation to learn quickly and work collaboratively, in a high paced environment where technology is automating many areas that experience was previously valued.
4. Quality of hire will be critical
Notwithstanding increased resource demands on Talent Acquisition teams, organisations won’t be able to carry underperforming staff on projects that have a short timeframe. Quality of hire will therefore become critical, with a much stronger focus on a new employee's performance in role. Speed to competence will become the key metric, rather than time to hire.
Notwithstanding increased resource demands on Talent Acquisition teams, organisations won’t be able to carry underperforming staff on projects that have a short timeframe. Quality of hire will therefore become critical, with a much stronger focus on a new employee's performance in role. Speed to competence will become the key metric, rather than time to hire.
Given this rate of change in organisations, what is the likely impact on the structure of Talent Acquisition? Some organisations are embracing agile within corporate support functions, but it is widely recognised that many of these functions will remain more effective in their traditional structures. However, considering the impact of some of the questions below, Talent Acquisition will undoubtedly benefit from implementing some agile principles.
1. Customer centric
How do you measure if your internal client is happy with your service? Do you have tools to enable you to collaborate with them in an effective way?
How do you measure if your internal client is happy with your service? Do you have tools to enable you to collaborate with them in an effective way?
2. Clear purpose
Do you have a clear purpose for this role? Do you know what success would look like for someone that is a high performer in the role? Do you know what skills and experience would likely result in a high performer?
Do you have a clear purpose for this role? Do you know what success would look like for someone that is a high performer in the role? Do you know what skills and experience would likely result in a high performer?
3. Fast iterative cycles
Do you strive to remove the barriers to iterating quickly? What elements can be automated? What is delaying the process? Perhaps holding off Hiring Manager interviews until a small pool of quality candidates have been identified is not the most efficient approach? Would it be better to quickly iterate and get Manager feedback to learn more about what success may look like?
Do you strive to remove the barriers to iterating quickly? What elements can be automated? What is delaying the process? Perhaps holding off Hiring Manager interviews until a small pool of quality candidates have been identified is not the most efficient approach? Would it be better to quickly iterate and get Manager feedback to learn more about what success may look like?
4. Measure the right outcomes
Is it clear what success looks like, and do you have a plan for how you will regularly track and measure success? Are you measuring the right outcomes? Do historical metrics such as time to hire continue to align with business needs? How effective are you at identifying high performers that reach competence quickly, and understanding the factors that enable this to happen?
Is it clear what success looks like, and do you have a plan for how you will regularly track and measure success? Are you measuring the right outcomes? Do historical metrics such as time to hire continue to align with business needs? How effective are you at identifying high performers that reach competence quickly, and understanding the factors that enable this to happen?
5. Continious learning
Are you learning from what worked and what didn’t? Do you have a structured process to ensure the organisation continuously learns and adapts its talent acquisition process to build on the successes?
Are you learning from what worked and what didn’t? Do you have a structured process to ensure the organisation continuously learns and adapts its talent acquisition process to build on the successes?
Those organisations that embrace agile will strive and outperform their peers. This creates a huge opportunity for Talent Acquisition to become even more pivotal in the success and differentiation of an organisation, through the alignment of its practices with organisational need as well as the identification of new hires who will thrive and success in the Agile Organisation.
Spotted Zebra
Spotted Zebra can help Talent Acquisition adapt to this agile world, where they will be asked to do more recruiting, with more urgency and where quality of hire becomes more critical.
As a corporate support function, HR and Talent Acquisition is unlikely to become a fully agile function, but there are many benefits to be gained from embracing some of agile’s key principles. The following table highlights how our solution helps Talent Acquisition with this, giving them a platform to provide their internal customer with services which deliver more recruiting, faster results and can demonstrate quality of hire and better outcomes.
As a corporate support function, HR and Talent Acquisition is unlikely to become a fully agile function, but there are many benefits to be gained from embracing some of agile’s key principles. The following table highlights how our solution helps Talent Acquisition with this, giving them a platform to provide their internal customer with services which deliver more recruiting, faster results and can demonstrate quality of hire and better outcomes.
