Digital transformation is happening, and it’s happening extremely quickly. Digital transformation means more than just implementing technology to automate already existing processes or to expand capabilities within a team or organization (of course that is part of it), but the part that should be receiving the majority of your attention is how you can use tech to create new ways of working and delivering value to your organization. What do I mean? I mean making your organization agile.
Deloitte’s latest research shows that ‘redesigning [an] organization to be more digital and responsive’ is now the #1 human capital trend around the world and 59% of companies rate this as “urgent”. These statistics should come as no surprise, as ‘the dynamic nature of an increasingly digital economy and the expectations of data-empowered customers require businesses to operate with unprecedented combination of precision and agility’. Being agile within an organization is neither top-down nor bottom up: it is outside-in (1). Many research entities, such as McKinsey & Co., use the simile of a colony of bees when discussing agile organizational structure. Which is a great a way to go about it - a colony of bees only thrives and grows when every single bee is not only contributing, but is effectively working together with the rest of the beehive inhabitants. Companies that are aiming to become more agile need to start with designing their organization to drive speed, while also creating stability. Seems a little contradictory maybe, but check this out: Agile organizations are both stable and dynamic. Companies that want to continue being successful need to be “both extremely stable, with certain organizational features [remaining] the same for long stretches and rapid innovators that can adjust and re-adjust their resources quickly”. And this is because businesses need to keep up with the pace of technological progress.
Why aim for adaptability?
Strengths of agile organizations include such things as rapid integration and experimentation, as as well as information transparency. From a recent survey on agile units from McKinsey & Company, 90% of agile respondents say information on everything from customers to financials is freely available to employees. This need to embrace radical transparency is crucial when it comes to organizational agility. Just take a second to consider the reasoning behind this: websites such as Glassdoor and Salary.com provide an anonymous space for people to ‘openly rate employers, share details on salary and benefits, and offer commentary on hiring practices, management, etc.” (2). So watch out - there is now also the need to pay attention to your organization’s social footprint in the outside world, not just internally, which makes every company regardless of industry, a part of the people business.
So this is where the shift to a more digital and agile structure begins. More transparency goes hand-in-hand with ‘reducing structural hierarchy and minimizing communication overhead through the creation of semi-autonomous, self-organizing and cross-functional teams’ - again, think of the beehive. This also makes performance management especially crucial.
Leaders in agile organizations
“More than 44% of Millennials are now in leadership positions, but most believe they are receiving little to no development in their roles”. - Deloitte Global Human Capital Trends, 2017
If you’re familiar with any of the latest trends within the world of HR and employee engagement, you know that there is a collapse of market belief in traditional performance management. This need to redesign creates a unique role for HR to play, and many ‘HR leaders are rethinking leadership models to focus on values such as followership, fairness, empathy and building a growth mindset’. Obviously technology is critically important, but human capital remains indispensable. Leaders of the previously mentioned networked teams that should exist in an agile organization need to possess certain skills, as such as negotiation, resilience and systems thinking (3). And it’s important to remember that ‘the level of humanity you lead with and how you act as a culture carrier, understanding the people who you work with and treating them with respect in order to attract and develop talent will always be required’.
“The world of continuous performance management has exploded; in fact, more than 70% of companies are now designing new processes based on regular feedback and transparent goals”. - Bersin by Deloitte, Predictions Report 2018
Incorporating this current digital transformation with this need for companies to redesign to become more agile, there exists the additional need for leaders and HR departments to be able to align goals, provide feedback and coaching for performance in real-time via open conversations. Performance management not only boosts an individual performance, but also improves results of a team (3). Agile organizations should be a powerful machine for innovation and learning, and having a well-designed performance management system in place will make it so.
What does performance management within an agile organization tend to look like? We’ve listed some key components, as well as providing some tips on how to get started with incorporating these components in your organization.
Agile organizations are:
How? The focus has shifted from talking about people to talking with people, so start with having frequent communication. Make sure to look forward, and don’t dwell on past mistakes. Having continuous discussions leads to a more transparent mindset, meaning that employees will be able to trust your organization enough to be open and vulnerable about their weaknesses during one of these performance conversations.
How? It is through these regular conversations that you will naturally be able to see when something isn’t working and be able to make changes before it becomes too late. Keeping the line of conversation open and available will ensure that the inner workings within and across different teams is progressing as it should. Again, think transparency….
How? Make sure to lead by example. If the managers of teams, as well as the CEO of an entire organization, encourage transparency and ongoing interaction, the rest of the organization will follow suit. It’s also highly important to listen to all employees and make them a part of the decision making process. Make sure to integrate them into the workflow so collaboration becomes natural (4).This also will ensure that there is total goal alignment.
4. Bottom up
How? Keep your company employee-centric by giving your employees the same treatment as your customers. This means that development is guided by the manager, but led by the employee. Listen to what your employees want to learn more about or what new challenges they want to undertake, and accommodate them via informal, bite-size learning.
Not only will keeping in line with these components ensure that the integration between work and learning will be seamless, this will also create a more clear connection to your business purpose as all leaders, employees and teams will be on the same page when it comes to business goals. Making your organization more adaptable than before.
Organizations and leaders need to begin embracing a new way of thinking - an agile, continuous and collaborative way of thinking, and making sure that learning and development is closely aligned with the values of your business. As for HR - you will need to help guide managers and executives by translating the old ways of leadership into this new digital age.
- The Starr Conspiracy: Talent Management