In The Economist article of April 24th ‘Corporate Innovation – The Crucible of Creative Disruption’ , the author noted that whilst the ‘pandemic is an unmitigated disaster’ it is a big spur to innovation. It is forcing companies who currently lack the capital to invest to think how to do things differently without a huge outlay.
Kevan Hall of Global Integration asks a great question:
“Imagine yourself back in the autumn of 2019, before this crisis was even on the horizon. Now imagine that your company put together a working group to look at moving half of your employees to working from home. How long do you think that working group would have taken to get approval and how long would it have taken to actually execute the policy? What kinds of inertia and internal policies would have got in the way? Now, in reality, how long did it actually take to make that happen when there was no choice?”
So where is this going?
We will come out of this and it is the companies that have thought ahead and prepared new products and services that will thrive. The danger is we slip back into the old ways of working – the things that stopped us even thinking about half our employees working from home. In HR too we need to think ahead and prepare not just to support these new products and services, but new business models and new ways of working.
Core to this will be the productivity challenge. Most businesses are facing financial hardship and will not have the capital, financial or human, to invest. At the same time, they will be trying to do the same, more or even totally different things but with less. They will have to recapture and outperform their old levels of productivity fast.
As The Economist highlighted there are already agile firms who know that their strategies, capabilities, and business models are ‘wasting assets’. They understand that the current pace of change (which was true six months ago let alone today – probably the difference is no one can deny or hide from it now) means the factors which have value and helped to make their organisation competitive only a few weeks ago could become obsolete and a burden in the future. Organisations need to be able to adapt to survive, but they will have to do this at speed and be agile to remain ahead of the competition
So, what is agility?
Agility is an advanced and dynamic management capability. It allows the organisation to make timely, effective and sustained changes, to stay ahead of the competition in a fast-changing business context and deliver sustained high performance relative to peers over long time periods.
Agility is key to long-term superior performance, but it is also relatively rare. In an analysis of CRF member organisations conducted before the crisis, we found that only 17% could be considered agile. These organisations possess four ‘routines’; unique ways in which they develop and execute strategy and accelerate/drive change:
- The Strategising routine describes how agile organisations establish an aspirational purpose, develop a widely shared strategy and manage the climate and commitment to execution.
- The Perceiving routine concerns how agile organisations monitor their environment to sense changes, and rapidly communicate these perceptions to decision-makers who interpret and formulate appropriate responses.
- The Testing routine describes the unique approaches agile organisations have to setting up, running and learning from experiments.
- The Implementing routine describes the ability and capacity of agile organisations to implement both incremental and discontinuous change.
The role of the agility routines is to keep the organisation focused on the capabilities that ensure they survive today while also looking out for the capabilities they will need in the future. The routines give organisations the power and ability to change their capabilities. We need to adopt these routines today, during the crisis. If we adopt them after the crisis it will be too late as agile competitors will be up and running and ready to thrive in the post-pandemic world.
What does this mean for HR in supporting the organisation to become more agile?
HR executives must design HR practices, leadership philosophies and resource allocation processes that both support the deployment of current capabilities and build new, more sophisticated capabilities required for agility. As a minimum, HR must be fit for purpose – that is, deliver services that support the business strategy and be capable of continuous improvement. This will require two distinct additional features:
- Flexibility: processes can be operated effectively under different circumstances.
- Speed: processes operate at a speed that reflects the cycle time of the business, the pace of change in the business and its external environment, and have high levels of transparency.
Most of the HR functions we speak to are showing both speed and flexibility during the crisis so how can we learn from this and avoid slipping back into ‘same old, same old’?
As well as operating differently, we find that the capabilities required of HR are different in agile organisations:
- Strong business and commercial skills are integrated with a deep understanding of the business strategy and external environment.
- Analytic and consulting skills to diagnose appropriately, and competence in organisation design and implementation to develop suitable solutions.
- The confidence to be courageous, to confront authority appropriately, to call out what needs to be done, to influence and cajole others, and to persevere.
- An external focus, connecting people to the world outside the organisation. CRF‘s experience over 20 years suggests that HR professionals can benefit substantially from sharing ideas and experience with other organisations, and without any danger of revealing competitive information.
Organisation effectiveness is as much about properly aligning goals and making the right talent available at the right time as it is about having the right products in the right markets. However, agile organisations also need HR processes with flexibility and speed. They must be able to adjust and adapt as often as changes in the environment demand, without skipping a beat. We are doing it today – let’s not slip back into the old routines in the future.
Employee Engagement Through The Crisis, Wednesday 13th May, 12.00 – 13.00
The Geopolitical Outlook – How Is It Changing?, Tuesday 19th May, 12.00 – 13.00
Let’s Get (Beyond) Physical: Crafting A Multidimensional Approach To Employee Wellbeing, Wednesday 27th May, 11.30 – 12.30