Business must be agile, but what does that mean for HR?

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Business agility, the ability to rapidly and efficiently adapt to changes in the economic environment, is the only way organisations can survive amid the current volatility – but rather than a negative for HR, one consultancy firm assures this is the time to shine.
 
In the company’s annual Focus report released today, Hay Group says organisations have the opportunity to capitalise on the rapid shifts in the market and become known for expert responses. “The ability to adapt to change stands as the single most important differentiator for organisations successfully dealing with the current volatile business environment. The task of becoming more agile is not easy; however, we are increasingly finding that the more agile organisations are better placed than their peers to make decisions, reinvent their business models and re-deploy effort and resources to pre-empt and respond to the needs of the market,” Henriette Rothschild MD Hay Group Pacific said.
 
By studying the movements of agile organisations both globally and locally, Hay Group compiled eight differentiating characteristics which underpin ‘organisational agility’ – is your organisation on top?
 
1. Market intelligence
There is overwhelming information available to CEOs and organisations on their market, customer preferences, competitors, new trends and ideas. The organisations that are truly agile are those who have identified ways of turning random information and analytics from various sources into insights by the leadership team and who take decisive action on these. 
 
2. Enterprise-wide perspective
To be agile, an organisation needs to be led by an aligned executive team. However, what lets down many local executive teams is a lack of enterprise-wide perspective, sacrificed on the altar of structural silos and at times self-interest.
 
3. Decision-making
The common killer of agility is slow decision-making processes involving too many people, lack of clarity of outcomes and decisions easily overridden or forgotten. Agile organisations channel decision-making to the right (usually lower) level, including key people who need to have input and to those who feel accountable for the outcomes of the decision.
 
4. Leadership
Leaders are often no longer able to create the level of clarity of end results that may once have been possible in more traditional, hierarchical environments. However, employees are more likely to be engaged and retained in organisations that provide clarity of purpose and direction. The most successful leaders manage this balance by providing confidence and clarity of the values and overall goals of the organisation while openly acknowledging the ambiguity of charting the right course.
 
5. Performance focus
Locally we often struggle to hold people to account, feeling that in volatile times we may be ‘changing the goal posts’ if we reinforce performance expectations. As a result, many leaders shy away from setting and holding people to account for performance expectations. In contrast, leaders in agile organisations remain focused on organisational and individual performance goals and maintain these, even though the milestones may shift to respond to changes caused by market volatility and changes in customer expectations.
 
6. Flexible reward
Often cited as a reason organisations struggle to change, reward – in particular executive reward – is often seen as a millstone around the neck of boards and organisations. A well designed incentive plan should be able to respond to the change in game plan. Flexible incentive schemes are a key underpinning of success in quickly adapting to market changes and will continue to give Board the flexibility required to meet increasing shareholder demands.
 
7. Simplicity
As leaders we deal with complex issues and have to be realistic that there are not always quick fixes to complex issues. However, most effective executive teams are those which make strategic decisions of what not to do. Similarly, the most agile organisations recognise the critical role of middle managers in stripping out unnecessary complexity and activity from the organisation.
 
8. Culture
Often an outcome of getting the other seven building blocks right is a resulting ‘culture of agility’. This is a challenge as organisations continue to struggle with out-dated cultural elements, relevant to a traditional ‘command and control’ environment. While not easily able to be tackled in isolation, through addressing other building blocks, a more agile and responsive organisational culture can emerge.
  • Peter Maxfield on 20/11/2012 8:20:14 PM

    I think you need to be realistic within the aspect of the business you are influencing; I'm not sure where this fits in, but it at least provides a reference point, or balance. It probably relates to background considerations for decision making.

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