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Agile@HR - How agile impacts the HR function

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The HR function Plays a critial role in the Agile Transformation many companies are going through. This role is not easy to define and several conflicts of interests have to be balanced. This paper describes the Impact of Agile Working on HR, seen from an HR Managers view. (in Englisch)

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Agile@HR - How agile impacts the HR function

  1. 1. This handbook is created under the direction of the “Agile Management” professional group of the GPM German Association of Project Management e.V. The book is published under the Creative Common License: www.creativecommons.org The manual is developed with and based on openpm.info. Bibliografische Information der Deutschen Nationalbibliothek: Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.dnb.de abrufbar. Alfred Oswald, Wolfram Müller Herstellung und Verlag: BoD – Books on Demand, Norderstedt ISBN: 978-3-9783-7431-8929-4
  2. 2. (Figure based on http://www.forbes.com/sites/stevedenning/2016/09/08/explaining-agile/#727a73c12ef7, accessed 15/12/2016) All authors have ensured that they have been granted all copyrights and that they alone are fully responsible for any copyright issues with respect to their contributions in this handbook.
  3. 3. THE AUTHORS Prof. Dr.-Ing. Patrick Balve Heilbronn University, Faculty for Industrial and Process Engineering, 74081 Heilbronn holds a master’s degree in Mechanical Engineering with specialization in International Project Management. After graduating, Dr. Balve spent five years in the field of consulting and research at the renowned Fraunhofer- Institute for Manufacturing Engineering and Automation. Since then, he has held various management positions in logistics and quality in the automotive industry. In 2009, Dr. Balve was appointed professor at Heilbronn University in the Faculty of Industrial and Process Engineering. He is director of the “Manufacturing and Operations Management” bachelor’s program and head of the Heilbronn Learning Factory. His fields of research include lean manufacturing systems and state-of-the-art project management approaches. Markus Berk DB Systel GmbH, 60329 Frankfurt a. Main is Process Manager for Project Management processes at DB Systel GmbH. He has over 15 years’ experience as Project Manager in IT, several of them as Project Portfolio Manager. Dr. Frank Edelkraut Mentus GmbH, 22359 Hamburg
  4. 4. is Managing Director and a well-versed Human Resources manager. As a Technical Chemist he started his career in Project Management and subsequently became a Human Resources Manager. In the last 15 years he has worked as an Interim Manager in a variety of industries and as a trainer in Leadership Development Programs. He is a member of the professional group for Agile Management of the GPM (German Association for Project Management e.V.). His field of work is Organizational Development and Leadership Development and the consequences of agile methods on organizational design and developmental matters. Bernhard Frühlinger Horváth & Partners Management Consultants, 70173 Stuttgart is Senior Project Manager at Horváth & Partners Management Consultants in the field of IT Performance Management. A Master of International Business Administration, his focus areas of work lie in functional design and implementation management of corporate performance management systems. As a Certified Product Owner, he aims to improve project delivery and quality of results by applying agile practices to various project contexts. Rüdiger Lang AXA ART, 51067 Cologne is Head of the Process and IT department at AXA ART Versicherung AG. For 17 years, prior to his current job, he worked at several consulting companies (i.e. Cap Gemini, Consileon BC) as a consultant with a focus on both classic and Agile Project Management. He has also worked abroad for several years,
  5. 5. in Europe, South America and Oceania. He has been PMI certified since 2011, a Scrum Master and a member of the professional group on Agile Management of the GPM (German Association for Project Management). Götz Müller GeeMco : Götz Müller Consulting, 71554 Weissach has been involved with Lean Management and continuous improvement processes since 1998. His professional career started in software engineering for embedded systems in telecommunications and progressed into leading product development projects. Today, he is a self-employed consultant for process improvement. He supports companies and their workforce in improving procedures and operations, and in the implementation of continuous improvement processes. His clients are from a diverse range of branches and areas – industry, handicrafts, services and their production, product development, workshops, and administrative fields. Wolfram Müller VISTEM GmbH & Co.KG., 64646 Heppenheim Founder & Principal Consultant at Speed4Projects.net and VISTEM, Wolfram brings 25 years of experience as a Consulting Executive, IT Project Portfolio and Project Manager, Process Engineer, and Software Engineer. As head of the PMO at 1&1 Internet AG, he led 40 project managers in the delivery of 500 projects, innovating industry-leading methods, to drive unprecedented improvements in speed and reliability across the portfolio. He has published over 20 articles and books on ‘Critical Chain’, ‘Agile’, and ‘Lean’ and is a well-
  6. 6. known speaker in Europe on how to achieve hyper-productive IT project portfolios. Dr. Helge F. R. Nuhn PwC AG, 60329 Frankfurt studied Information Systems at the Technical University, Darmstadt and obtained his PhD (Dr. rer. pol.) from the European Business School University, Wiesbaden. His areas of research lie in the realm of organizational theory and temporary forms of organizing. A Certified Scrum Master and Certified LeSS Practitioner, he seeks to enhance the ways in which teams work in every conceivable project and environment. In his job as a manager and consultant, he is part of an internal Agile Community of Interest. Dr. Alfred Oswald IFST - Institute for Social Technologies GmbH, 52223 Stolberg earned his doctorate in Theoretical Physics at RWTH Aachen University. He is Managing Director at IFST-Institute for Social Technologies GmbH, a Consulting Institute for Agile and Fluid Organizations. He is head of the professional group for Agile Management at GPM (German Association for Project Management e.V.). His field of work is the efficiency and effectiveness of organizations through innovative social technologies. He has many years of experience in the management of innovative and complex projects, as well as in the transformation of project-oriented organizations into high-performance organizations.
  7. 7. Steve Raue The Systemic Excellence Group, 10117 Berlin is an expert for strategic change and project management. He has been part of the SEgroup since 2011 and is a member of the board. He uses his expertise in communications, culture and behavior analysis for an innovative approach to changing organizations in projects and team development. He is a Scrum Master and founding member of the professional group on Agile Management of the GPM (German Associations for Project Management e.V.). Steve is currently working on his doctorate in Cross-Cultural Complex Project Management, exploring implications for future project management based on systemic integration of conventional and agile project practices. Norbert Schaffitzel DB Systel GmbH, 60329 Frankfurt studied economics in Freiburg and Berlin with specialization in Business Informatics and marketing of investment goods. Since 1988 he has been working in enterprise IT, initially as a software developer and subsequently as project manager on different projects at DB Systel GmbH, the IT service provider for Deutsche Bahn AG. Since 2012 his special interest has been the implementation of Agile Management techniques in projects of large organizations and the transformation of project teams by using agile practices. To extend his knowledge of agile experiences and management of the future, in 2014 he joined the GPM working group "Agile Management and Methods".
  8. 8. Dr. Johann Stiebellehner Technisches Büro für Informatik, 1100 Vienna Johann brings 30 years of practical experience as Software Developer, Software Engineer, and IT Program and Project Manager. He studied Computer Science at the Technical University of Vienna and received his doctorate in Informatics from the University of Vienna (Prof. Schauer, Prof. Vinek). After working for 8 years as Project manager for Siemens IT Solutions and Services, he founded “Technisches Büro für Informatik – Dr. Stiebellehner” in Vienna, a local company with a strong focus on IT software projects. Prof. Dr. Hubertus C. Tuczek University of Applied Sciences Landshut, 84036 Landshut TCC-Management – Strategy Consulting, 81247 Munich received his doctorate in Engineering from the Technical University in Munich (TUM) (Prof. Milberg). He has accumulated over 30 years of management experience in the machinery and equipment, aerospace and automotive industries. For 17 years he held the position of group vice president on the board of the Dräxlmaier Group, an internationally operating automotive supplier, with responsibility for international business development, quality and project management, as well as global procurement. At the beginning of 2015 he was appointed Professor for Management and Leadership at the University of Applied Sciences in Landshut, near Munich. His research is focused on the changing requirements for leadership in the digital age.
  9. 9. PREFACE Perhaps you are familiar with the phrase: “Are you just residing or have you started to live? (Wohnst du noch oder lebst du schon?)“ If we interpret the message in this slogan within the context of “Agility”, it could be more freely interpreted as "Are you still just plodding on, or are you making sense of your life?" The buzzwords “Agility, Agile or Agile Management” are often interpreted as miracle-workers. But the number of different meanings attributed to these terms is immense: There are thousands of experts and tens of thousands of books and articles on what agile work actually is. And on the subject of agility, everyone is an expert – everyone knows how to do it best. But out of the thousands of experts and books, which ones are right? Or are all of the experts right? What is of importance? What do we need to know, so we can assess what is right in our own context? There are those that suggest “unless you are sprinting all the time, you are too slow, and you are not agile”. Then there are others who argue that “if you are unsure of your product vision, then this is a sure way to make lots of mistakes”. Others place trusty old Lean and Kanban on a pedestal. And then there are those who assume complexity is responsible for everything. And if all else fails – it is a question of attitude as to whether one is agile or not. Last but not least, there are the pragmatists who have introduced the hybrid of - ‘do not throw away the old, but include something new’. The “Agile Management” professional group of the GPM (German Association for Project Management e.V.) was founded to offer a deeper understanding of agility: our aim is to understand the need for a new kind of management, grounded on basic principles and free from pigeonholing.
  10. 10. Our vision “together with users, to establish cross-sectoral agile working models to deliver added value for the future” flows into an integral theory- practice framework: We believe that this framework includes a new mind-set of agility, systemic thinking, an openness to welcome the ‘new’ as a friend, and the capability of retaining proven management tools. When one starts to deal with the important things in life like love, truth or agility, then the picture tends to have as many facets as there are people. In discussing this topic, it becomes increasingly clear that it is not possible to give an operational definition of agility without including a context. – Hence this book has no chapter on "definition". What emerges though, are principles of agility (like natural laws) that hold concepts together. These principles are explainable and help in understanding the practice. They also help assess which expert ideas are useful and which are only useful in a particular context. This book was conceived as a manual or "handbook" and ended up as a "brain book". It is full of concepts and principles – some rough and coarse – some fine polished. But all help to understand and put into practice the agile movement, and to ride this great wave without sinking! Who should read this Book? This book is written for anyone who is interested in agility or needs to be agile. It is for those who seek deeper knowledge about what keeps the agile world together. You can read it from the perspective of a top manager or decision maker who feels the urge to be more agile. But you can also take the book and just follow it from the perspective of a user. What do you get? ● A systemic picture of agility – to enable you to analyze your system (your team, your department, your company or your business network)
  11. 11. and identify fields of agile application and the specific need for agility. ● The ingredients of an agile mind-set – this allows you to transform your organization and develop an agile culture for your organization. ● The theoretical foundation of agile principles – so that you can really understand and assess the value of all the expert ideas for you and your organization. You will get the necessary skills to tailor organization specific agile frameworks without losing essential ingredients. ● Input for your own reflections – you will be capable of innovating agility and be ahead of the main stream. The Principles behind the Book? We illustrate the big picture of the concept of the book by roughly outlining the content of this book: PART 1 FOUNDATION In Part I FOUNDATION we start with an outline of one of the main drivers of complexity, the megatrend “digitization” followed by short reasoning of the name “Management 4.0” for this book. We then go on to explain the basic principles of Management 4.0: ● the key principles of an agile mind-set and the link to Management 4.0 ● the relationship of agility and complexity ● the “definition” of hybrid (project) management ● the basics of self-organization ● the key principles of the agile frameworks Scrum and Kanban from the perspective of Management 4.0 ● the relationship between cybernetics and agility and derive guidelines for the design of agile and fluid organizations
  12. 12. ● the relationship to lean management and the IPMA project excellence model ICB 4.0 PART II BECOME AGILE AND STAY AGILE In Part II BECOME AGILE AND STAY AGILE we start with the chapter “Agile Radar”, which gives a description of a tool that can be used to explore organizational agility needs, capabilities and potentials. With the help of the “Agile Radar” we ● provide the reader with an agility assessment of their organization ● explain which agile methods and enablers to use, and when and how ● show (the first) blueprints for agile transformation (in Release 2, see below) We then describe the impact of agile working on human resource issues. We outline the “Reliable and Ultimate Scrum” agile frameworks as examples of how agile principles can be applied, and give input to the discussion on agility and fixed price contracts. In the chapter “Agile Scaling”, we outline the Scaled Agile Framework SAFe and the Critical Chain Project Management method. PART III AGILE MANAGEMENT IN PRACTICE Part III AGILE MANAGEMENT IN PRACTICE is devoted to practical examples of Management 4.0. The Management 4.0 Handbook – Release 1: A Minimal Viable Product One of the most important agile principles is to get feedback from customers
  13. 13. as quickly as possible! The book is not yet finished, and we still have enough material remaining for further releases – there is so much more to write and say. So much so, that it would be easy to keep working on the book for an infinite amount of time. However, we believe that this first release – contains enough to be of value for you as reader. Your feedback is of great importance to us – it will help us to improve quickly! We have created a product backlog on the next page, which contains the topics we have planned for the next release of the handbook. We intend to change the content and priorities of the topics depending on the feedback we receive from you. So feel free - after reading the book – to discuss your ideas with us. You can contact us at: agile-management@gpm-ipma.de. Nürnberg, December 2016 Alfred Oswald and Wolfram Müller
  14. 14. The impact of working Agile on Human Resources Author: Frank Edelkraut Summary: Agile methods have a significant effect on several areas, typically in the field of Human resources. Organizational design, compensation & benefits, performance management, labor relations, and career systems are just a few examples. To make an agile transformation effective and sustainable it is critical to involve HR in the process. In the majority of companies facing agile transformation, the initial analyses and decisions will have to be in collaboration with HR and will also define the future role of HR. Key Terms: Organizational Design, Human Resources, Agile Transformation Although the use of agile methods is widespread, they are still mostly seen as an IT and software development related matter. But as soon the “IT bubble” has burst, agile becomes a major challenge for HR management. Looking at it from an HR point of view, agile is much more than just a method like SCRUM, or an experiment on future ways of working. Nearly all key systems in HR are affected by agile and it will have a serious impact on the way HR management is carried out in the future. If you are an HR representative, it makes the most sense to have a look at the big picture and the major trends affecting the business world, in a holistic way. Then it will become obvious that agile is just one out of several topics following similar patterns and logic, all resulting in the need for organizational adaptions. Looking only at agile methods would be short-sighted. The modern business world is characterized by the digitalized Internet of Things (IoT), agile methods and other trends, all leading to a context we currently describe by the acronym VUCA. VUCA stands for volatile, uncertain, complex and
  15. 15. ambiguous. In business, this means companies face fast changes, which are increasingly less predictable, leading to a more complex environment, and making management decisions much harder. For example, the increasing speed of business increases pressure on managers to decide and act faster. At the same time, the increasing amount of relevant information and contradictions leads to more options and lower levels of predictability with respect to the outcome of decisions. All these effects are driven by technological innovation, new business models, networking models and individualization. One of the goals of modern industries is one piece flow, which means every product is unique. This corresponds very well to the way in which HR views employees who are unique in themselves, with digitalization and globalization also having increasing importance. But, this new ideal of individual treatment for each employee is met with reality in a world where standardized HR systems in a command & control logic are still widespread. A move into an agile world will have a significant impact on HR systems and create a need for major changes. Looking at the discussion around agile methods it becomes clear that it has an effect on other topics, such as team management or leadership. This is also true for this handbook, where you will find corresponding chapters. Fewer discussions relate to the impact of working agile on a company’s organizational structure and processes. In this chapter we will discuss in more depth, how agile methods may effect Human resources management. Primarily, it must be said, that to date, there is very little experience in this area. Most companies who have been using agile methods for some time, are small or medium sized IT companies, and have proven to be organizationally flexible, with most having homogenous and highly-educated staff. Workers councils and other regulatory factors are of minor importance. So there is little “organizational complexity”, that allows an agile mind-set for trialing its use for
  16. 16. organizational development. This will be different in the future, in bigger and more diverse companies. Their adaption of agile and the resulting need to reconsider their organization will have to be focused, due to the far greater number of employees in the companies and the significantly higher level of complexity of any organizational change. An increasing number of mid-sized companies and large enterprises use agile methods in parts of their organization. Here, the consequences on HR are significantly higher, since highly sophisticated and standardized HR systems exist, but do not necessarily suit agile working and the agile mind-set. A serious reconsideration of the HR systems in place is required. Using the fictitious example of Meier Ltd. as a blueprint, we will discuss the initial examination and adaption of a “classical” HR system to the agile future. Meier Ltd. could be a mid-sized mechanical engineering company located in a rural area in Europe. Approximately 1,000 employees produce high-precision machine components for the industrial goods industry. Over recent years the project and systems business has become more relevant and actually contributes 50% to the yearly turnover. This 50:50 split is expected to be stable for the next few years. The project business is mostly carried out in cooperation with other vendors or the customer, and working in mixed teams or task forces has become standard. Software development for embedded systems and control software, as well as some project work, is already done using agile methods like Scrum. This reflects a clear need to react flexibly to changing customer requirements and deliver individualized products for a global market. Until now, agile methods have been mainly used in software development, and more recently the engineering department has started to work more agile. Productivity has increased and customer feedback has been positive so far. On the other hand, the first signs of conflict between agile working teams and parts of the “classical” organization have been observed. Agile team members in particular, have an increasing number of complaints about bureaucratic and
  17. 17. “old-fashioned” processes, which hinder their ability to work in a self- organized and flexible fashion. Managers obviously have difficulties in handling these conflicts, not least due to the fact that the managers’ roles have had to change too. The workers council recently complained of violations of existing agreements on labor hours and freelance staff. For management, it has already become clear that this creeping process will sooner or later lead to serious trouble. Now is the time to analyze the consequences resulting from the use of agile methods and how to handle them. Assumptions for the future include the parallel existence of agile and “classical” working units and teams. For the time being, production will stick to a high-quality, high-efficiency system and the related shift system. Project organization on the other hand, will be organized more flexibly, to serve a more fluid market. A significant restructuring and change process may be needed to make this part of the company the source for more innovations and more adaptable to the market. Overall, several managers feel quite uncomfortable and insecure about the near future and the changes they may face. The future is uncertain, markets are volatile and none of them have any significant experience with agile methods or agile management. How will they be able to manage such processes with an unknown future? The HR manager is a seasoned professional with a long professional history in HR. He has experienced a lot of strategic changes and restructurings, which makes him more relaxed than many of his colleagues in management. He had already anticipated some of the challenges caused by the use of agile methods, and had recently started to analyze the actual status of HR systems and processes and their suitability for a more agile future. He asked a younger colleague who was acting as the HR Business Partner (HRBP) for the project organization, to join him in his effort to create an agile-fit HR department. The HRBP was already experienced in agile working in projects,
  18. 18. and as an experiment, had already tried to use Scrum in his HR duties. Together, they believe they are well-prepared for the next steps. But in actual fact, they are not really sure of the effects that agile work may have, as IT and Engineering started to use agile methods as an internal experiment “below the radar”, with no interface to other departments or top management. This does not make life easy for the two HR managers as they will initially have to analyze the current status within the IT and engineering department. The two department heads have been asked to describe their experience to date and name those topics they believe to be the most relevant. For this they are asked to conduct a self-developed “HR Agility Check”, which is based on the German HR Society DGfP’s HR reference model. Figure 7-1: Reference Model of HR Management (DGfP 2010)
  19. 19. Figure 7-2: Reference model and more specific topics to manage the "life- cycle“ of an employee (DGfP 2010) The HR Agility Check itself is a simple Excel sheet (Figure 7-3, Edelkraut 2014), denoting fields of action stated in the DGfP reference model. (Figure 7- 1 and 7-2). For each of these topics, the department heads are asked to describe the impact of working agile on the aspects mentioned in column two, and the resulting consequences. Based on this analysis, it should be easy to decide on the urgency and importance of adapting HR systems to the new working methods.
  20. 20. Figure 7-3 HR Agility Check. It asks how the use of agile methods will impact on which different topics (Figure 7-2) and what needs to be done for an action result Very soon the limits of the HR Agility Check are realized. To use it properly, there needs to be a clear understanding of the origin of influencing factors. The discussion shows that it is not easy to separate cause from symptom, and to separate the use of agile methods as a cause from other causes, such as communication deficits, leadership behavior etc., leading to the same or similar effects. Additionally, it becomes obvious that those managers not experienced in agile method use have some difficulty in understanding the
  21. 21. mind-set (compare chapter 3.2) behind agile. To make things even more complex, the department heads are not well-versed in most of the framework conditions for HR management. Aspects related to labor law or HR administration have always been delegated to the HR department, and they do not have a sufficiently complete and current overview of all HR systems and their background. This makes it even more difficult to describe the effects of agile on their departments. To describe causes and symptoms more precisely, it was decided to add another run of analyses to the process and to first use an EIA matrix (described below), to paint a concrete and detailed picture of the status in both departments, and to separate the consequences of agile methods from normal “operational insanity and frictions”. For the next four weeks, both department heads will create a daily record, listing all peculiarities for the respective day. The EIA is inspired from aviation, where all pilots create a report after each flight. In this, they note all aspects they observed regarding technology, collaboration with cabin crew, flight control etc. The background to this, is to minimize accidents as much as possible and the awareness that accidents are mostly a combination of at least two or three technical malfunctions, collaborations or other human failures. EIA stands for: E – Event, e.g. redundant sensors give different data, misunderstand- ing between pilots and flight control etc. I – Incident, e.g. planes getting too close and a collision could have happened, lightning strike followed by a malfunction of some instruments etc. A – Accident, e.g. punctured tyre during landing, a passenger injures another passenger, or of course the loss of a plane
  22. 22. During the four weeks of analyses, the two department heads not only take notes on what happens, they also create clusters of similar incidents and prioritize by impact. In the end, they are able to see clearly the type of causes and which effects they create on operations. In a subsequent meeting the managers and HR are not really surprised to see that 90% of all problems result from “classical” topics and are not related to the use of agile methods. Most problems initially seen as a result of agile work are common in other departments too and are caused by process deviations, or human failure like misjudgments or conflicts etc. These aspects are seen as a matter of continuous improvement and excluded from further discussion. The EIA reveals certain aspects, which are related to agile method use and HR systems: 1. Culture and values 2. Organizational structure and process organization 3. Role of managers and administrative departments 4. Learning & Development, career models 5. Working hours and locations 6. Performance management As a next step, it is agreed that HR should be allowed to find out what the concrete aspects within the identified clusters are, how other companies have handled similar questions, and what the next steps might look like. When the IT head suggests that this would not be an agile approach, everyone laughs. The agreed approach represents a more “classical” way using experts to create a plan for further action carried out by other stakeholders. On the other
  23. 23. hand, this approach is time-saving, since an agile approach would have required at least some level of expertise with complex HR systems and labor law, which they do not have. This already shows a potential conflict of interest that could occur in many companies during their transition to a more agile future. The agile mind-set and methods needs a certain level of experience and expertise, and it is quite tempting to stick to common approaches. At Meier, they agree to remain alert during their own discussions and actions, and to introduce agile in a more step by step approach. In the first phase, related to analyses, the existing expert organization will be used. In the following concept phase, they want to develop two options, a “classical” option created by HR, and an agile one created in a cross-functional team. Subsequently, the results and the experience from the processes will be compared, to learn more about the pros and cons, and to decide on the next steps in the implementation of agile. The two HR managers did not actually realize the level of complexity prior to starting to go into detail. They realized that most areas of HR management are affected by using agile methods. This ranges from easy to design and decide aspects, to legal conditions, which cannot be influenced, yet will cause severe problems. Since many topics are interconnected (e.g. performance management is related to compensation & benefits and career models and HR information systems and others) it is quite difficult to find a good starting point. The lack of well documented experience in the form of benchmarks, blueprints etc. does not make it any easier for HR. So where do they start and how should they proceed? First of all, the HR managers decide to find some kind of structure to help them define a more systematic approach. They finally decide to use the Dilts pyramid, which was originally created as a coaching tool by Robert Dilts, widely used as a model for personal change. The decision is based on the insight that personal change and agile transformation of a whole company have different complexities, but follow more or less the same patterns.
  24. 24. Additionally, the levels in the pyramid can be used to structure the different aspects in agile methods. To get a better overview, the HRBP offers to collect examples from the HR community and identify the different ways that the implementation of agile methods have been handled. A week later, he presented his findings (Edelkraut 2016) from interviews with HR managers in 37 companies who are already using agile methods. Only a minority of HR managers had started to find ways in which to handle consequences. Those who had already dealt with the topic reported two major insights: 1. There is a high level of complexity in an agile transformation, as they mostly had to find ways to run agile and “classical” systems in parallel. Different views, expectations and competencies of employees also resulted in many conflicts of interests. 2. The best way to solve the problems was to use agile methods from the start and quickly learn where agile has advantages and where other approaches are preferred. Customer orientation, iterations, simulations, prototypes etc. all helped the move from the “old world” into an agile setting.
  25. 25. Figure 7-4: Dilts Pyramid and the levels of an agile transformation Agile methods and Works Constitution Act (Betriebsverfassungsgesetz in Germany) In their discussion of the examples found in the research, the two HR managers started on the bottom level of the Dilts pyramid. They interpreted “where & what” in relation to the legal, economic and business framework. With respect to the examples, these are industry, location, laws and other regulations etc. From an HR point of view, national labor law is one of the key factors to look at. Located in Germany, the works constitution act is highly relevant since it affects HR on a daily basis, especially via the workers council. Additionally, legal regulations for working times, social security, employment of freelancers etc. all have to be considered and mostly negotiated with the workers council.
  26. 26. Cooperation with the workers council is based on the German works constitution act (Betriebsverfassungsgesetz; BetrVG), which defines a wide range of consulting and participation rights and consequently forces the company to co-determine and come to an agreement with the workers council. The standard result is a company agreement defining the way a topic is handled in daily operations. If agile methods become standard, the following paragraphs will have to be considered: § 111 BetrVG looks at new standards and procedures which lead to a change in operations § 96 BetrVG defines the rights of a workers council in relation to personnel development measures § 87 BetrVG is highly relevant for the standard interaction of HR and workers’ council, since it defines powerful employee rights with respect to any measures that effect the individual employee. This may relate to compensation&benefits, recruitment, performance measurement, working hours and shift systems, technical installations and so on. From a workers councils point of view, the most relevant aspects of working agile will probably be: ● new ways of organizing work, including changes in roles and consequences for individual employees ● defining objectives and measuring progress ● compensation&benefit schemes and performance measurements ● equal treatment within the workforce All of these topics will change in those units that are working agile, and for HR this will mean long and hard negotiations.
  27. 27. One exemplary company, which has already started the communication and negotiation process with its workers’ council, is Deutsche Telekom AG. Both parties agreed on a company agreement defining the general outlines for working agile. The aspects integrated into the agreement are: ● Assignment to agile teams ● Management ● Working times ● Holidays and representations ● Retrospectives ● Measuring performance and behavior ● Qualifications The agreement was discussed in 2011 and is based on little operational experience. Therefore, the individual paragraphs are rather vague. On the other hand, an early start followed by later refinements may be an excellent blueprint for other companies. It fits well into the agile mind-set and allows both negotiation partners to gain relevant experience. Although there are no concrete clues as to what an agreement may look like, the impact of agile working on the relationship between the workers council and the company becomes clear. Since most companies bundle all activities related to the workers council within HR, the role of HR in agile transformation becomes critical. Here, the relevant competencies and experience can be found, as well as another relevant aspect that is influenced by HR: Time. Agile Transition and Agile Transformation have a positive side-effect, many processes become faster. Negotiations between the workers council and HR on the other hand, tend to be lengthy processes with an outcome that is hard to predict. There is an obvious conflict regarding timelines, and HR and a collaborative workers council will have to find procedural answers as to how to handle this conflict of interests. When both HR managers discussed how the agile mind-set and the works
  28. 28. constitution act fit together, a contradiction became obvious. The works constitution act is meant to protect workers against the interests of their employer. The law was passed in the late fifties and partly reformed in the seventies in the last century. It was thought up, discussed and institutionalized in an industrial era. Since that time, the business world has changed dramatically and the logic behind the law does not fit into the new world any more. The concept of a workers council for example, is collective representation to protect workers from any harm. In a world where agile teams form and reassemble quickly and highly educated individuals follow their own career and learning paths, this collective representation (every agreement with a workers council is binding to all employees) is not in the interest of individual employees. So how can a workers council member balance this? Develop individuals and organizations – Create spheres for learning and experience On the next level on the Dilts pyramid, “Behavior – What”, the HRBP selected an example showing how agile working methods can be introduced into an organization. Swisscom has already started to prepare itself for changes and conditions in the telecommunication market. The whole industry is in the midst of a fast moving process of change, fueled by competitive pressure. The ability to act flexibly and agile is critical for success. One of the many consequences is a more intense use of Design Thinking, supporting the strategic principle to become an Experience Driven company (Haas 2015). The intention is to create more innovations and foster the development of the whole company. At the head office in Berne, a Design Thinking Lab has been installed to develop new products and services following the principle of User Centric Design. At the same time, the Lab is being used as a development center for employees and managers. They can learn to use agile methods in a “Safe
  29. 29. Harbor” here, using agile principles and gaining experience in agile operations. This approach catalyzes the use of agile methods in day to day operations and the probability for success increases significantly. Participants trained in the lab showed a higher level of motivation and willingness to transfer new experiences, than is usual in standard development settings. Applying the Swisscom experience to employee and leadership development at Meier would mean significant changes. The current system is based on actual common principles and roles of managers (setting objectives, measuring performance, career paths etc.). Trainings are conducted in standard formats, organized centrally within HR. A development model suiting agile principles and agile processes would need to change from a hierarchical to an individualized and self-driven framework, allowing employees and managers to decide for themselves when, how and what to learn. Agile development is meant to offer solutions to the question: “I have a problem here, how can I solve it?” To do this, all employees would need to be enabled and empowered to make learning their own process, and in addition, a peer consulting mind-set would have to be introduced. Last but not least, learning would require time and space to experiment and use simulations to make it more experience-based and operations-related. For HR this would mean handing over more responsibility to the managers who are closer to the employees and the actual challenges, resulting in the need to learn. The main driver for this role shift is the expected need for more individualized learning settings and measures, which are often related to the working situation and working place. Bringing learning into the work place also means it will have an impact on the organization of work itself, which is not the case in the world of learning, where learning formats are located outside, in training sessions and workshops. In the agile learning world, HR remains responsible for the selection and development of learning formats
  30. 30. and concepts, and the selection of vendors. The mind-set will be that of an enabler and consultant. A trainer´s role would move towards that of a community manager, supporting individual learning processes. Last but not least, the managers would be responsible for the integration of learning processes into the actual workplace and act as coaches for their team members. As a result of the discussion, both HR managers conceived the idea of a type of laboratory, which could be helpful for experimenting with new topics and competencies and creating and testing prototypes. Additionally, a Lab could also be used to distribute knowledge and experience, as the Swisscom example has shown. In a fast changing and barely predictable business environment, experiments and prototypes require a separate platform, since they cannot really be integrated into the operational landscape. Organizational design for agile Organizations – Rules and Behavior Within the Dilts pyramid the level “Capabilities – How” is very much related to skills and capabilities. On an individual level, this is mainly a matter of competencies (see previous section), on a company level, it is related more to the procedural structure. Due to the strong relation between organizational and procedural structure, HR would need to combine both in an organizational design process. The objective for an organizational design process is to build an organization that: ● supports the company´s strategy ● allows efficient cooperation of all business units ● ensures all necessary information is available where needed Most companies are organized by functional units, following the logic of dividing work into units that process work sequentially by respective experts.
  31. 31. In an agile world, cross-functional teams have proved to be more effective and often more efficient. Customer orientation and continuous delivery are easier if all relevant functions cooperate directly and organize themselves. An example of an organization following this logic is Spotify. Their organizational design has been published and discussed several times and is well documented (e.g. Kniberg & Ivarsson 2012). The principle of Spotify´s organization is the enablement of Scrum teams, and it uses social group structures as an orientation. In the end, it is again, a kind of matrix organization, but the needs of the employees and teams are said to be served better. Cooperation, learning and (individual) development are key objectives for the organization, which has proved to be highly innovative and motivational. Figure 7-5: Organizational structure at Spotify (Kniberg 2012) Squad: The central org-unit and backbone of the organization is a team (Squad) which acts as a kind of mini start-up. Teams get all the competencies
  32. 32. they need and are co-located. Squads work on exactly one task until it is ready. All teams are asked to use 10% of their working time for active learning. The topics and methods covered in this learning time are decided by the teams. Tribe: A tribe is a group of Squads working on the same or interconnected tasks. The tribe is seen as an incubator for the “start-ups” (Squads). A tribe is managed by a tribe leader whose main responsibility is the creation of a supportive framework. Chapters and guilds: Chapters and guilds are Spotify´s answer to the main disadvantage of self-organized teams. The decrease in central control may lead to doubling of work, and loss of strategic focus and knowledge exchange. Chapters are meant to bundle those team members into tribes with similar expertise, to share knowledge and work on related topics. Whereas chapters are communities within a tribe, guilds are a kind of community of interest for the whole company. Every guild has a guild coordinator to facilitate topics and processes. As a whole, the organization of Spotify is focused on delivery of projects and cooperation of the project teams. Functional units are secondary and mainly for development and strategic coordination. When the two HR managers at Meier try to transfer the Spotify organizational model to their own company, it is hard to imagine what this will look like. This is partly due to lack of experience, but the main questions are related to the design of an organization primarily based on teams. For example, they struggle to describe the development of a company in which all teams independently follow their own processes which can be redefined in changing contexts. Without central monitoring there is a risk of diverging teams and processes. HR still have to monitor all developments and facilitate the processes, so they still fit into the strategy and to all relevant legal and regulatory requirements.
  33. 33. For those teams working on projects and service delivery, a more agile organization like Spotify may be an advantage. For the production units, this is not so obvious, so both managers decide to postpone the topic and to involve the managers and selected team members in production first, to “simulate” an agile production system. This resulted from a discussion on digitalized production (Industrie 4.0, IoT), which seems to have been helpful. From an HR point of view, digitalization in production may have similar effects to agile methods on labour organization, role definitions etc. Values and Beliefs – A foundation for cooperation Whilst discussing “agile production”, the two HR managers became aware of the different grades of agility that different org-units would have in the future, and that there would be different needs for HR support. What this could look like is shown in an example the HR Manager selected for the level “Values & beliefs – Why“ in the Dilts Pyramid. Haufe Umantis became famous in 2013, when the CEO at the time, Herrmann Arnold, stepped down and asked employees to elect his successor. Since that time, all managers in the company have been elected democratically. The logic behind this step is described by the current CEO Marc Stoffel, who said: “The employees anyway elect the managers every day. If I as a manger act in a way the colleagues do not understand or agree on, they will not follow instructions and in extreme cases leave the company.” (Haufe Umantis 2015). At Haufe Umantis they use the so-called Haufe-Quadrant (see Figure 7-6). It is meant to show the link between organizational design and the self- conception of employees. It is formed by a two axis organizational design referred to as “controlled” or “self-driven”, and the role of employees referred to as “Executer” or “Creator”. The resulting four boxes represent four different ways of interaction:
  34. 34. Command & Control: Executers act within a structured design, which is still a common way of working in companies. Employees expect and need clear instructions, which are executed within a defined framework of processes. Agile Network: In some ways this is exactly the opposite. In a flexible organization, design employees work in self-organized and self-responsible teams. Agile networks are based on trust and quick action in flexible markets. Agile networks are used to handle complex topics and react quickly to changing demands. Figure 7-6: Haufe-Quadrant (Haufe 2015) Shadow organization: Here employees want to act pro-actively and self- responsibly, but a rigid organizational design does not allow any non- conformist action. Consequently, breaking rules and creating work-arounds are standard behavior, as they seem to be the only chance to achieve better
  35. 35. solutions. Overloaded Organization: If executers find themselves in an open organizational design they tend to feel lost and insecure. They are unable to act in a self-directed and self-organized way to reach objectives. The Haufe-Quadrant is a good tool for initial analyzes of teams or larger units in an organization to find out how employee expectations and competencies fit into the current and any future organizational design. With respect to the different departments at Meier GmbH, both HR Managers asked themselves as an initial overall consideration, where to place the different departments. Regarding the IT department, both soon agree, that IT clearly works within the upper right quadrant. The employees are working in a self-organized way and they form a network, which is predominated by bilateral support, open communication and flexibility. As the existing HR systems are directed towards a hierarchic production unit, it soon became evident for them both, that already known conflicts arose at this point and that the agile reality of the IT department does not correspond to current HR systems. With respect to the Production department, both see the department clearly within the quadrant “order & control”. The interesting part here is that both the production manager and the employees are relatively satisfied with this situation. The multiple quality presets of customers, narrow profit margins, concern about efficiency on the one hand, and stringent safety regulations, a relatively low but after all heterogeneous competence level of staff on the other hand make this form of organization appropriate at the moment. However, the production manager has already clearly voiced concern that the upcoming changes from increasing digitalization and the trend towards “Losgrösse 1” (Industry 4.0) will exceed all limits of the system’s efficacy. Here as well, adaptive structures and more self-regulated working employees will become essential in the future.
  36. 36. The analyses for the HR department demonstrated to both HR managers that the analysis should not only look at the entire department, but also at separate parts and individual processes. The analysis had already shown that the basic logic of HR management broadly follows a classic organizational structure and contains many systems belonging to the category “order & control”. They had both already discussed objective agreements for Performance Management (Zielvereinbarung). Furthermore, people development was based upon this and organized as a centralized system (both topics will be discussed later in detail). The roles of HR Business Partners, on the other hand, who are assigned to certain organization sectors of the company, feature a great deal of flexibility, as well as autonomous decisions and implementation. This often results in a type of shadow system, where specific needs of a department are supported by innovative, and therefore non concerted solutions or even where existing processes or rules are circumvented to achieve an adequate solution. The Compensation&Benefits team (Lohn- und Gehaltsabrechnung) on the contrary, works according to a classical structure, aiming for compliance and zero-failure, whilst a project to support the integration of an acquired company was almost agile. Therefore, a varied range could be observed, even within the HR department alone, and the question as to what the expectation of individual HR colleagues would be, also revealed variance from the employee’s point of view. A reorganization of HR, which would be inevitable when introducing agile work, would inevitably cause a certain amount of turmoil within HR. Vision and Guiding Principles in an agile economy – Purpose and Alignment in an organization The discussion on the values and basic attitude of an agile organization, indicated to both HR managers, that there is a clear need for a vision to describe the future mind-set and the direction of the company’s development.
  37. 37. Most companies have a vision describing the fundamental alignment and basic principles to follow. In an economy that is becoming more and more VUCA oriented, alignment and certainty will progressively be lost or be only short-term. Many of the existing vision statements are no longer able to fulfill their purpose. The managing directors and HR therefore, should ask themselves if there is a need for action with respect to a new vision and corporate culture. The discussion on the values and basic attitude of an agile organization demonstrated to the HR managers at Meier GmbH that the company’s organizational design and overriding alignment required a lot of attention. This is important, because fundamental decisions concerning organizational design are influenced by underlying values and a joint understanding of a company’s identity and purpose. It makes no sense to define an organization where real employee behavior and the needs of agile working do not correspond. Side note: Vision statement A vision statement is a formally written declaration by an organization on self-understanding and basic principles. It depicts a target state (realistic utopia). For internal organization, a vision serves as an orientation, and is therefore like an instruction manual and serves as motivation for both the whole organization and individual members. For the public (general public, customer) it should make clear what the organization stands for. It is the basis of corporate identity. A vision declares the company’s mission and vision as well as the aimed-for corporate culture. It is part of normative management and forms the frame for overall strategies, aims and operative actions. Source: https://de.wikipedia.org/wiki/Unternehmensleitbild (Date: April 26th 2016)
  38. 38. The HRBP found two more examples on how the topics identity and vision in agile working organizations may be of influence. During a conference he spoke to the Chief HR manager of Whatever mobile Ltd. (Cortinovis 2015). She had just reported on how the company had changed during over last few years and the role HR had played in this. At Whatever mobile Ltd. the trigger for change was the IT department, because software had to be programmed more efficiently. Introduction of agile methods rapidly influenced all other departments. That resulted in, among other things, teams no longer being organized according to function, but according to value chain (marketing, sales, project management, development, operations). As a consequence, managers (in terms of position) were replaced by leadership. Subsequently, an apparently simple methodical topic (agile programming) had far-reaching implications that influenced even the company’s self-understanding. It revealed that processes, structure and culture cannot be separated from each other. According to this perception, work at Whatever mobile (WM) is currently based on a corporate understanding of how work is understood (WM 3.0 Principles) and a common behavior codex (WM Style: Respect, Fun at Work, Speak up and speak out, Openness, Excellence). At Whatever mobile, the principles of work consist of: ● in team we trust ● fever to deliver ● freedom to act, duty to correct ● thinking value ● sharing leads to caring A quick consideration of these principles reveals high expectations for all players. Employees must act self-reliantly and self-critically, managers must trust employees, and there is an overall need for strong team spirit and corporate goal-orientation. During the transition period, not all participants at
  39. 39. Whatever mobile wanted or were able to join the change towards a new culture and basic principles. The change towards an agile organization also had consequences for HR. Today the focus and therefore basic attitude is on the transformational and strategic design of processes. Administrative duties have significantly declined. Work in HR is guided by agile principles and agile instruments and follows the above described principles. Asked for her own experiences, the HR manager stated the following as her learning experience from agile transformation at whatever mobile: ● The need for communication rises enormously ● Topics get more complex ● HR automatically focusses on organizational development and cultural topics ● A “Safe Harbour” has to be created, which means adhering to the basic principle that mistakes can/should happen and things need to be tried out. The HR manager at Meier GmbH looked at his HRBP and said dryly: "Well, we still have a lot of work to do. If agile transformation has this effect, it is indeed a long way off, but it offers the chance to work significantly more productively and innovatively. I am still not quite sure, whether this is the right way for us. Something that works well in a little ‘garage software firm’ is much more complex in a production company. For us in HR it would mean delegating tasks and responsibilities to the base. That means to the teams and the management.” “There may even be further implications” replied HRBP. “If we look at the last example then HR will no longer exist. Just as at Valve.” Valve is a game producer in Washington which completely dispenses with managers/leaders. The financially independent company was founded in
  40. 40. 1996 and aims to represent “greatness”. Therefore, the employees have all over freedom. Small scale, this means anyone can place their desk anywhere, everyone can decide what they are working on and in which team. On a larger scale it relates to the handling of mistakes, which plays a large role as learning potential, or decisions concerning product rollouts. The logic of this way of working at Valve is formally described in a manual every new employee receives. Everything they need to know is described within it. At Valve there is neither a boss/superior, nor HR. Everything necessary is carried out by the employees themselves. Welcome to Flatland Hierarchy is great for maintaining predictability and repeatability. It simplifies planning and makes it easier to control a large group of people from the top down, which is why military organizations rely on it so heavily. But when you’re an entertainment company that’s spent the last decade going out of its way to recruit the most intelligent, innovative, talented people on Earth, telling them to sit at a desk and do what they’re told obliterates 99 percent of their value. We want innovators, and that means maintaining an environment where they’ll flourish. That’s why Valve is flat. It’s our shorthand way of saying that we don’t have any management, and nobody “reports to” anybody else. We do have a founder/president, but even he isn’t your manager. This company is yours to steer— toward opportunities and away from risks. You have the power to green-light projects. You have the power to ship products. Excerpt from: Valve Handbook for New Employees: http://www.valvesoftware.com/company/Valve_Handbook_LowRes. pdf
  41. 41. Figure 7-7: Valve Handbook on the question, how to work without a manager. Source: http://www.valvesoftware.com/company/Valve_Handbook_LowRes.pdf The HR managers at Meier GmbH find it thrilling to see how an organization like Valve works. In particular, it shows there may be a far lesser need for rules and regulations than expected and that normally exist. Although they agree that it would not be suitable for their own company for the time being, a greater focus on self-reliability and initiative are an essential part of any agile organization.
  42. 42. Modern HR Management for Agile Organizations One benefit from the current discussion on agile methods is the opportunity for organizations to critically revise their current HR systems. Comp.& Ben., Objective Agreements, budgeting, and other systems are common to many companies, but will not necessarily work in a more agile setting. Often, these systems have existed for many years and have been developed in an almost “evolutionary” way, but have seldom undergone critical revision. They may even have a tendency to limit the organization, therefore getting rid of these limitations may be a good trigger for a new organizational design. Example 1: In a Tayloristic working system all resources should be close to a 100% work load. Experience from project management (even the “old” waterfall systems) showed, that this is not an ideal way to view resources. Any kind of unexpected or changing matter will cause problems if resources do not have the capacity to react. Example 2: In agile methods like Scrum, sprint is a core logic. This can only work, if resources are able to focus on one task and take the next one from the backlog when ready to do so. Looking at HR systems the two HR managers ask themselves which instruments have to be addressed within HR. They create a list showing all topics already discussed with the different departments and even at this stage, the initial version contains many topics: Agreement of objective: Agreeing objectives with all employees in a yearly process does not appear to be meaningful in an agile environment. Additionally, it will become increasingly difficult for the line manager to see and influence the process to reach the agreed objectives.
  43. 43. Individual bonus payments: The logic of an individual bonus, i.e. to value individual performance, does not fit into an agile world, where team performance is key and individual contributions are not even possible to measure. Individual bonuses violate the mind-set of peer support. Personal development has to be organized on an individual level and instruments and formats have to be more flexible to address short-term or very specific learning needs. Knowledge Management (KM): The basic question of KM “How do we learn in this organization?” becomes more relevant in an agile organization. Agile working teams create a lot of new knowledge and experience and this new knowledge has to be documented, and analyzed for its value to other teams, and if meaningful then taught to others. Here again individual teams are the basis for the new system. Organizational Structure: An analysis has to be made as to whether the existing org chart and the therein defined roles and responsibilities still make sense in an agile organization. It may be necessary to create new structures more oriented to the work flow as shown in the Spotify example. Liquid Workforce: In a more agile and faster moving world, competencies and manpower are more difficult to plan. Therefore, all companies will increase the number and type of freelancers, Interim Managers and other flexible workforce. Due to a number of regulations, partly in direct conflict with the company´s interests (“Scheinselbständigkeit”, social insurance etc.) plus the increasing need to involve freelancers more heavily in all learning and knowledge processes, a more structured approach needs to be defined. IT for HR: The actual IT system at Meier is designed to support managers in their role as department heads. In an agile future, the self-organization of teams has to be covered too.
  44. 44. Performance Management: To work in an agile environment, performance management has to be redesigned from a manager-to-employee-related system into a 360° system. Feedback from peers and customers (internal and external) becomes more relevant and part of all performance matters. Career models: The current career model focuses on managerial and project related careers. In an agile system, career has to be redefined and a modified career system established. These topics alone will create a lot of work for HR and have significant potential for conflicts. They therefore look at two topics in further detail. HR Topic 1: Agreeing objectives and Performance Measurement Many companies run a system of yearly objective agreements and objective achievement related performance systems, which often fuel a bonus system. In a world trying to create interdependency of all employees and the organization this more or less works. In an agile world these common systems create several conflicts of interests. The HR manager contacts the department heads of IT and Project Management and asks for their vision of an agile future. They agree on the following changes that are needed for the transformation to an agile organization: Discard individual bonus payments, since agile work is team related and individual interests are seen as a hindrance for good cooperation. If a team member actively supports others it invests time, resources etc. in the success of someone else and increasing this person´s bonus at the expense of their own bonus.
  45. 45. Objective and target agreements on a yearly basis should be discarded too. Short working cycles and the high flexibility of agile teams do not allow the necessary planning and monitoring. Performance management should be based on a 360° approach involving peers in the team and other stakeholders. The ideal would be a mind-set of speedy and precise feedback given to everyone by everyone. For Recruitment, just a few changes are expected, since this has always had to be flexible and customer oriented. For the future, the profile of an ideal candidate may change, asking for more adaptability to change, cooperation and communication skills. Technical skills are expected to become less relevant, since they change anyway at increasing speed. In the future, hiring will be less related to job descriptions, and more to project related skill-sets plus a set of attitudes that fit into the environment and teams. More decision- making power will be given to those teams affected by the hiring and formal aspects will be less relevant. Personal and leadership development will have to change with respect to basic principles. In fact, most learning is carried out in formal learning settings like seminars. In this learning environment, individual needs are hard to define and serve and the development of competencies close to impossible. This topic needs to be discussed later (see below), as learning is a major aspect in agile organizations and has to be organized properly. Regarding the idea of skipping yearly objective setting cycles, Meier GmbH is in good company. More and more companies are changing their systems, including General Electric. GE was a beacon for structured and highly proficient objective setting, but recently did away with this system (Quartz 2016). Its reasons were: shorter business cycles (in relation to the yearly based objective settings) and the high level of pressure felt by employees to reach these objectives. This made it difficult to be flexible and innovative.
  46. 46. HR Topic 2: Making Personal Development more agile During a discussion preparing the initial meeting with the workers council, the HR Manager recalls his last visit to the IT department. He had wanted to get a first-hand impression of the way agile methods are used and the resulting consequences. He addressed learning and training, a topic which is regulated, and therefore to be discussed with the workers council. He was quite surprised to hear that none of the team members had participated in any of the trainings offered at Meier GmbH. On the other hand, the need for learning and training was never higher than at this time of change and rapid technical development. The department head explained that existing formats do not satisfy needs. Traditional training is based on expert knowledge shared in standardized settings. This is both slow and an extremely trainer-dependent setting. So speed and practical orientation are low, in comparison to needs. In an agile world, employees and managers are permanently forced to monitor their own skill-set in relation to the changing business environment. If learning needs are identified, suitable measures have to be defined, and if possible, incorporated into daily work or simulation settings close to the working environment. The relevance of trainers will decrease and the relevance of peer-group learning will increase. Hearing this forecast, the HR Manager was concerned, because this was an unmistakable wake-up call from his in-house-customer. HR would have to redefine learning structures and processes and build a new logic of learning. One of the key issues would be to let go and hand more responsibility for learning over to individual employees, and empower them to find or define suitable formats for learning. This would mean a different self-conception for the Personal Development experts in his team. The obvious need for change is related to:
  47. 47. Definition of learning needs: To date, the learning needs of an employee are analyzed and defined by the team manager and discussed with the employee. The needs are based on findings with respect to objective achievement and performance assessment. Neither system will work in an agile future. Learning formats: Most learning is organized in seminars and other formal formats. Content and methods are defined and partly certified. Although this approach has already been regarded as quite inefficient for several years, real change has not yet occurred. In the future, there will be a need for learning structures based on collective and peer learning on topics relevant to individuals in their working environment. Prototype building and simulations in particular, have been seen to show a high level of potential. These for example, may be implemented in a laboratory (Lab) setting, i.e. a room (or several) equipped for Design Thinking, use of new technologies, co-working on innovation etc. Content: In the past, the content of learning formats was defined by experts on this topic. This is normally done in formal training settings (see above). In an agile environment, future knowledge is created at much higher speed and in a greater variety, in more places (often in the working teams!). Therefore, a network and community approach is more likely to fulfil the needs of permanent and problem related learning. During the meeting in the IT department, the HR Manager was able to observe some of these trends emerging. Team members had already begun to change their behavior with respect to communication and the use of social media. If a problem occurred, a solution was close to hand on the Internet and Wikipedia, or Youtube or TED Talks were consulted for a solution. Employees did not even consider looking for a training session or similar. At the same time, employees created a great deal of content describing their experience at work (e.g. from retrospectives) and some team members had become experts on topics they had a passion for. They posted blogs or short web videos and
  48. 48. formed communities of interest. This internally created content was considered more relevant and of higher quality. The IT department head revealed his concern that tunnel vision of sorts could be a mid-term consequence if regular refreshment from external sources was incorporated into the communities. One side effect is, that formal aspects such as functions or work experience (in years) become more and more irrelevant. Passion for a topic was shown to be the key driver for an individual´s relevance and reputation as an expert. The HR manager had already observed similar changes himself. He increasingly watched, TED Talks (www.ted.com) and other online media, with a clear shift in media usage as well as quality criteria occurring. In a digital world, where all information exists, and user-friendly formats like Wikipedia, TED, and blogs are available all the time, people expect information to be easy to find and presented attractively. Lectures and long Powerpoint presentations are simply not accepted any more. For corporate communications, employer branding and all other forms of communication, there is a significant need to adapt to this change and find new and attractive ways of communicating. For employee and leadership development, this is also true, and there should be more focus on the advantages of new media and digital formats. In relation to this, there is a TED talk by Simon Sinek: "How great leaders inspire action“. He demonstrates the importance of telling the story behind the story and inspiring people. They want to understand the meaning behind business activities and this is a key challenge, but also opportunity for managers. Offering purpose is a key skill of any leader. From an HR point of view, TED Talks and the communication principles behind them, offer a great chance to further develop leadership culture and management skills in an organization. Increased communication competence will increase leadership performance.
  49. 49. Simon Sinek: How great leaders inspire action http://www.ted.com/talks/simon_si nek_how_great_leaders_inspire_a ction Simon Sinek has a simple but powerful model for inspirational leadership all starting with a golden circle and the question "Why?" His examples include Apple, Martin Luther King, and the Wright brothers ... (Filmed at TEDxPugetSound.) This talk, as well as many others, shows the potential of modern communication. If better communication increases managerial effectiveness, how will the change in communication and behavior influence the meeting culture, sales performance or other key areas for excellent communication? For personal and leadership development or knowledge management, new formats like webvideos or TED-style conferences can easily be used and some of the topics already discussed can also use social media logic. Performance measurement by “Likes” and comments work well on the Internet, so why should they not also work in a corporate environment?
  50. 50. Summary and Outlook All discussions on agile methods and the consequences of their use, have shown a massive need for clarification and for redesigning the organization. Clarification starts with a definition of agile. There are different concepts of agile in different departments and at different managerial levels, and the reasons for becoming more agile may be vary. The already agile working departments see agile more as a method for organizing work, whereas HR and the management team see agile more as an organization’s ability to adapt to change. Step number one in any agile transition or transformation therefore, must be to define the purpose, definitions and scope of any activities. The logic of agile work affects three levels: Individuals, Team and Organization. HR is an excellent example of how these three levels and the effects of agile are interwoven. Any change in one small aspect will cause several side-effects, which then have to be dealt with. An individual bonus for example, is part of an organization wide salary scheme, which is agreed on with the workers council and so on. For HR, this is a big challenge, since this complexity means every change will take time to be defined, negotiated and implemented. Long processes on the other hand, are in direct conflict with one of the key benefits of agile work: Speed. Only time will tell how this conflict of interest can be managed properly. For Agile@Meier, the two HR Managers formulate the following theses: ● The starting point for any agile transformation is an analysis of the inventory of all systems, processes and instruments currently in place. Only then, can the relevant topics, as well as any measures, be defined. ● To transform HR into an agile (or at least agile compatible) department, agile methods can, and should be used. Experiments, prototypes and simulations are helpful approaches, quite uncommon in HR until now. Since every company will have to find its own way
  51. 51. and benchmarks, standards etc. do not work properly any more, this is the best way to create suitable and working results. ● The first step to an agile organization is recognizing that agile is primarily a mind-set and set of values. Agile culture and principles have to become part of the company´s DNA and find its way into methods, processes and instruments. ● Complex systems cannot be managed in the classical way. The only way to “manage” a complex system is by continuous observation, feedback, learning and improvement. Using iterations and experimental approaches are possibly the most promising ways to get ahead. Success in agile transformation depends on several factors: ● Ability to analyze context and options to act ● Let go: Processes, power, … skip what is not working anymore and change what needs to be changed ● Tolerance: different approaches may lead to the best results and may be tried, even in parallel ● Endurance: There will be a lot of problems, mishaps and “failure”. Stand up and move on! ● Experiment: There will be no plan and no one and only way. Experiments are the best way to find proper solutions and save energy. ● Learn, learn, learn For HR, this will mean redefining its future role. Depending on the company´s strategy and the respective context, there is ample room to define what to be. An administrative specialist can be as helpful as a business driver and enabler of agile teams and the whole organization. The future will tell. Agile!
  52. 52. Literature Cortinovis S (2015) Veränderung als Normalzustand – Agile Praxis aus Personalmanagement-Sicht, Vortrag auf der Zukunft Personal 2015 DGfP - Deutsche Gesellschaft für Personalführung (2010) DGfP Langzeitstudie Professionelles Personalmanagement, http://static.dgfp.de/assets/publikationen/2011/03/dgfp-langzeitstudie- professionelles-personalmanagement-pix-2010- 1342/dgfplangzeitstudiepix2010.pdf Edelkraut F (2014) Der letzte räumt die Erde auf! Wie sich „agil“ auf die Personalabteilung auswirkt. Vortrag auf der Manage Agile 2014, http://de.slideshare.net/fredel00/hr-in-agilen-umgebungen Edelkraut F, Eickmann M (1/2015) Agiles Management – jetzt wird es ernst! Wirtschaftsinformatik & Management Edelkraut F (1/2016) Personalmanagement in der agilen Organisation; Management Innovation Camp 2016, http://managementinnovation.camp/ Haas A (2015) Führung in einer Experience Driven Company, Beitrag auf dem DGfP-Lab 2015. Interview und Hintergründe: Wilkat B., Haas A.: Human Centred Design bei der Swisscom, http://www.the-new-worker.com/human- centred-design-swisscom/ Haufe (2015) Whitepaper: Agile Unternehmen – Das Betriebssystem für die Arbeitswelt der Zukunft, http://www.haufe.de/personal/download-agile- unternehmen-whitepaper_48_319054.html Haufe Umantis (2015) http://presse.haufe.de/pressemitteilungen/detail/article/ceo-marc-stoffel- erneut-demokratisch-gewaehlt/
  53. 53. Komus et. al. (2014) Status Quo Agile - Zweite Studie zu Verbreitung und Nutzen agiler Methoden, http://www.status-quo-agile.de/ Klumpp B, Guillium L (2012) Betriebsverfassungsgesetz und Scrum – Wie passt das zusammen? Vortrag auf der Deutsche Scrum 2012, http://deutschescrum.de/sites/deutschescrum.de/files/article/Deutsche%20Scr um%202012_Betriebsverfassungsgesetz%20und%20Scrum.pdf Kniberg I, Ivarsson A (2012) Scaling Agile @ Spotify with Tribes, Squads, Chapters & Guilds, http://de.slideshare.net/xiaofengshuwu/scalingagilespotify PMI (2015) Capturing the value of project management through organizational agility http://www.pmi.org/~/media/PDF/learning/translations/2015/capture-value- organizational-agility.ashx Quartz (2016) http://qz.com/428813/ge-performance-review-strategy-shift/ Stoffel M, Grabmeier S (2015) Mitarbeiterzentriertes Betriebssystem Keynote auf dem Talent Management Gipfel, https://www.haufe.com/vision/mitarbeiterzentriertes-betriebssystem/

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