Self-managing organisations: is HR ready for the trend?

There’s a quote from Darwin, “it’s not the strongest or the fastest of species that survives, but it’s the most adaptable to change.” Organisations need to adapt to change to survive in this competitive environment. As such, engagement is no longer as top of mind as much as new working structures such as Holacracy — with Zappos the largest company to lead the trend. In fact, even Medium decided to try Holacracy for a while. It is evident that not all companies are ready to adapt to the change. There have been a lot of challenges and criticism with the implementation of a new structure of HR and this way of working is so new that we are still awaiting conclusions of the impact on employee or company performance.

And yet, in the Global Human Capital Trends 2016 report conducted by Deloitte, 92% of companies surveyed, stated that they had a problem with their organisation structure and 75% of people said that they were in the midst of redesigning their organisation. Organizations are looking for the agility of bringing teams together around projects instead of matrixed organisations. HR thus needs to evolve to support the development of leadership and help employees bring life around the new culture of working.

We have worked in a heavily matrixed organisation that was structured by product line and by type of customer and it was a struggle as a business partner — it took longer to gain consensus on decisions. As the business grew and got more complex, processes got more rigid and inefficient and it felt like we were always up against a wall.

As such, there is an appeal to the agile, flat, adaptive organisation compared to the current structure of hierarchy. When you think about a normal, traditional, hierarchical workplace, it does make sense why the innovators want to look at new ways of working, similar to a lean start-up. There are experts that suggest this is the wave of the future and we are at the stage of early adoption; drawing a parallel to the book “Crossing the Chasm” by Geoffrey A. Moore. So, companies like Zappos Inc. are considered early adopters of this process.

What exactly are agile teams?

According to the HR Reporter “Agility requires a culture of empowerment where employees have the authority and independence to respond to the needs of customers.” It evolved from scrum or agile software development, and the fast, iterative structure is appealing for organisations that want to create innovative teams. HR nowadays seems to have a reputation of being processors, lagging behind the action, not understanding the dynamics of the business and for being not strategic enough. We even spoke to an HR manager from a large Healthcare Tech industry and he mentioned HR will no longer be a separate department or function in the future as teams become more self-managed. With the seeming irrelevancy, can HR still play an important and vital role in the development of agile teams? What kind of role will HR play in assessing the needs of the business and actively participating in these conversations? We want to help solve this problem.

What are the benefits of being an agile team?

Holacracy’s biggest value according Harvard management professor Ethan Bernstein, “is that it provides a framework for effective conflict resolution: Holacracy replaces that [traditional] structure with a structuring process, at least for particularly frequent kinds of conflicts, to resolve conflicts in a potentially less-hierarchical, more self-organized, and more adaptive fashion.”

Tony Hsieh at Zappos has mentioned that in a growing organisation, he wanted to cultivate a culture of high innovation and resiliency. There is an attraction in the shift from centralized to decentralized, agile, flexible and data driven. How can teams grow to this next level and how can this be faster adopted? Moreover, how can this be adopted in the right way? As the Harvard Business Review article on Zappos’ Holacracy efforts mention, this can be very costly with consultants, tools and training workshops for the teams to learn the new methods and structure. It is a long-term investment. How then can companies who are unsure about the transition to an agile team still act like an agile team without changing their structures? How can we make sure that once they decide to implement an agile team, that they have a higher chance of success? Here’s where we look at the core needs of an agile team.

What are the needs of an agile team?

Deloitte has performed extensive research in this subject matter on agile models of HR and they explain that an agile team needs “collective communication or a digital communication centre”. Additionally, there are other needs such as:

1. Implementing “systems of engagement” not just “systems of record,” i.e., collaboration, information-sharing, project management
2. Creating systems with lots of transparent information, i.e., what are our goals, who is working on what project, who are our experts
3. Creating customer interactions within all groups and functions in the company

To become a successful agile team, and support information flows — it calls for more transparency in social information and interactions. Even if companies are not looking for decentralized structures in their way of working, would it still be valuable to have transparency in information and interactions? For example, the marketing team partners a lot with their own sales team, however for it may be valuable to collaborate with internal marketing teams that sell complementary products. How can companies identify this as a need?

The term “people analytics” combines the need for traditional HR functions, with data analytics and IT. People analytics calls for new insights and tools for managers to make better decisions and adapt to a new generation of working. We have seen companies look for tools that allow them to make faster iterations via transparent information. This is not only in the case of those companies transforming to a more agile way of working but also with companies in traditional structures. However, we still rely on postmortem analysis to see the damage in interaction and communication have caused. Is there a way to be more predictive and preventative so that we track the trends and identify the problems before they occur? It seems like common logic but the way that HR functions right now seems a bit reactive and will benefit to have a closer understanding of how teams function and re-asses the structure. At the end, to know whether you are suitable and ready to change structures or even ready to do so for the company, HR will need a to identify a way to analyze the teams in the first place.

HR needs to be prepared when this conversation arises. It seems that the success of implementing these new structures is not only based on the consultants and tools but on the company culture and mindset. HR needs to start adapting a more intelligent, strategic mindset of understanding teams and searching for more data-driven ways of managing teams. If you are curious about team analytics and what it can do for you to adapt to the future, send us a note below.