Many corporate practitioners and HR consultants talk about being more strategic, but then turn around and focus on incremental improvements to strategies, models and practices decades old. When most, if not all, of the practices that form the foundation of the typical HR function today were conceived, times were different. Economic cycles have become more volatile, the nature of work itself has shifted to be more knowledge-oriented, and product life cycles have and continue to shrink. The strategies and approaches to talent management that worked when conditions didn’t change so quickly no longer align with the realities of today.
New strategies and approaches that fundamentally alter how we organize work, resource the organization, and compensate for productivity are needed.
Those new strategies are often referred to as agile strategies because they enable the organizations developing/adopting them to be extremely flexible and adaptable to volatile conditions.
The Need for Agility
I first learned about the need for agility in talent management when a senior manager at Agilent Technologies asked me how our talent management strategy would shift as a result of a competitor opening a 5,000-employee facility directly across the street from ours. Obviously, such an act would encourage an uptick in attrition, but given the level of scarcity for the type of people we employed, it would also affect compensation, recruiting, development, and virtually every other aspect of managing people.
Like many organizations, all of our core processes were pegged to either annual or multi-year cycles, rigid structures and policies, limited agility, and staff had become accustomed to very predictable and stable workloads. We couldn’t change rapidly and few wanted to even try, despite the fact that our competitor was well skilled at building and operationalizing facilities in months, not years. Building on that realization, my observations over the past 10 years regarding the structure and strategy of HR functions around the world is that agility is no longer a nice-to-have, it’s a must-have.
The Concept of Agility
The concept of agility is well established in other business functions, including supply chain, manufacturing, and crisis management, but not so much in HR. In short, it means:
- Being more than just fast
- Being nimble, flexible, adaptable and responsive
- Being able to shift direction
- Anticipating a range of possible events
- Dealing with multiple fluctuations simultaneously (churn)
- Shifting direction, focus and resources accurately (into the right areas)
If you’re familiar with hunting, a shotgun would be a more agile weapon then a rifle, because it is more capable of hitting moving targets.
Apple: The Benchmark Agility Firm
Perhaps the best example of an agile firm is Apple. If you were a competitor of Apple, you would need an agile strategy just to keep up with its amazing rate of product innovation. Apple started as a computer company focusing on hardware and software (the Mac), then shifted into completely different industries starting with digital entertainment devices (the iPod/iPad) and Smartphones (the iPhone). With each foray into a new market, Apple must add significant talent capability and capacity to its roster, obsoleting older skill sets and leveraging new/existing skills in radically new ways. Skilled workers with tremendous value one month may be utterly useless to the organization months later.
Agile Talent Management Strategy Defined
An agile management strategy is defined as one that responds to environmental changes by rapidly and accurately shifting the direction and focus of talent management efforts and resources in order to increase HR effectiveness, business results, workforce productivity, and innovation.
An agile talent management strategy includes:
1. Forecasting of and planning for a range of likely conditions/events including:
- Economic fluctuations
- Emerging business goals
- Talent competitor actions
- Labor market conditions/attitudes
- Frequent revision of operating plans and budgets
2. Identification of stretch/next practices, i.e. researching how firms that are in growth and innovation mode prepare for each condition/event or accomplish rapid-cost reduction without negatively impacting productivity and innovation.
3. Development of tactical plans including processes and programs that enable all of the following:
- The organization to move faster or expedite product/service delivery (time)
- Improve the quality of the output
- Change the volume of output (productivity)
- Applied innovation
- Aggressive response to competition
- Closer integration of functional interdependencies
- Shift/cut budget … or generate new resources
4. Broader use of contingent labor, because the most powerful agility solution is the widespread use of contingent labor (temporary, contract, service provider), your plan must include the capability of rapidly add skills (capability) and work hours (capacity)to meet nonpermanent needs.
5. If/then pre-testing — you can’t assume that your plan will work, so every plan must be pretested for viability using if-then scenarios.
Examples of Agility Shifts
In Southeast Asia and China where competition for managerial talent is beyond fierce, talent acquisition, development, and reward systems have been forced to radically adapt to market driven cycle times versus annual calendars and multi-year planning processes just to enable retention. Complex processes that once took months to execute (focal review, performance appraisal, etc.) were forced to become cleaner, faster, and less painful so that they can be executed quarterly, and in some markets monthly.
Globally consumer product companies have faced drastic reductions in the typical product lifecycle, forcing internal talent pipelines to allow for faster on-the-job development, greater job mobility, shortened time in tenure, and frequent organizational restructuring.
In greater Europe, where currency fluctuations and labor disputes can cripple manufacturing operations, organizations have had to increase leverage of contingent workers and cross training so that work can be shifted quickly from location to location.
Executing agility is as much of a way of thinking as a business strategy. Rather than developing a single, consistent, enterprise-wide approach, organizations today need talent management solutions that employ multiple channels and approaches to produce a target result because relying on one rigid approach is both ineffective and in many cases inefficient. Talent management leaders need to prepare for a wide range of both positive and negative business scenarios and build staff with mastery level competency in rapid learning and strategic agility.