Agile HR & People Operations with Fabiola Eyholzer

Fabiola Eyholzer is the CEO Just Leading Solutions, which is dedicated to a 21st century approach to HR. Says Fabiola, “The new currency for competitiveness in an organization is talent, leadership and people.” Topics include the “psychological contract” between an employer and employees, the Douglas Effect, employee retention vs. liberation, and so much more. While many believe the HR is fluffy, Fabiola provides some business motivators for evolving HR practices in today’s organizations.

Hosted by SolutionsIQ’s Leslie Morse at SAFe Summit 2017 in San Antonio, Texas.

Also check out the article based on this podcast “10 Things You Didn’t Know About Agile HR.”

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Read the full transcript

Leslie:  Welcome to another edition of Agile Amped. I’m your host Leslie Morse, and we are podcasting live at the SAFe Summit 2017, in San Antonio, Texas. Today my guest is Fabiola Eyholzer. She is the CEO of Just Leading Solutions, a New York based consultancy that focuses on Lean and Agile people operations, the 21st Century HR approach. She helps enterprises to accelerate their transformations, that focus on Agile by looking at the most crucial asset: their people. And you’ve got a session that was yesterday, right, Fabiola?

Fabiola:  Yes, that’s right.

Leslie:  Excellent. Thank you so much for joining us. I’m interested in digging into this topic, because without people – And I’m so glad that it’s not Resource Management. I feel like when I talk to clients, and I network with people it’s, “No. We’re not resources. We really are people.” So, just even the name Human Resources, sometimes sort of “de-peoplizes” it, by using that word resources in my head. “No. We’re just really people.” So, I’m excited to dig into this, and talk about how the function of HR really changes in enterprises, as we start talking about Agile Transformation.

Fabiola:  It’s great being here. Thanks for having me.

Leslie:  Great. Thank you. So, let’s first just talk about, what’s the real function of HR in organizations? Because, I think, sometimes it’s about protecting – like, you hear things like, “Oh, HR’s here to just protect the company from its people.” That’s not really what HR is here to do. What do you define as the real purpose of HR?

Fabiola:  The purpose of HR has really changed for the past years, where we start to realize that the new currency for competitiveness in an organization is talent, leadership, and your people. That means that we have to change the dialogue about people. We have to connect with people in a completely different way. That’s where this new term, “People Operations” comes in, really focus on people as the essence. And it’s not just a name change, it’s a game change for organizations to embrace a different way of connecting with people, and creating those inspiring, engaging, and fun places of work.

The new currency for competitiveness in an organization is talent, leadership, and your people.

Leslie:  Who wouldn’t want to work at a place that makes you feel that way? What are some of the things that you see companies starting to really change, to create more of that sort of engaging employee experience, that people are really excited about?

Fabiola:  For most organizations, it’s really starting to realize that they have to follow through. So, people have been on the mission statements, and on all the core values of organizations for quite some time. But, when we look at the realities of our processes, and interactions with people, we realize that we’re not following through. So, we are telling people that we trust them with huge decisions of major endeavors, but then we micro-manage people, which is a discrepancy – so, we have to follow through and organizations start to realize that this talent contract has completely changed. That we have to align the things that we are doing, with that new talent contract.

Leslie:  What’s with, I read an article recently about the idea of psychological contracts between people and employers, where when we talk about mission, and we talk about purpose, and empowering people, and not micro-managing, and then all the sudden we encounter processes, maybe in HR or some other area. That it’s like, “Wait a minute. What you’re actually asking me to do, and how you’re interacting with me. It’s not really changing my employment contract with you, but it’s violating the psychological contract about how feel, in expectation around being treated and valued.” Is that part of the conversation as well?

Fabiola:  Absolutely. It is, and it actually goes back to something that McGregor focused on in the 1960s. Where he said, “Okay, we have two types of managers. Theory X managers, Theory Y managers.” And the theory says that if you are a type X manager you believe that people need to be forced to work. They need to be micro-managed. They need to be controlled, and they need to be told constantly what to do, and how to do it, otherwise they’re not going to move. Whereas theory Y says, “No. We believe that people are intrinsically motivated. They want to be part of a great team. They want to do their best job.” And that’s what Agile people are all about. They want to be part of a winning team. They want to collaborate. They want to create value. And they want to have a meaningful job. And we have to embrace that. Whereas, when it comes to our HR practices, it’s all about theory X. It’s all about, we call it “The Douglas Effect”.

Leslie:  Okay.

Fabiola:  So, you have to imagine, Douglas is the worst employee that you can imagine. It’s someone that embodies all those bad traits that we sometimes see in people. It’s your thief, your crook, your tattle-tale, your slacker.

Leslie:  Yep.

Fabiola:  We create all those policies to keep Douglas in check.

Leslie:  But not everybody’s Douglas.

Fabiola:  Exactly. Most people are not, and we don’t create policies, and practices, and interactions that focus on the great of people, and the strength of people. We have to go back to that. It’s not about penalizing people. It’s not about putting people into boxes. It’s about liberating people, and tapping into all that potential that we have in organizations. And that’s what I love about Agile, we’re bringing all those people together, and we help liberating them, and letting them do their best job. Getting out of their way, so they can thrive.

Leslie:  That’s true, but a lot of these changes sound like good things organizations should do, whether or not they’re going through an Agile transformation. So, are you seeing companies really starting to embrace this, even outside of sort of the Agile movement?

Fabiola:  Absolutely.

Leslie:  Okay.

Fabiola:  Absolutely, because if you look at all the challenges that HR is facing, there are things like we, for the first time ever, we have five generations in the work force. We’ve completely different challenges than we used to have. And the world is so fast paced. 7 in 10 organizations find it difficult to actually hire people, find people. And 87% of people worldwide are disengaged, disillusioned, and dissatisfied at work. That costs our economy $500 billion a year, but still organizations believe that Human Resources is the soft, fluffy stuff. But this is hardcore business.

87% of people worldwide are disengaged, disillusioned, and dissatisfied at work. That costs our economy $500 billion a year, but still organizations believe that Human Resources is the soft, fluffy stuff. But this is hardcore business.

Leslie:  Yes!

Fabiola:  If we have an engaged our workforce, organizations have a 9% higher shareholder value. They double their net annual income, just by having an engaged workforce. So, why wouldn’t we tap into that? And there is another part as well. We talk about the “age of disruption”, and how things are moving fast, and any industry is targeted by that. If you think about 4-D printing, that is going to revolutionize the construction business. Well, if the construction business is becoming a modern, IT organization, I think no other industry is safe either.

Leslie:  Exactly.

Fabiola:  If you look at the HR trend for this year, it’s consumerization of HR. So, how can we create a consumer experience in the HR sense, and employee experience for our talents? So, how can we in HR, deliver something great for people to tap into that engagement, or that potential, and passion that people have? It’s not related to Agile, in the sense, it’s any organization faces those challenges, but organizations that have an Agile way of working. They work in a modern way. They work in a way that is fit to thrive in such a disruptive and fast-paced world. And it helps them embrace that new world, and be successful.

Leslie:  Yes. So, for these companies that are already embracing Agile, it kind of increases the sense of urgency probably, for HR groups to really re-think the way they’re working. So, what are some of the real tactical changes that you’re working with HR teams to make, that enables them to really support the Agile transformations that are going on in their companies?

Fabiola:  It starts by having HR understand the power of Agile, and understand the Agile manifesto for HR, and see how all those values and principles translate into HR. I can give you some examples.

Leslie:  Great.

Fabiola:  We talk about empowering people, when it comes to the HR, and Agile is doing a great job of empowering people. Letting people make decision. Letting them thrive on mastery, autonomy, and purpose. But, we have to translate that into an HR context, and say, “Okay, if you empower people when it comes to their work, we consequently have to empower them when it comes to their career.”

So, it’s not employees sitting back and saying, “Okay, dear HR people, what can you do for me? How are you going to develop me?” No, it’s people, it’s employees who are in the driver’s seat. Of course, HR has to support them, and provide the platform, and connect with people. But you, as an employee, make the decision: “How do I want to evolve? How do I want to learn? How do I want to grow? And what’s meaningful growth? What’s a meaningful career set for me?”

Leslie:  Right. So, I love that you brought up autonomy, mastery, and purpose. Any time that I’m working with clients, and I’m doing introductory training, I tend to play the “Dan Pink” sort of animated 10-minute video. And he goes through all of that. I don’t think there’s been a single class, that I’ve been facilitating, or coaching workshop, where we’ve watched that video. And not someone brings up the whole idea of, “Take the issue of money off the table.” Compensation’s a big piece of employee happiness. And it’s, if you’ve got a disgruntled workforce, that they feel like the issue of money is still on the table. How does that sort of complexity of the budget impacts of engaging workers in different ways, to really unlock that creative potential of knowledge workers?

Fabiola:  We always believe that people just run on money. Goes back to the theory X –

Leslie:  Yep, yep.

Fabiola:  That we touched on beforehand. But, people are intrinsically motivated, but companies cannot complain about people talking about money all the time, because we keep throwing money at people.

Leslie:  Yep.

Fabiola:  We give them money if they do something great. We try to penalize them with money, if they don’t. We ask them to recommend our organization, and throw money at them. So, how can we complain about it, if we as an organization keep throwing money at problems that we perceive? And 87% of organizations believe that people leave for money, but it’s actually only 12%.

Leslie:  Well, isn’t the number one reason people leave is because of their relationship with their initial supervisor?

Fabiola:  Absolutely.

Leslie:  Okay.

Fabiola:  Absolutely. We always say, “People join companies, but they leave managers.”

Leslie:  Yep.

Fabiola:  Two-thirds of people would actually take a new manager, a new boss, over a salary increase.

Leslie:  Really?

Fabiola:  That should tell you that the real problem is not money.

Leslie:  Yeah.

Fabiola:  It’s important to understand that behavior follows compensation. If we incentivize individual heroism, we’re never going to get a team approach, and the one-team philosophy. But, then we can’t complain about it, if we incentivize individuals.

Behavior follows compensation. If we incentivize individual heroism, we’re never going to get a team approach, and the one-team philosophy.

Leslie:  Yep.

Fabiola:  So, we have to make sure that we understand how we utilize money, and why we believe that people thrive on money. Because money, in so many organizations, is the only way they’re going to get feedback, as an employee.

Leslie:  Yep, that’s right. The annual review cycle, and annual salary adjustments, and all of those sort of things. It’s all sort of wrapped up in together.

Fabiola:  Exactly.

Leslie:  So, you brought up sort of measuring performance, or incentives, and things like that. HR performance reviews, which still exist in many, many places, do incentivize or measure an individual’s performance. But, we know, in an Agile world, the best individuals are really good team players. So, how have you worked with teams to sort of shift how we do performance metrics? To really measure and look at team performance, or are they just getting rid of them completely?

Fabiola:  They are getting rid of them completely.

Leslie:  Okay.

Fabiola:  So, that’s the first answer. The other answer is that we have to look at performance management systems, why they got so big, and why they are such a central piece in the HR world.

Leslie:  Does this go back to Douglas?

Fabiola:  It does, as well. A little bit. But, of course, when performance management started out, it started out with a great goal. To say, “Okay, we have our vision. We have our goals that we want to achieve, as an organization. How do we make sure that everyone in the organization works towards that common goal?” So, something that Agile teams are very familiar with.

Leslie:  Yes.

Fabiola:  So, how do we communicate our goals? How do we make sure that everyone knows why we are doing stuff? Where we want to be? What values we want to create for our customers? Then it started out, to become that humongous HR tool. So, all of a sudden, performance management and employee appraisals are there to decide who gets a salary increase, who gets a promotion, and who’s our top talent in the organization, succession planning. All that stuff is all of a sudden tied in, and the system is just so watered down, that it does not fulfill any purpose anymore.

And, of course, we live in a fast-paced world. If something goes wrong, we want to address that immediately. We don’t want to wait until the end of the year to address that might have happened in January. And we also want to have the option to course correct, which we don’t have today, if we wait until the end of the year. And, of course it’s sometimes comfortable for managers to hide behind the performance management process, instead of talking to people. And say, “Hey, I think we have an issue here. Let’s talk about it. Let’s do something about it.”

Leslie:  Yeah. In the same way we ask Agile teams to have a retrospective at the end of every sprint, if they’re doing Scrum, right? Fast speed, that’s super important.

Fabiola:  Exactly. Exactly, and another piece of performance management is the whole learning, and development. So, of course, we need to know where our talents are in the organization. But, I believe, that anyone can be a talent, if they are in the right setting, if they are paired with the right people. So, we have to find that right fit. Then we have to provide all those learning opportunities, and that’s what’s so great about Agile. Agile ways of working do not differentiate between work and learning. Learning is work, and work is learning. How can we utilize things like spikes and IP sprints to actually boost knowledge, and share knowledge in the organization, and help people grow and learn?

Leslie:  Yeah. It’s that idea of the learning culture.

Fabiola:  Absolutely.

Leslie:  Yeah. And the best Agile organization’s just a part of that DNA. So, what are some of the other tactical things that companies are shifting in order to help set up for success in HR? You’ve hit on a couple, but are there any others that are worth mentioning?

Fabiola:  So, the biggest one is changing the dialogue.

Leslie:  Okay.

Fabiola:  Changing the way we communicate. So, instead of asking manager’s to rate someone, we want to know, “What are your plans for that person? How do you want to develop that person?” And also, “If that person comes up to you today, and says, ‘I’m quitting,’ would we try to hold on? And if yes, what would we need to offer that person, for them to be happy again, and stay with the organization.”

Leslie:  Yeah.

Fabiola:  That gives you a valuable insight, and it lets you course correct, or guide the whole dialogue into the right direction. We have to focus on the strength of people. We are good at finding weaknesses in others, and pinpointing weaknesses. But, we have to thrive on the strength, and build the dialogue on a positive note, and on strength.

Leslie:  That’s interesting that you bring up that idea of sort of proactive planning, of what if the person came and quit. Because, it’s such kind of a slap in the face, to be like, “Oh, I’m quitting now. And now you’re going to be like, ‘Oh, well, here: let me give you this and stay.’ If you thought I really deserved that, why didn’t you already do this for me?” Like, in change now. You know what I’m saying?

Fabiola:  Absolutely.

Leslie:  That creates tension.

Fabiola:  Absolutely. It creates tension, but the bigger question is, why are people afraid to come up and say, “Hey, listen. I’m happy where I’m at now, but I feel ready to move on in six months and take on more responsibility, or maybe try out to work in a completely different field.” We don’t have that culture of trust in our organizations, and culture of open communication. That’s why we need career coaches, talent scouts, and workforce planners in our HR teams to connect with people, and find out what motivates them, what drives them. And we have to change our perception of career. Career’s no longer climbing a ladder, and doing more, and more. For some people, career is going into a completely different field of expertise. For other people, it’s digging into those T skills, becoming the biggest expert ever, in a specific field. And that has to be okay, as well.

Leslie:  Yeah.

Fabiola:  In HR, we talk a lot about retention, but what does retention mean? It means shackling people. It means holding people back. But, we want to liberate people. So, we want to thrive on the success of people. And if someone wants to move on, and we don’t have the opportunities in our organization, help them. Help them move on. Stay in contact.

In HR, we talk a lot about retention, but what does retention mean? It means shackling people. It means holding people back. But, we want to liberate people.

Leslie:  Or else they’re just going to become disengaged.

Fabiola:  Exactly.

Leslie:  Right. Then – I’m guessing and this is just sort of something of a, it’s a hypothesis – that much about people’s careers have changed, right? It used to be that, “Oh, you started in this one job, and you stayed in that job for your entire career.” I think about my mother, and being a school teacher, or my father and being a chef. That’s just what they’ve always done. My mom even at the same school. But, it’s almost more normal for people to do a couple years here, and a couple years there. And, if you can treat people the right way, so that they continue to be a brand ambassador of yours. HR’s kind of some of the first people you deal with in recruiting, and the last people you deal with if you’re leaving. But, why can’t [it be like], “It’s okay to come back.” And, if you treat people well, then they’ll continue to be that brand ambassador, and actually help you achieve business objectives long after they’re employed there.

Fabiola:  Absolutely agree, and I know so many cases of people who actually came back. So, they went on. They moved on. They went to a different company, but then they came back, and of course, they’re going to send people your way as well. Because, they are going to be your brand ambassadors, as you were correctly saying. They going to create that brand that you desperately need in order to get great people.

Leslie:  Excellent. I think about how much better someone’s life is overall when you’re happy at work, because you don’t take that baggage home, and how creating those experiences is – it’s good to remind everybody of the importance of that. We really focus sort of on how HR changes to create more engaging experiences, especially when we’ve got Agile transformations going on. But, what about actually, the application of Agile principles and practices to the way HR does their work. Because, that’s the difference between sort of Agile for HR, and HR for Agile.

Fabiola:  I absolutely agree with that. I believe it’s a key piece to the success of bringing Agility to HR, because how can you deliver great value to the Agile organization, to the Agile teams, if you don’t get Agile? And Agile is not something easy to get. You read the words like “collaboration”, and “trust”, and “empowerment”. You understand the words, but to actually fully understand the whole concept behind it, you need to experience Agile. You need to live and breathe Agile. That’s why I feel it’s so important for HR teams to be organized, and interdisciplinary team to iterate, to connect with customers, and live and breathe Agile. Because, then they get Agile, and they can support the Agile organization.

Leslie:  Are there any tips that you can sort of offer for HR teams about quick ways to sort of start adopting Agile practices into the way they do their work?

Fabiola:  The best way is really to have a kickstarter week.

Leslie:  Okay.

Fabiola:  And really get into that flow. We always organize it along an Agile practice. We usually use Scrum, because it’s great to do it on the smaller team level. And really let them experience the power of Agile. Within a week, they have the language, they have the understanding, and the energy and enthusiasm to go on, and change the way that they are co-creating value, how they connect with people. Then, of course, they face all of the challenges that you have, by adopting Agile. Sometimes it’s up. Sometimes it’s down. And it’s just a case of sticking with it, we can help them guide through the whole process. We have so many great, amazing Agile coaches out there, who can help with that transition.

But then, of course, HR faces a huge challenge that we don’t see in other disciplines, or at least not to that extent – they also have to deliver Agile values. That’s what you mentioned before, with your HR for Agile piece. So, whatever they go out there. New salary assessments, the way they recruit, the way they offer careers, the way they kick-start learning, it all has to be done in line with Agile principles and values. And that’s a huge challenge. It’s not easy to translate a world that we’ve known so well, and that we always believed worked, into completely different ways and say, “Okay, we trust people to make the right decisions.” We have to get away from certain practices, and certain regulations, and documentation, and just trust in people, and let the ecosystem work. It’s not easy. It takes a lot of courage to do that, but companies who actually go that way, they thrive. And they don’t want to go back.

Leslie:  I think that’s great. I do want to kind of press on one thing that I think about, is I think about HR kind of adopting Agile practices, and the idea of visualizing work, but how sort of protective and secretive some of the HR topics sort of are. Like you can’t just, sort of have a big Scrum board on a wall, that’s got all this HR stuff going on with it. And you know, “We’ve got this person going on this thing here, and that thing there, and all these sort of things.” So, [what] are some of those practical ways that they overcome some of that kind of [feeling that], “We can’t really visualize all the work, because we need to keep things, some stuff private.”

Fabiola:  In the Agile Manifesto for HR we say, “Transparency over necessary confidentiality.”

Leslie:  Okay.

Fabiola:  Of course, there are information that is confidential. It has to do with all people related personal data. But, not that many things are so confidential that we can’t offer that.

Leslie:  Okay.

Fabiola:  So, if we plan to do a new performance management system, of course we need to communicate that, and it’s okay in the Agile world to say, “Okay. We don’t know what it’s going to look like down the road, but that’s how we want to approach it. That’s why we believe that we need to pivot, and change the way we are doing things. That’s how we are going to invite you, as an employee, into the discussion, and start co-creating that, and co-iterating,” And people are fine with that. People actually like that. So, we don’t need to be confidential about things like that.

Leslie:  I think that’s great. That idea of co-creation, when it comes to HR, because I wouldn’t have even thought of that. “Don’t do to us. Make us part of the change, and part of that journey.”

Fabiola:  Exactly, exactly.

Leslie:  I think that’s really important.

Fabiola:  In HR, we have a phrase, “The plague of the month.” Because, we’re really great at creating new processes and tools, and forcing them upon people. And we have to change that.

Leslie:  Yes.

Fabiola:  And definitely go into co-creating.

Leslie:  Absolutely. That reminds me of one of the things, when I work with teams on retrospectives. It can get really additive, very fast. “Oh, and we need to do this, and we need to do this. And we need to do this.” But, it’s like, “When’s the last time you stopped doing something in order to be better?” Because, keep adding weight, and process, and more to it, isn’t always the best thing to do.

Fabiola:  Exactly. And those that just saying, “Oh, we tried this. It didn’t work.” Well, “Okay. What did you learn from that trial? How did you pivot? How did you change? How did you make it better?”

Leslie:  And, “Did you try it long enough to really see if it works?”

Fabiola:  Exactly.

Leslie:  Because, if you tried it for two weeks, and it still feels hard, well yeah. You’re kind of still in the J-curve. Yeah, when you try new things, sometimes it does get a little worse, before it gets better. And that’s just sort of the natural part of the process.

Fabiola:  Exactly.

Leslie:  Yeah. So, if someone wants to really start learning more about this, what are some good resources, or places online, or books that people could pick up if they want to really start learning about this sort of, as you call it, “21st century people operations,” right?

Fabiola:  So, you can go [to] agilehr.org. We have the Agile Manifesto is up there. There are links to different blogs, and books, and stuff that can help you learn. You can contact me, or any other colleague, that is in the Agile HR space. And just start the dialogue, because we are always open to communicate, and share our experience, and our knowledge.

Leslie:  Excellent. And we are on day two of the Summit now. So, what has been sort of your favorite moment, or is there something big that you’re still looking forward to, before everything wraps up today?

Fabiola:  So, I really loved seeing Em Campbell-Pretty again, and to have her talk about her “Tribal Unity” book, because I use a lot of exercises with HR teams like the Product Box and other stuff she’s doing. It’s really creating that momentum in team. So, I really enjoyed listening to her, again. I’m looking forward to all the case studies, and lightning talks that are coming up today.

Leslie:  Excellent, excellent. Well, listen, Fabiola – thank you so much for spending time with us today. I really appreciate it. It’s an important topic for us to dig into, and make sure that we’re making this part of our overall transformation approach.

Fabiola:  It was a pleasure being here, thanks.

Leslie:  Excellent. And this wraps up our latest episode of Agile Amped. If you’ve enjoyed this episode, we appreciate you taking just a couple minutes to onto iTunes, and rate and review it. And if you want to get notifications, and see all of the content that we’ve got available, just visit agileamped.com.