HR. Everybody knows what that is, right? Human Re…lationships. I bet you wanted to say, “human resources,” because that’s what everybody calls it. Yet, in an Agile context, how we think and talk about human relationships has to change.
In a recent Agile Amped podcast, we had a chance to learn so much about Agile HR from Fabiola Eyholzer. Fabiola is the CEO of Just Leading Solutions, which is dedicated to a 21st century approach to HR. In this podcast, Fabiola provides some business motivators for evolving HR practices in today’s organizations. Here are 10 things you probably didn’t know about Agile HR based on our conversation with Fabiola Eyholzer.
1. Talent, leadership, and people drive competitive advantage.
“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.” Fabiola uses the term “People Operations” to shift the focus, saying, “It’s not just a name change, it’s a game change.” She says organizations need to embrace a different way of creating inspiring, engaging, and fun places to work.
The new currency for competitiveness in an organization is talent, leadership, and your people.
Unfortunately there is a disconnect between what organizations say they value and what they actually do. “When we look at the realities of our processes, and interactions with people, we realize that we’re not following through. We are telling people that we trust them with huge decisions of major endeavors, but then we micro-manage people” and that’s where the discrepancy lies. This creates tension and a sense in workers that not every tradeoff is captured and made transparent in the hiring contract. From the start the employee feels that their first impressions and conversations are merely wooing tactics, especially for knowledge workers who want to work for an organization whose values and practices align with the individual’s own.
2. Stop with the Douglas Effect.
“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.” Many HR policies, Fabiola says, are created with Douglas in mind, and the message is clear: organizations write policies to keep Douglas in check and not to actually benefit the vast majority of people who are not Douglas and don’t have his motivators.
It goes back to something that McGregor focused on in the 1960s, where managers are broken into two types: Theory X and Theory Y. “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, ‘We believe that people are intrinsically motivated. They want to be part of a great team. They want to do their best job.’” And Agile is focused on tapping into this intrinsic motivation in individuals to contribute – “to be part of a winning team… to collaborate… to create value.”
So in effect policies encourage managers to think of all reports as Douglas/Theory X workers. “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 about liberating people, and tapping into all that potential that we have in organizations.”
3. Traditional HR practices are costing us a lot of money.
“For the first time ever, we have five generations in the work force. We have completely different challenges than we used to have. And the world is so fast paced. Seven in ten organizations find it difficult to actually hire 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.
“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.”
4. We have to bring empowerment into an HR context.
“We talk about empowering people when it comes to HR, and Agile is doing a great job of empowering people. Letting people make decisions. 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?”
5. It’s not always about money.
“We always believe that people just run on money… But people are intrinsically motivated.” Yet, Fabiola argues, “companies cannot complain about people talking about money all the time, because we keep throwing money at people. 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%.” It turns out that the number one reason people leave is because of their relationship with their initial supervisor. Or as Fabiola put it, “People join companies, but they leave managers.” She adds, “Two-thirds of people would actually take a new manager, a new boss, over a salary increase. That should tell you that the real problem is not money.”
People join companies, but they leave managers.
6. But when it is, it’s because businesses have made money the only motivator.
“Behavior follows compensation. If we incentivize individual heroism, we’re never going to get a team approach, and the one-team philosophy. 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.” That is, in the annual review cycle, annual salary adjustments are made. Good review, more money.
Performance metrics and the systems that dole them out are part of the problem. When asked what Agile organizations were doing with performance metrics, Fabiola says simply, “They are getting rid of them completely… 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… When performance management started out, it started out with a great goal: How do we make sure that everyone in the organization works towards that common goal? 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?” Unfortunately, the result of this search are the “humongous HR tool” that so many are familiar with. “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.”
If we incentivize individual heroism, we’re never going to get a team approach, and the one-team philosophy.
7. Give people good reason to stay before they find a reason to leave.
Something that Fabiola thinks organizations need to start doing to set HR up for success is “changing the way we communicate.” So, instead of asking managers 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[to them]? And if yes, what would we need to offer that person, for them to be happy again, and stay with the organization. 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.”
Another way to change the dialogue is by realizing that people in today’s economy move around a lot and don’t tend to stay in the same career forever. Agility in HR means being open to a dialogue if someone comes in and says, “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.”
Says Fabiola, “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. 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.”
8. Retention sends the wrong message.
“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. 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… We want to liberate people.
Otherwise, these individuals become disengaged. Often when you support people moving on, they end up coming back! “I know so many cases of people who actually came back… 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… They going to create that brand that you desperately need in order to get great people.”
9. HR in Agile organizations must deliver Agile values.
“HR faces a huge challenge that we don’t see in other disciplines: they also have to deliver Agile values… 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.”
One value that may be hard for HR is confidentiality, but Fabiola is prepared for this concern. “In the Agile Manifesto for HR we say, “Transparency over necessary confidentiality. 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…
Another way to bring an Agile mindset to HR is encouraging employees to co-create their career. This is what was meant in #4 above.
10. There’s now an Agile HR Manifesto.
Of course there’s an Agile HR Manifesto. 🙂