Companies’ core businesses and functions have largely replaced long-range planning models with methods that allow them to adapt and innovate more quickly. HR departments are starting to use agile talent practices to reflect and support what the rest of the organization is doing. In a sense, they are going “agile lite”—adopting the general principles but not all the protocols from the tech world.
In this article Wharton’s Peter Cappelli and NYU’s Anna Tavis discuss the profound changes companies are making in six critical areas. Annual performance appraisals are in many cases the first traditional practice to go. As employees work on shorter-term projects, often run by different leaders and organized around teams, companies are recognizing that workers need more-immediate feedback throughout the year so that they can “course-correct” mistakes, improve performance, and learn through iteration.
Coaching is another key item: getting managers to move from judging employees to helping them develop day to day. Teams, rather than individuals, are the focus now that work is increasingly organized project by project, and this means that organizations must contend with multidirectional feedback, give decision rights to the front lines, and handle more-complicated team dynamics. Compensation is changing as well: Some companies are switching to spot bonuses, while others are dropping bonuses altogether and adjusting salaries much more frequently according to changes in performance and market rates. Recruiting has become faster and nimbler, and new learning and development practices help employees identify and access the skills and training they need to advance.
HR has not had to change in recent decades nearly as much as have the line operations it supports. But now the pressure is on, and organizations from IBM to Regeneron Pharmaceuticals to the Bank of Montreal are paving the way.
Companies adopting agile talent practices are giving a lot of thought to how employees experience the workplace—in some cases, treating them like customers. In this interview Diane Gherson, IBM’s chief human resources officer, discusses how that’s playing out as the iconic tech firm revamps its business model.
As mobile banking took hold and customers became increasingly aware of what they could do for themselves, the global banking group ING launched a pilot transformation in its Dutch retail unit, replacing most of its traditional structure with a fluid and more responsive organization composed of tribes, squads, and chapters. Dominic Barton, Dennis Carey, and Ram Charan report on this new way of working, which is being rolled out more widely across the bank.
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Agile isn’t just for tech anymore. It’s been working its way into other areas and functions, from product development to manufacturing to marketing—and now it’s transforming how organizations hire, develop, and manage their people.
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