HR’s role in building an Agile culture aligns closely with the Management 3.0 mindset of emphasizing trust, empowerment, collaboration, learning, outcome orientation, embracing change, and promoting a people-centric approach. By embracing these principles, HR can create a supportive environment that enables agility to thrive and empowers employees to enthusiastically contribute to their organization’s success. Find out more in this article from Management 3.0 Facilitator and specialized Agility in HR Facilitator Thiago Brant.

What does Agile culture mean?

Agile culture is mainly characterized by collaboration and cooperation between people and teams in an adaptable environment that minimizes autocracy, control, and bureaucracy. These ways of working are encouraged so that we can perform best in the VUCA world that is wrapped in Volatility, Uncertainty, Complexity, and Ambiguity.

Agile culture is also linked to the ability to continuously innovate and improve in order to keep our businesses (and products) relevant. Or, as we say in Improve Everything: “continuously improve to defer failure for as long as possible.”

I have been studying and practicing Management 3.0 for a long time. While on this journey, I have frequently encountered obstacles that often have to do with people management, which, in most companies, is known as Human Resources (HR). I felt a gap between the day-to-day work and people’s practices as it was clear that one needed to collaborate effectively with the other.

This was my motivation when entering the world of Agile HR and trying to understand how to connect these two worlds. I wanted to know how to make them collaborate and progress together to enhance the Agile culture of an organization.

A while ago, I wrote an article, Agile HR: Why Companies Need their HR to be Agile. I commented on Agile 4 HR and HR 4 Agile, discussing how to apply Agile practices in HR’s day-to-day life as well as using HR to enhance agility in an organization.

What is the role of HR in creating an environment that supports an agile culture?

It is important to understand the central points of an agile culture, and, as a result, the Management 3.0 Principles are an important guide for us. They are:

1. Engage people and their interactions
2. Improve the system
3. Help to delight all clients
4. Manage the system, not the people
5. Co-create work

We usually do an exercise in Management 3.0 workshops where we collect management stories that were good and bad, and in general, it is often noticed that the principles of Management 3.0 were present in the good stories but missing in the bad stories. It is therefore fair to assert that these principles contribute to better environments and greater results.

Often company HR practices contradict or prevent the full application of these principles which leads to environments where delivery circumvents the HR practices and creates its own path, often excluding HR professionals from their day-to-day responsibilities.

“Culture is a fabric made of people, relationships, and practices. If we want an Agile culture, we need to put intention and shape the organization’s practices with that purpose. HR is responsible for influencing this path, anticipating possibilities, and seeking the results of these actions. Our responsibility in the Agile culture needs to be admitted and understood; we can be facilitators or great blockers of this transformation. Only then will we be able to generate impact and value so that Agile is perceived by the business as more than a method, but a way of seeing work, which needs to be simpler, more collaborative, and generate more value.”
– Camila Berteli, Learning, Development, and Culture Manager at Unilever

Management 3.0 is an essential bridge between HR and delivery. So much so that I quickly embraced the topic when Management 3.0 launched its Agility in HR Workshop. The workshop reinforces how to bring agility to HR and make it an ally of company teams. It addresses important topics concerning HR and how HR can contribute to and support the development of an agile culture.

How HR can contribute to and support the development of an agile culture

In an Agile culture, HR creates a supportive environment that fosters collaboration, learning, and employee engagement. Here are some key ways that HR can contribute to creating such an environment:

Performance Management

HR can redefine performance management practices to align with Agile principles and create a supportive environment with an Agile culture.

People are already doing their best; the problems are with the system. Only management can change the system.

W. Edwards Deming

I think the moment that most opens people’s minds when I teach HR professionals is when I comment on Deming’s 95/5 rule, quoted above.

This means that, in general, when we work on individual performance improvements, we can improve performance by up to 5%. When we act systemically, we can transform all the remaining potential by 95%.

This is the inspiration for the fourth principle of Management 3.0; HRs need to embrace and adapt, creating new ways of working with performance and rewards. Traditional practices such as forced curve, nine box, and other performance management models are becoming obsolete as companies require increasingly optimized systems.

Management 3.0 offers a holistic view of employees and allows us to work on different performance management and development methods, focusing on human needs, flexible career ladders, and improvement via competency development.

HR needs to review  the theories of analysts and reductionists who tended to think about numbers and not about people.

To have an Agile culture, companies must give people autonomy and create a system to support this. And HR is the top player in this. See No Rules Rules: Netflix and the Culture of Reinvention by Reed Hastings and Erin Meyer as HR is in charge of creating an Agile culture at Netflix. 

Employee Engagement and Motivation

By prioritizing employee well-being, HR helps to create a supportive environment where individuals can thrive.

Firms exist to coordinate and motivate people’s economic activity.

John Roberts, The Modern Firm

Many firms usually motivate people with money. But that is rather simplistic. Work environments must increasingly focus on human needs and motivators. One important need is fairness, which should always appear in remuneration and reward models. A well-known experiment demonstrates this fairness phenomenon and has even been the subject of a TED with Frans de Waal, Ph.D.

To foster employee engagement and motivation, HR can work on the following:

• Career ladders – how to work in the modern world. It is necessary to offer more flexible and personalized career paths to employees.
• Job titles and roles – the concept of a fixed job needs to be updated. Instead of a steady job, expect continuous adaptation and responsiveness to meet the moment’s needs.
• Salary formulas – a good way to deal with salaries in a more transparent and fair way.
• Merit Money is a different way to reward people based on collective intelligence, not just on HR or management requirements.
• Six Rules for Rewards – six scientific ways to improve your rewards system (merit money, for example, applies all the six rules).

Training and Development

HR can facilitate training programs and workshops to enhance employees’ understanding of Agile methodologies and principles. By providing opportunities for continuous learning, HR helps employees stay up-to-date with Agile practices, enabling them to work effectively in an Agile environment.

Through learning, we re-create ourselves. Through learning, we can do something we never were able to do. Through learning, we reperceive the world and our relationship to it. Through learning, we extend our capacity to create and be part of life’s generative process.

Peter M. Senge

Corporate universities, individual development plans, training incentives, courses, study, and reading platforms. Many HRs already do all of this as these learning initiatives are very important for organizations, yet there is plenty of room for improvement.

HRs should stop acting as centralizers of the learning process and make learning a systemic property of the company and its teams. Here is how:

• Establish the use of the Team Competency Matrix – a simple and powerful tool to develop competence.
• Dedicated slack time or knowledge hours – people need time to self-improve, and HR can make room for that by establishing company- or team-wide guidelines.
• Internal mentoring program – improving competence with a company’s existing internal competency is possible. Mentoring programs led by HR are a great way to do this.

I have seen, at least here in Brazil, great HR initiatives, such as:

• The employee managing their training budgets
• Slack time as Geek Tuesday, Friday Learnings, Tech Talks, Team Gathering
• Many hackathons, DOJOs, guilds, and other learning opportunities
• Simple mentoring programs in small companies and more sophisticated ones in big companies, supported by tools.

Stefanini, in Brazil, is a great example of a global mentoring tool that connects people who want to learn with people who want to teach, improving internal competency at a low cost. I talked about this with Stefanini’s People VP (in Portuguese).

How does your HR team support your company in terms of learning?

Build a Supportive Organizational Structure

HR can help shape organizational structure to enable Agility. This includes designing flexible roles and job descriptions that allow for cross-functional collaboration and adaptability, implementing flexible work arrangements that promote work-life balance and remote collaboration, and establishing clear channels for communication and decision-making. By creating an organizational structure that aligns with Agile principles, HR supports an organization’s flow of information, decision-making, and innovation.

Today, leaders need to deal with a series of dilemmas known as organizational ambidexterity: Hierarchies versus Networks, Specialization versus Generalization, Efficiency versus Effectivity, Centralization versus Decentralization, Exploitation versus Exploration.

Achieving organizational ambidexterity involves creating structures, processes, and a supportive culture that encourages exploration and exploitation of key information.

This is all key to creating a great Agile culture, and HR is the department which can foster a more participative approach to organization design. Heidi Helfand (in her amazing and must-read book Dynamic Reteaming), talks about being moved from one team to another without involvement in this decision to reinforce the importance of employee participation in decisions like this.

Encourage Experimentation and Adaptability

Agility requires a mindset that embraces experimentation and adaptation. HR can foster this mindset by encouraging employees to challenge the status quo, providing the resources and support needed for experimenting with new ideas, as well as celebrating and learning from successes and failures. By promoting a culture that values learning from mistakes and adapting to changing circumstances, HR helps to create an environment where innovation and continuous improvement thrive.

Label your next new idea an experiment, and let everyone know that you are just testing it out.

David and Tom Kelley, Creative Confidence

By our nature, humans learn through trial and error; we learn by experimenting. Traditionally, companies have created a blame culture where people are afraid to risk failure and try something different.

We need to activate the culture of learning through failure. And, oddly enough, it is not very complicated. Leaders say that you need three elements to create a safe-to-fail environment:

• Try new things, in the expectation that some will fail
• Make failure survivable because it will be common
• Make sure that you know when you have failed.

In today’s rapidly evolving business landscape, organizations embrace Agility as a key driver of success. Agile methodologies and mindsets have enhanced adaptability, innovation, and team collaboration, leading to better outcomes and a competitive edge.

However, building an Agile culture requires more than just implementing new processes or adopting new technologies. It requires a supportive environment that fosters and sustains Agility throughout the organization. The HR department plays a vital role in this.

HR is responsible for cultivating and nurturing the people-centric aspects of an organization. They are uniquely positioned to drive cultural transformation and facilitate the changes necessary to build an Agile organization. By focusing on several key areas, HR can create a supportive environment that encourages Agility and empowers employees to thrive.