Over the last five years the business of software development has been totally transformed by the concepts of agile development. So is the business of Management and Human Resources.
What is the Agile model of software development? Instead of using the traditional "waterfall" approach to building software (which involves a step-by-step process of requirements definition, refinement, and software engineering – often taking years), today software companies develop systems in weekly "sprints" (a software release every week), and meet every day in a 15 minute "scrum" to make sure that everyone knows what to do and they have the information they need to get things done.
This agile model (which is now well known in Silicon Valley and in the software engineering world) has transformed software. It has many benefits: it reduces the long cycle times that create risk; it enables engineers to take advantage of the fact that requirements change quickly; and it honors the fact that people perform best when they work on small projects they can finish quickly.
Agile is also built on the understanding that people learn in small chunks – so while it may in fact take a year or two to build a highly complex website, no person needs to try to understand the entire engineering program in advance. And as the image on the right shows, daily work becomes a part of a bigger project in a continuous, dynamic process.
I have worked on several large software projects in my career (one big failure at Sybase and another big failure at DigitalThink) – and in both cases the projects failed because they took too long, there were continuous changes in requirements, and rapid market shifts made it impossible to "keep up" while business needs were changing. I remember Dave Litwak, one of the founder of PowerSoft (a pioneering company in client/server software) told me that "any software project which takes more than two years to ship will be a flop." He was right.
The Agile model is now revolutionizing management, HR, and L&D.
Everything which makes Agile work for software also works for management, leadership, and HR. Management and HR Processes are too slow, they don't reflect business changes fast enough, and they dont give people fast-enough feedback and learning.
Think, for example, about the frequently-criticized traditional employee performance management process. The traditional process (which more than 60% of all organizations find highly ineffective), is a year-long waterfall process. Managers set goals (annually or quarterly) using some cascading process, track these goals periodically, and at the end of the year the managers collects feedback and "deliver" the performance review. The result: in most companies the process is uncomfortable, riddled with frustration, and often out of date.
Consider the problems inherent in this "waterfall" process:
- Goals change continuously during the year. While corporate objectives may not change, business conditions change constantly so employees and their managers must continuously adjust their priorities. What happens when new goals appear? Can we rewrite the quarterly goals on a regular basis? Not easy.
- Feedback takes place continuously. Employees are getting feedback every minute of the day (hopefully). They are doing great things and they are making mistakes. When they make a mistake, they should get feedback immediately and the organization should immediately adapt. In the military when something goes wrong, there is an "after-action review" that week. Why should all this be "saved up" for the end of the year? The concept is really crazy.
- Performance feedback comes from all directions. In the old days (when I worked at IBM), we all had managers who sat in the corner office and we actually talked with them every day. Today most workers work in teams with highly distributed teammates – and we are likely to get performance feedback from every possible direction (including from customers and partners). This "continuous feedback" loop takes place without the manager involved. Just like in Agile development, we need a process for continuous improvement to take place with or without the manager.
- We cannot predict the future. Yes, it is important to set goals and establish long range objectives. But the world changes. Shouldn't our performance management process be flexible enough to adapt immediately when business conditions change? Our new research in goal development shows that companies which revise goals regularly (and this means multiple times per quarter) are getting nearly three times the output than those which review goals annually.
- Old information is lost information. When feedback and performance information is available, it should be acted on immediately. As it gets older it becomes less useful, and eventually becomes irrelevant. The whole concept of Lean process improvement (the essence of the Toyota Manufacturing System) is to give all employees real-time information and let them act on it immediately. Why would we institutionalize a process which takes an entire year before employee feedback is delivered?
There are many ways to improve the way people are managed – and performance management (which is typically viewed as something which HR lays upon us) needs to evolve – and fast. Managers are adopting agile approaches right now – and Human Resources is starting to adapt as well. (We recently embraced the Agile development model in our research team, and productivity has tripled.)
Look at where Agile fits in Management and HR:
- Traditional annual performance appraisals use an older "waterfall" method – continuous feedback and recognition is an "agile" approach.
- Traditional formal training and certification is a "waterfall" model – rapid e-learning and informal learning is an "agile" approach.
- Top down cascading goals are a "waterfall" approach – rapidly updated "objectives and key results" (sometimes called OKR – widely used at Google) is an "agile" model.
- Traditional annual rewards and bonuses are a "waterfall" model – continuous recognition and social recognition systems are an "agile" model.
- The annual employee engagement survey is a "waterfall" model – continuous online idea factories and open blogs are an "agile" model for employee engagement.
- The annual development planning process is a "waterfall" model – an ongoing coaching relationship is an "agile" model for leadership.
- The traditional recruiting process is a "waterfall" model – this is being replaced by a continuous process of social recruiting and referral-based recruiting which can be rolled out in a few hours.
This has a profound impact on leadership, management, and human resources – and it has become one of the major focus areas for our research in the coming year. Let me offer a few resources for people to learn more about this topic.
Look at Rypple – a hot young company which is revolutionizing the process of social performance management in companies like Facebook, Gilt Groupe, Rackspace, and other fast-moving organizations. Rypple brings Agile to performance management and coaching, competing with the more traditional approach offered by SuccessFactors, Taleo, Oracle, and others.
Look at I Love Rewards, a similarly fast-growing company which is applying the agile model to rewards and recognition. I Love Rewards is upsetting the traditional "waterfall" model for rewards and recognition, a $48 billion marketplace, by giving companies a platform and set of tools to let employees recognize each other on a continuous, highly engaging basis.
Read about how Atlassian, one of the fastest growing software companies in the world, manages its performance feedback process. Joris Luijke, the VP of HR, has totally rewritten the rules and mentions the use of other new tools like small-improvements, and cadence.
Consider what has happened to the corporate training industry. While formal education and training has not disappeared, today people want to learn "on the job" through informal and social networks on a real-time basis. This is a form of "agile learning" – demonstrating the same shift from "waterfall" to "agile" we see in software. Companies throughout the training market are scrambling to build informal learning solutions into their offerings – and products like Jive, Chatter, and Sharepoint are now becoming standard tools for informal learning.
The world has become more "instant" every day. Companies which can adapt to agile management models will move faster and out-perform their competitors. Think about how you can implement the Agile model of management and HR in your organization this year.