Agility critical to future business success, says CIPD

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If organisational is important to business success in today’s world, it is critical to business success in tomorrow’s world. Critical to business survival, in fact, according to a Chartered Institute of Personnel and Development (##) report, entitled ‘HR: Getting smart about agile working’.

What does this term organisational agility mean? It can refer to a number of things, but in essence it refers to two things: workforce agility and operational agility. Workforce agility means the ability to be flexible and match workforce fluctuations to demands. Having an agile workforce can mean many things – flexible working hours, multi-skilled workers who can be deployed across the business where their skills are needed, freelance shifts…Flexible working has for too long been viewed as an employee benefit. It is time for businesses to focus on the benefits flexible working arrangements can bring them as well. The Agile Future Forum (AFF) sums it up nicely: ‘Workforce agility allows an organisation to establish the optimal workforce to support an organisation’s objectives’ The AFF defines agile working practices along these lines:

  • Time: when do they work? (e.g. part-time working; staged retirement)
  • Location: where do they work? (e.g. people working across multiple sites)
  • Role: what do they do? (e.g. multi-skilling)
  • Source: who is employed? (e.g. using contractors or temps)

Having an agile workforce enables organisations to manage their operational costs more effectively by having the right workforce, in terms of numbers and skills, when they need them. Resources can be allocated swiftly and easily across an organisation as demand arises. They can also be downscaled when demand drops or fades altogether. Organisations that want to be able to move swiftly into new markets, launch or take advantage of innovations, or just keep moving ahead as the market moves ahead, need to have an agile workforce to achieve this.

This agility can only happen when there is overall operational business agility, however. Operational agility refers to an organisation’s ability to adapt and respond quickly and effectively to organisational needs and market changes. It also refers to a mindset, a mindset that enables organisations to change when change needs to happen. In its 2011 , Shaping the Future, the CIPD defined agility with regard to processes, structures and ways of working as the ‘ability to stay open to new directions and be continually proactive, helping to assess the limits or indeed risks of existing approaches and ensuring that leaders and followers have an agile and change-ready mindset to enable them and ultimately the organisation to keep moving, changing, adapting’.

Agile organisations have to be both agile in terms of processes and structure and workforce.

Business leaders agree that agile working is the way forward. Nearly 90% of global senior executives surveyed by the Economist Intelligence Unit a few years ago said that organisational agility was critical for business success. And in the CIPD’s Labour Market Outlook 2014 report, ‘smart working’ – a concept which is aligned to the principles of business agility – was cited by 56% of UK organisations as one of their top tactics to improve productivity.

In order for businesses to become truly agile, the CIPD says HR needs to understand the imperatives for business agility, practice it themselves and drive the necessary changes through their organisation. In the CIPD report, workforce planning and training and development are named as HR leaders’ top drivers to improving responsiveness to change. Second in line is focussing on their organisational environment and culture. When looking at the environment and culture, HR leaders plan to improve leadership and management capability, look at organisational design and restructuring and cultural transformation.

Agile organisations are highly flexible internally and highly focussed externally on their customers. Why are they externally focussed? Because this is where changes will happen and organisations need to be customer-focussed to move with these changes. Is this how UK organisations are positioned? According to the CIPD report, most organisations, particularly large organisations, have the opposite culture. The CIPD says a third of all organisations and 60% of public sector organisations, have a culture with a strong internal focus and a high degree of controls. The report also shows that some organisations recognise that this shift to internal flexibility and external focus is essential. Those organisations that already have a culture based on flexibility and external focus are more likely to say that their organisation can and does respond quickly and effectively to change. SMEs, not surprisingly, are more able to respond quickly to change than larger organisations – 32% of SME HR leaders said their organisation is effective in responding to change, compared to 21% of HR leaders in large organisations. HR leaders and their teams need to move organisations away from rigid control towards flexibility and external focus.

Good job design helps bring about agile working, but the report found that only 5% of organisations practise output-based working, rather than hours-based working. Only 5% build in slack to allow for experimentation and rapid response.
Employees too are driving the agile working agenda, as we well know. Ever increasing numbers of employees expect to be able to work flexibly, in terms of hours and where they work. In terms of what working patterns employees would like, the CIPD compiled a list of the options and employee preferences:

  • 43% would like to change the start and/or finish time of the working day
  • 35% would like to decrease the number of hours they work
  • 31% would like to change the number of days worked
  • 28% would like to be able to vary their working pattern from day to day
  • 21% would like more flexibility over where they work
  • 45% of employees say they work from their company’s core office most of the time
  • 64% stay at the same desk most of the time
  • 51% never work from home
  • 7% work from home most of the time.

Many HR professionals surveyed said they are reviewing when and where people work and how quickly they can move between roles. They are also looking at how to organise workforces to ensure a better match of resources and skills to demand.

HR as a function needs to be agile and lead the strategic agenda. There’s a lot of work for HR to do to make their function and their organisations truly agile.

By Roisin Woolnough

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