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How HR can build enterprise agility and create a culture of innovation

Why an unclear vision or focus can cause dependency issues

On the 29th October 2020 Jamie was invited to talk to a U.S. consultancy called Applied Frameworks who specialise in 'Agile Enterprise Acceleration', 'Agile Product Management' and 'Agile Portfolio Management'. Applied Frameworks are active members of the 'Scrum Alliance' and 'Agile Alliance', the central body of certified agile qualifications.  The discussion was centred on the wider organisational impact of dependency management and the role HR plays in removing dependencies to improve innovation, along with a reflection in how HR's function is evolving. Previous dependency management was seen to be a term that mainly existed within software and product function, but it's now expanding out into the wider context of the business.

Check out the full recorded video of the webinar below

Dependencies originate from the business ecosystem

Although it’s difficult to avoid getting into the technical detail of dependency management, for this discussion the focus will be more on the tertiary problems of dependency management and in how they get exposed in different ways across the rest of the organisation rather than within the IT function. It's worth noting that generally, people in the product management world tend to deal with dependency management challenges when scrum is being scaled across multiple teams or there’s a portfolio of products with shared resources or core services.

Here I thought it would be useful to recap on root causes of dependency management so we can understand the wider significance and context within a workforce. The list put together is based on my own experience with the blue cards representing what you might expect and tend to live in the IT / software development teams - they are the obvious culprits and also put the responsibility on a portion of the organisation. It's also worth stating for our audience outside the product management function what we mean by product management. In its simplest form, product management is a wide classification for an innovation function within the organisation.  Its goal is to productise knowledge and services into scalable solutions and the function becomes critical to the evolution of the business model.

Root causes of dependency management issues

For this discussion we're going to focus on particular cause of dependency management that has wider impact to the rest of the business, which is when organisations have an unclear product vision. Unclear product vision is also tied to unclear strategic themes for the whole organisation.  Both are the foundation for decision making and prioritisation and the sequencing of work, how it's cascaded down or allocated horizontally. It can stall innovation and cause poor decision making. In Bowland we invest a great deal of emphasis to ensure organisations, teams and individuals have the right focus and clarity of outcome. This is a central pillar to achieving high-performing teams.

Case Study: Banking Incumbents

At this point I thought it would be helpful to unpack an industry example that we can all relate to, to demonstrate the impact it has on an unclear strategic themes and measurable outcomes.

From the 1980s some of the world’s largest banks went on a big spending spree where they acquired banks from around the world to help them move into international banking.  Although I’m using Santander as an example this same behaviour was replicated across lots of large international banks who had been operating for a millennia or more. The outcome of this strategic decision nearly caused devastation in the banking industry and it led to the FinTech revolution. As banks purchased new banks they acquired different banking technologies that became hard to maintain and even harder to unify into one core banking system.

Picture of the bank Santander's international expansion
Santander's international expansion

Some of the incumbent banks became museums of technology dating back to the 1960s. The complexity of their systems made it impossible to manage risk.  

Nearly 50% of banks do not upgrade old IT systems as soon as they should, according to a report by the UK’s Financial Conduct Authority (FCA). And, 43% of US banks still use COBOL, a programming language dating from 1959, a report shows; and extra layers embedded on top of it are causing outages.

During the period banks went through a growth in mergers and acquisitions the resulting outcome meant they had large technical debt that couldn't handle the digital transformation consumers were beginning to demand or expect.  At the same time many banks off-shored their customer service function, began closing down high-street stores and removed employees who had built the original legacy platforms. They threw millions of pounds on IT contractors to help deal with the legacy but the knowledge would disappear when the contractors finished.

What happened next was a classic free-market response. Agile FinTech companies responded with banking software that was much more agile and responsive to the 21st century needs of customers. As a consequence, the existing banks suddenly found themselves competing against banks that had emerged from nowhere as new start-ups.  The start-ups focussed on new cutting edge cloud-based solutions and technology stacks that had great usability, but they also focussed on solutions to some of the pains customers of the existing banks faced. Why did it take 3 months to open a business account?  The start-ups made it possible to create a new business account within minutes and placed a greater emphasis on customer service, which the incumbent banks had neglected.

Banks began to realise  their future commercial viability depended on their capacity to replace legacy systems, improve customer experience and innovate.  Structurally the bank wasn't nimble and agile enough to transform itself to its new customer expectations and created space for new banks to emerge and challenge their existing market.

Conclusion

In conclusion we can see how the banks focus on being led by mergers and acquisitions caused significant downstream organisational problems.  The lesson in this story is about ensuring the vision of the company doesn't lead to dependency management problems that can become so significant that it can cause banks to go into administration.  It also demonstrates how poor organisational design can cause enterprise agility problems that make it hard to respond to market changes. What did it mean for the rest of organisation?

  • The incumbent technology almost destroyed the commercial viability of the bank
  • The banks lost billions of pounds
  • The core technology stack prevented them from being agile and responsive to market changes
  • The tech teams  become frustrated that they were in a maze of dependency management issues and decided to leave
  • The sales and marketing teams became impacted because their customers were leaving to go to new more agile FinTech banks
  • Component-based team structures riddled with contractors to help deal with museum technologies prevented them being able to innovate and embrace feature-driven teams
  • Talented people within the organisation decided to leave because it created a toxic culture of blame, long working hours and unrealistic deadlines

How could they have done better?

  • They could have spoken to their customers about their changing consumer needs?
  • They should have listened to more of their own internal voices?
  • They should have had more divergent ideas how to do a better job and understand the problem?

Dependency issues are a wider business focus now

The banking case study wasn't only isolated within one industry it was systemic across multiple industries.  This is why corporations began investing into greater 'enterprise agility' and why some of the agile practices of the software world began transcending across into beneficial tools wider organisation functions could benefit from.  I wouldn't be surprised if the emergence of AgileHR was also connected to this.

What we’re seeing now in the post FinTech emergence and 4th industrial revolution is the cascading effect of agile and scrum into the wider organisation.  I included this diagram because it articulates the workforce structural changes happening and how they need to retool different departments and teams with a mindset shift. 

Fundamentally there’s an evolution of the business model.  In an ideal product world we would choose to remove all dependencies to free us up to innovate more rapidly, but that would go against the construct of the natural lifecycle of our world.  We all depend on oxygen, water, sunlight and food to survive; as elementary components of life we can debate which one sustains the other.  What comes first; is it the chicken or the egg? I think what we need to do is draw a line between what are natural dependencies and those that are a result of a dependency mindset.  

The evolution of the business model

It’s not healthy to have an organisational culture that breeds a dependency mindset where employees feel their managers aren’t progressing their talents and are conversely promoting less capable individuals.  By distinction this dependency management stems from the same hierarchical problem that software engineers face and the frustrations that product owners or managers share when they try and scale agile. What's needed is great agility, perhaps even a decentralised model of decision making and interdisciplinary teams. The impact of the upstream decisions can have much more significance downstream where the boundaries become more constrained and difficult to innovate.

The role of HR in managing dependencies and emphasis on an innovation culture

In this section we’re going to look at a different persona around dependency management, which is a wider functional area of an enterprise.  In some cases dependencies can squash innovation or actually result in a company failing such as banks after the FinTech revolution as we discussed.  

A legacy software platform can prevent a business being able to develop and release new products to market, but it can also affect the scalability of existing products from a sales perspective.  What the 4th industrial revolution requires is a greater enterprise agility and in many ways COVID-19 has accelerated this change.  The 4th industrial revolution predicted a change in the way we live and work, along with how we relate to one another with a greater merge between the physical and digital world.  

COVID-19 has exposed an accelerated rate in the need for greater enterprise agility and it’s here we explore a different personas around dependency management, since HR plays a critical role in orchestrating enterprise agility.  Here in the UK we’ve seen many large incumbents go into administration following the impact of COVID-19 and I believe it all has a connection with dependency management-style issues.

It's here we move our focus on to the new requirements ofHR , since HR is becoming a critical function in achieving enterprise agility. 

"To win the marketplace you must first win the workplace" - Doug Conant, Former President and CEO Campbell Soup Company

HR has a role to play in recognising the importance of product vision and clarity around the company’s internal stakeholder needs, along with outcomes and objectives the organisation has to achieve.  HR plays a role in the communication of this across the organisation and the orchestration of people or specialisms to make this happen.  An obvious root cause of dependency management within corporations seems to originate in the very hierarchical design of the workforce structure and is requiring a natural evolution.  The following diagram highlights various new organisational structures that have been evolving from older more traditional ones.

Source Jacob Morgan (thefutureorganization.com)

The newer hierarchical structures look quite familiar to agile software team, but for large corporations they are having to grapple with how to restructure themselves to achieve greater enterprise agility. Before a large corporation can even consider moving to a more innovative culture, design decisions need to be made about the organisational structure.  A traditional hierarchical structure will struggle to enable the workforce to enable a customer value driven delivery model, or a model that empowers and engages its workforce from a mission and values perspective. Some of the hybrid examples enable the traditional structure to carry on thriving, but create an innovative function such as the 'Flatarchies' example.

HR’s role is becoming about fostering agility and innovation across the rest of organisation and to help them do this they need to try and remove a 'dependency mindset'.   Dependency management issues aren’t only contained within the software or product team.  A lot of dependency management issues tend to originate further up-stream from an unclear vision or goal.  Industries are becoming much more niche and as a society we’re dealing with much more complex problems that have a knock on effect to workforce mobilisation, talent management, work structures and the management of teams. 

If a business makes a conscious decision to move towards a more innovative culture, then before choosing an agile methodology (i.e. scrum, XP, design thinking, systems thinking, etc.), then prior to this we know we need to design an organisation structure that encourages a high-trust management culture, servant leadership, and an organisation capable of handling continuous change management.  ‘The continuous delivery movement’ concept extended by Jez Humble and David Farley into what has now become known as DevOps is a useful analogy for what the organisation needs to become. 

The new role of HR

As part of 2020 Global Human Capital Trends Deloitte report, the new evolution of HR has been referred to as 'Exponential HR'.  Within the report it reveals a number of new archetypal agile HR roles, which are essentially copies of the roles that already exist within agile product teams. As opposed to being driven by the external customer, the AgileHR role is focussed around an internal customer who is the employee. Although Deloitte have come up with their own set of role archetypes, people such as Josh Bersin, Rob Cross, John Boudreau, and many others have been talking about equivalent roles and functions of HR.

Workforce Experience Architect

The workforce experience architect orchestrates collaborative effort across the enterprise internally and externally to develop and curate the workforce experience to drive productivity, engagement, and positive employer brand.

Image taken from the Deloitte Exponential HR Report


  • HR customer-driven
  • Influencer
  • Organisational navigator
  • Decision-maker
  • Relationship curator
  • Creative and innovative thinker
  • Coach

Solution Architect

The solution architect brings together cross-disciplinary teams to create end-to-end solutions/products that meet workforce and enterprise needs, solve challenges, and drive value for customers and society.

Image taken from the Deloitte Exponential HR Report
  • Innovation leader
  • Digital advocate
  • Design thinker
  • Agile strategist
  • Relationship manager
  • Storyteller
  • Business outcome focussed 
  • Continuous innovation focused
  • Inclusive facilitator

Product Manager

The product manager creates and sustains policies, programs, and processes, typically integrating HR functional areas that have historically been discrete and siloed.

Image take from the Deloitte Exponential HR Report
  • Dynamic innovator
  • Team orchestrator
  • Product sherpa
  • Marketing champion
  • Domain knowledge

Sprint Lead

The sprint lead like the product owner in scrum teams, launches and manages cross-functional teams that quickly and effectively solve business challenges.

Image taken from the Deloitte Exponential HR Report
  • Agile coach
  • Researcher
  • Data examiner
  • Credible activist/Knowledge aggregator
  • Designer
  • Collaborator

Digital HR Integrator

Reimagines the work of HR and the solutions it provides by infusing advanced, digital technologies that change what HR delivers, how it delivers, and who (including machines) delivers the work.

Digital HR integrator
Image taken from the Deloitte Exponential HR Report
  • Organisation and workforce information steward
  • Digital mindset
  • HR consumer grade tool expert
  • Solution iterator/Tester
  • Insight storyteller

Augmented HR Specialist

Deploys integrated solutions and continuously improves HR services through a variety of channels that provide a positive HR customer experience. Leads and manages the design and deployment of advanced technology tools that deliver services for HR customers.

Image taken from the Deloitte Exponential HR Report
  • Ethics and compliance dedicated
  • Business outcome focussed 
  • Continuous innovation focused
  • HR customer experience driven
  • Automation integrator
  • Internal/External partner

How can HR change the dependency-mindset

HR needs to design the culture to enable greater enterprise agility, but to achieve this it also needs to remove dependencies to enable agile to provide the benefits it has to the software industry. This is a mindset shift and a move away from reductionist thinking to embrace new approaches that tackle more complex problems. The following are some of the strategic areas where I see HR helping

  • Encourage functional diversity between different roles or departments in an enterprise. Everyone can join in a project and make a contribution
  • Encourage employees to work creativity instead of fixed role (T-shaped network teams)
  • Encourage flexibility so enterprises can share or adapt resources freely to face changing conditions
  • Decentralised decision-making process and related duties
  • Design training schemes or programs for ways of collaborative-working, re-skilling and interdisciplinary working 
  • Orchestrate a culture that’s willing to learn and adjust to new ways of working and communication
  • Develop network leaders that think about what value their customers, employees and strategic partners can offer and mature their thinking around the value in employee co-creation, advocacy, and sharing
  • The Jeff Bezos philosophy which is to be an invention machine, based on the speed of movement, nimbleness, and risk-acceptance mentality normally associated with start-ups

A workforce will need to work on its mindset so it moves towards a learning organisation and a new set of values that will require structural and cultural change including leadership at the top. Its practices, people, tools and processes need to be able to adapt and respond to market changes.  It makes sense for HR to see the customer as its own internal people who become the user of the employee experience.  This approach will not only help talent management and succession planning, but it will also encourage a culture of interdisciplinary teams.

With a new operating environment that demands rapid change, HR will also need to aim to incrementally deliver customer value and iteratively test and learn from new programmes. This is a big change from the conventional model, which will require HR to see themselves as orchestrators of value creation and facilitators of collaborative problem solving.


How Bowland can help

Our core philosophy at Bowland is about helping organisations achieve an 'Continuous Performance Engagement' strategy that provides greater enterprise agility and leads to high performing teams. Our new Flow platform provides flexible tools with feedback at the heart of enabling meaningful conversations to happen that help the organisation transform. Please contact us if you would like to find out more about our platform, or if you would like us to design you some workshops focussed around agile HR ways of working