By Brian Lucas
In the recent past, I was asked to address the subject of human capital management, the emergence of human interaction management and their effect on agile. The fact is that the people element in the system is most important and the process is often less than relevant. That makes human focused philosophies and agile a perfect match. Unfortunately, the more negative statistics about human involvement and commitment in the enterprise are difficult for some people to grasp or even believe. The lack of engagement in many enterprises is an amazing area of opportunity for improvement. I have not seen many good statistics that broadly measure the benefits agile brings when employee engagement is dramatically increased, but I know that impact is startling and a large contributor to agile’s success. So let’s take a look at agile and the human capital management concept.
How engaged are your employees? A Gallup Management Journal survey of 3,500 organizations reported in 2001 that only 26% of employees are fully engaged in their jobs while a 2007 Towers Perin report of over 90,000 employees showed that only 21% were engaged. This means that less than 1 in four employees are working to the goals of the company while three quarters of the work force was not actively or fully contributing to the organization bottom line. Only a fraction of your work force carries the load for the entire company and there is much room for performance, productivity and profitability improvement. Furthermore, a large percentage of the workforce is actively disengaged and working against the company goals. These toxic employees poison the work atmosphere for all those around them and even show a very negative face towards customers.
The bottom line is that not engaged and disengaged employees cost the organization huge amounts of money. They are far less productive, have no company loyalty, and spread suffering and chaos from increased financial volatility and negative financial cycles. All at a cost of $292-355 Billion dollars annually. Companies need to reengage their employee if they are to survive.
Human capital management systems can reengage your employees. In fact, investment in these systems is a leading rather than a lagging indicator of profits. Studies clearly indicate that companies with committed employees have significantly better employee performance. The financial data shows that these companies are significantly stronger financially even in challenging times. These companies typically deliver more than twice the shareholder value than their competitors according to a Gallup Management Journal Survey. “The corporation simply cannot afford to deprive itself of the intelligence, imagination and initiative of ninety per cent of the people who work for it, that is, the workers.“- Concept of the Corporation , Peter F. Drucker
A focus on human performance management leads to profitability and sustainability. Over the last decade, companies that have invested in HCM systems have outperformed those who have not and weathered tough economic times better.
Human interaction management not only focuses attention on the people element of the system, but seeks to optimize the activity by understanding patterns and behavior and encouraging innovation and collaboration. HIM embraces a Goal Oriented Organization Design concept which is amazingly similar to an agile team structure. Both are based on lattice organization structures that were first popularized by W.L. Gore.
HIM drives its activity from a three tiered strategy. From the top-down a set of Guide Points represent business strategy expressed as high-level models. Decisions however, are pushed down to the lowest level of empowerment with a middle-out approach. Finally, planning represents a collaborative work that evolves as an on-the-fly effort of the group during the normal execution of work in a bottom-up fashion.
Human Capital Management, Human Interaction Management and Agile are now very much in alignment. An individual associate’s goals are coordinated with the goals of short term efforts which advance both causes. The natural collaboration of an agile team and its self organization lend themselves to the treatment of employees as valued assets and ideas judged on merit. Ranking systems are an anathema to any well run organization or agile effort; in agile the focus is on the team. Rewards are made in both cases based on objective criteria; in agile that means working code – you can’t get much more objective than that. The final is one of the most important constructs: Managers facilitate employee creativity and productivity; they don’t order activity by fiat.
In summary, it is a changing world. Enterprises worried about productivity need to look to fully engaging their employees in the organizations vision. Human Interaction Management and Agile are not just buzzwords or fads they are evolved concepts designed to address short comings in management technique and organizational structure. Because we are in a Toffler third wave era demand for adaptability is progressing at an unrelenting pace. It is rapidly becoming a scenario reminiscent of the old west known as the quick and the dead.
Remember till next time, keep agile!