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Agile HR: NextGen HR Delivery

by Jim Scully
Agile adj.
and easily

Able to move quickly

The word agile became a business buzzword


with the publication of The Agile Manifesto
over ten years ago. The Manifesto pled for a
flexible, iterative approach to software
development as a faster, more efficient
alternative to the classic waterfall method, with
its rigid sequence of cascading phases.
The word has since been used to describe a
variety of flexible and nimble management
approaches. Thus, agile has come to mean
the opposite of bureaucratic (its probably as
good as any, as there is no other official
antonym for bureaucratic).
A little bureaucracy can be both positive and
necessary. Aside from the obvious benefit of
helping to ensure legal compliance, a measure
of bureaucratic structure is necessary for
organizational life on a large or even medium
scale. The greater the organizations size and
degree of centralized authority, the greater the
level of bureaucracy necessary.
Even many proponents of agile software
development confess that there are legitimate
needs for the more bureaucratic waterfall
method. For example, large enterprise ERP
deployments would literally disintegrate into
chaos using agile methods.
Yet, no one would deny that bureaucratic
processes can waste time and slow things
down. And, in most organizations (yours?),
HR is a promulgator of bureaucratic
inefficiency.
Clearly, there is a balance to be struck. Thats
what Agile HR is meant to accomplish.
HR and Bureaucracy
Consider the following rules of bureaucracy,
paraphrased from the work of Max Weber, the
German economist who first articulated the
concept more than ninety years ago:

Fixed division of labor. The jurisdictional


areas are clearly specified, and each area
has a specific set of official duties and
rights that cannot be changed at the whim
of the leader.
Hierarchy of offices. Each office should
be controlled and supervised by a higherranking office.
Rational-legal authority. A bureaucracy
rests on the belief in the legality of formal
rules and hierarchies, and in the right of
those elevated in the hierarchy to posses
authority and issue commands.
Rules to govern performance. Rules
should be specified to govern official
decisions and actions. These formal rules
should be stable, exhaustive and easily
understood.
Separation of personal from official
property and rights. Official property
rights concerning e.g. machines or tools
should belong to the office or department
not the office holder.
Selection based on qualifications.
Officials are recruited based on
qualifications, and are appointed, not
elected, to the office. People are
compensated with a salary, and are not
compensated with benefices such as rights
to land, power etc.

While certain of these ideas may be out of step


with current times (like the prohibition of land
as compensation and official property not
owned by the office holder) these rules should
nevertheless sound familiar. After all, this is
how the vast majority of business
organizations operate today.
Creating an Agile Bureaucracy
To capture the meaning of a compromise
between agility and necessary bureaucracy,
we shall use the term agile bureaucracy. The
term may seem like an oxymoron, but think of
it as co-existence of small-scale agility with
large-scale bureaucratic discipline. The Agile
HR model achieves this blending through:
Waste Elimination (Lean);
Glocalization;
Re-Generalization;
Self-Sufficiency; and
Silo Busting.

Waste Elimination. The first step in enabling


Agile HR is to remove waste from HR
processes. If HR is loaded down with waste it
cannot be agile, similar to a ship that has taken
on too much water. The types of waste found
in HR administration mirror the classic
TIMWOOD list of wastes in manufacturing, as
shown below
Manufacturing
Wastes
Transportation

Inventory

Motion

Waiting

Overproduction

Overprocessing

Defects

HR Delivery
Wastes
Dissemination - Sending data,
files, reports, etc., that are not used
or could be accessed directly by the
user on demand
Open (unresolved) Issues Issues/inquiries that were not able
to be resolved at the point of initial
contact and are awaiting additional
effort or input to resolve
Manual Data Handling - Manual
entry, compilation, cleansing, and
distribution of data where
automation or integration is an
alternative
Delays - Hold-ups in issue/ inquiry
resolution due to awaiting
assignment or attention
Overkill - Services that the
customer does not need or value,
redundant checking and oversight,
doing for others what they can do
for themselves, etc.
Handoffs - Passing responsibility
for case resolution from one party
to another, requiring incremental
effort in documentation, escalation,
acceptance, etc.
Errors - Any incorrect or
incomplete output that requires
downstream corrective action

Glocalization. Another key to creating agility


is to think globally and act locally, as the
bumper sticker says. Traditional scale-driven
centralization depends upon standardization to
produce economic benefit. But many
organizations find it difficult to impossible to
standardize programs, policies and processes
across business units and especially countries.
Consequently, the economic benefits of
consolidation may be offset by the need for
additional labor to handle inherent variation.
The Agile HR model blends centralization and
decentralization to achieve the benefits of
centralization without the costs. This will be
explained later.
Copyright 2012, Shared Services Institute. All rights reserved.

Re-Generalization. The current trend in HR is


to remove role fragmentation that exists when
HR professionals are required to spend time
on activities outside their espoused valueadded role. Specifically, HR generalists and
functional experts who are required to touch
everything from recruiting to payroll to routine
HRIS transactions are thus obstructed from
focusing on the type of HR support that the
enterprise and businesses need.
The solution in vogue, sometimes called the
three pillar model, or simply HR
Transformation, involves dividing HR into
three parts:
Centers of Expertise to oversee
enterprise HR programs and policies;
Shared Service Center(s) to handle
process administration and customer
service; and
HR Business Partners to advance the
talent agenda of the enterprise and, if
applicable, each operating unit.
These sub-functions under the HR umbrella
are actually a type of labor specialization
based on competencies. Specialization can
yield increased productivity and effectiveness.
Yet it easily can be taken to extreme, resulting
in process silos and, thus, inefficiency. Highly
bureaucratic organizations tend to overspecialize, proliferating handoffs as well as the
not-my-job syndrome with which we are all too
familiar.
Through permeable departmental boundaries
and flexible job designs, the Agile HR model
breaks down barriers to allow the supply of
talent to flow seamlessly to the point of need in
keeping with the changing needs of the
organization.
Self-Sufficiency. The Agile HR model does
focus low-level talent on high-volume, routine
transactions and inquiries. The same
individuals possessing the skills and
knowledge to handle a variety of service
situations, as described above, should not be
principally focused on routine, repetitive tasks.
Instead, this is the work of the robust HR
portal.

The new generation of HR portals seamlessly


integrates information and transactions, so that
users can easily find what to do and, more
importantly, actually do it without logging into
another system. This is handled through
single sign-on to other systems or through
inherent business process automation, or a
combination both. The role of the portal is to
make this as simple and transparent as
possible. Otherwise, users will bail out for
help, thus defeating the purpose.
Self-service is the most agile of all service
channels. Todays worker not just the
younger ones expect to get their needs met
online. They do it at home, so why not at
work? Weve been well trained by airlines,
hotels, banks, service providers and retailers of
every variety that the best way get most things
done is to do it yourself online. But this
requires having consumer-caliber online tools;
not the clumsy, industrial-grade variety
typically seen. When the portal is as easy to
use and robust as Amazon.com, HR staffers
become helpers in situations where online
tools are not designed to handle the job,
because they require the judgment and
problem-solving ability of a human being.
People in the Agile HR model handle
exceptions and solve problems. This is very
different from routine transaction and inquiry
handling. Thus, a robust HR portal is the key
technological enabler of Agile HR.
Within organizations there also exists a vast
body of knowledge that on a given day is
barely scratched. Portals, aptly named
because the word literally means entrance, are
no longer a nice-to-have. The portal is the
entrance into the vast collective knowledge of
the organization. True, unearthing this
treasure comes with some risk, because the
ability to tightly control information and
messaging is lessened. But consider that
product manufacturers have allowed
customers to post unedited reviews of their
product for all to see. I recently came across a
flatly negative review of a product on the
manufacturers own web site. No doubt, the
company would rather have only positive
reviews displayed, but it clearly values
customer input and the power of credibility
Copyright 2012, Shared Services Institute. All rights reserved.

over the predictability of control. Back in the


70s and 80s, American auto executives were
blissfully ignorant of their products quality
shortcomings, partly because they personally
drove brand new vehicles that were
meticulously maintained by company
personnel. However hard to swallow, when it
comes to quality the truth is always best.
Internal social networks can be a vast (and
cheap) source of information within a
company. For HR, the challenge is how to
unleash this knowledge without causing
damage or legal liability from misinformation.
As internal social networks become more
prevalent and sophisticated, this challenge will
be addressed and HR should be a prime
beneficiary.
Silo Busting. One doesnt need higher math
to figure out that efficiency can be gained by
leveraging resources across organizational
silos. The Agile HR model accomplishes this
through the ability to move resources
seamlessly across boundaries to meet demand
at the point of need, thus avoiding waste
stemming from fixed supply for fluctuating
levels of demand. This is illustrated in the
graphic below.

Siloed'Supply/Demand'Syndrome'
Surplus'

Surplus'
Decit'

Surplus'
Decit'

Agile'HR'Model'

Agile'Resources'
Demand'

Supply'

Notice that in the top part of the graphic each


silo has a surplus or deficit of supply relative to
demand, a daily battle in most organizations.
Conversely, the bottom graphic depicts the
movement of resources across silos, thereby
matching supply to demand without (or at least
less) deficit or surplus.

Typical organizational models restrict this


interchange of supply through rigid
departmental boundaries and narrowly defined
job duties. Agile HR, as you will see, uses
permeable boundaries and flexible roles to
allow the organization to constantly restructure
itself in response to varying demand.
The idea of permeable boundaries is old.
Smaller organizations do it all the time, simply
out of necessity. Workers in small companies
typically dont have formal job descriptions and
are prepared to do whatever needs to get
done. This is one way in which small
organizations tend to be much less
bureaucratic than large ones.

len

xce
l

f%E

Domain Portfolio Managers are the thought


leaders and deep experts in specific functional
areas, or domains (e.g., benefits,
compensation, engagement, talent, etc.).
Commonly referred to as Centers of
Expertise, the Agile HR model
focuses these groups even
more tightly on program
strategy, design and
governance. To
Customer'
accomplish this, program
Support'
administration is handled
Teams'
by Core HR Operations,
Core%HR%
while one-time and
Ops%
cyclical projects are
resourced through Circles
of Excellence, described
HR'Business'Consultants'
next.
f%E

l
xce

len

ce%

Cir
cle
s%o

The Agile HR Delivery Model


The Agile HR model consists of five
components:
Domain Portfolio Managers
Circles of Excellence
Customer Support Teams
Core HR Operations
HR Business Consultants

s%o
cle
Cir

ce%

A well-publicized example of this is Southwest


Airlines, which learned early on that achieving
fast turnaround times, a key to its survival and
success, required workers across jobs and
departments to routinely cross these
boundaries to achieve super fast turns. Ramp
crew, gate agents and even flight crew needed
to be prepared to lend the other a hand
to meet the need. So crucial was
this practice that Southwest
considers boundary spanning
to be an operational
necessity and personal
Domain'
attribute strongly
Por*olio'
encouraged in team
Managers'
members.

Indeed, even the most traditionally managed


organizations regularly deploy teams that cross
businesses, geographies and functions as a
means of pulling resources across boundaries
to meet an organizational priority. Many other
case studies exist as well. Though not
prevalent, they are by no means revolutionary.
The Agile HR model described in this paper
merely applies this proven idea in a new
context.

Another example is W.L.


Gore, the maker of GoreTex and related products.
Wilbert L. Gore founded the
company largely in reaction to
Circles%of%Excellence%
Circles of Excellence are
the stultifying hierarchal structure
virtual organizations that come
at his employer. He saw the
into and out of existence in response to
structure preventing collaboration and
the timely needs of the enterprise. Thus,
innovation, which as an engineer frustrated
Circles of Excellence support Domain Portfolio
him. For his own company, Gore devised the
Managers, allowing these teams to become
companys famous lattice structure to
leaner and more focused on thought
facilitate the seamless movement of talent and
leadership and governance. By pulling team
information up and across the organization,
members from other parts of the HR
thus the term lattice. At Gore, leadership
organization, Circles of Excellence are
creates itself around project teams and
dynamic matrix structures as opposed to static
initiatives. This is no doubt messy at times, but
functional departments.
Gore accepts this as a trade-off against the
negative effects of a rigid hierarchy.
Copyright 2012, Shared Services Institute. All rights reserved.

For example, during annual enrollment cycles


a Circle of Excellence steps into action to
assist in this effort, rather than relying strictly
on staff from the benefits department. This
allows Domain Portfolio Managers to
concentrate on strategy, design and
governance, thus requiring less dedicated
resources than if they had to administer and
deploy programs as well.
Customer Support Teams are critical to the
Agile HR model. These cross-functional
service teams are equipped to assist
employees at all phases of the hire-to-retire life
cycle. Because of their breadth of knowledge
and skills, they are able to flex with natural
variation in employee demand. Each team is a
mini matrix structure with dual accountability to
their respective HR Business Partner
organization and Core HR Operations.
Customer Support Teams are inherently
flexible because they are service generalists,
rather than task specialists. By equipping
individual members to handle a wider array of
situations, the teams naturally stay in synch
with true demand. Breadth of skills and ability
naturally create agility. Customer Support
Teams also are a key source of talent for
Circles of Excellence.
Core HR Operations manages and delivers
centralized HR services, such as HRIS,
payroll, benefits, etc. This also is where
responsibility for deploying and managing the
HRMS/Portal resides.
HR Business Consultants, often referred to
as HR Business Partners, ensure that HR is
deployed to help the business achieve its
operational and strategic objectives.
How the Model Drives Agility
The Agile HR model itself creates agility in the
following ways:

Copyright 2012, Shared Services Institute. All rights reserved.

Waste is eliminated by minimizing


handoffs and open (unresolved) Issues.
This is accomplished by avoiding
unnecessary specialization and giving
support personnel the knowledge and tools
they need to resolve issues from cradle to
grave.

Glocalization takes the form of Customer


Support Teams aligned with the customer
organization while operating under the
enterprise HR umbrella. Circles of
Excellence are glocal in nature by pulling
talent from various parts of the HR
structure to address enterprise needs.

Re-Generalization is embodied in
Customer Support Team staff with the
skills, knowledge and authority to support
all phases of the employee life cycle, from
new hire onboarding to exit administration.

Collaboration is facilitated by a robust HR


portal, capable of bringing knowledge and
tools together for a seamless, consumercaliber service experience.

Silo Busting is practiced throughout the


model, but this is particularly so in the
Customer Support Teams and Circles of
Excellence, which are explicitly designed
with flexibility to direct resources as needed
to the point of need.

Migrating to the Agile HR Model


One feature of the Agile HR model is that it
enables organizations to tap into existing talent
without undergoing a major greenfield or
brownfield start-up. Large-scale physical
centralization is not necessarily required. The
graphic below depicts the transition of roles
from a typical current state to the Agile HR
future state.

Current'
Generalists

Agile'HR'
HR Business
Consultants

The Agile HR model offers a framework for


determining this along the lines of fixed versus
variable demand, compared below:

Fixed demand is defined by the


organizational structure, program portfolio
and non-event-driven administration. Fixed
demand, as the term implies, is relatively
stable, as long as these fundamental
conditions dont change.

Variable demand is that which is all or


partly driven by employee and organization
needs and events. Logically, variable
demand fluctuates according to the ebbs
and flows of individual and organizational
life.

Core
Operations
Admin/Ops (includes current
Shared Services staff)

Customer
Support

Domain Specialists
(i.e., CoE)

Domain
Portfolio
Management

As shown in the above graphic, transitioning to


the Agile HR model proceeds as follows:

Current generalists (perhaps called HRBPs


in your current model) either remain in HR
Business Consultant roles or become part
of a Customer Support Team.
Current admin/ops staff, including current
shared services personnel, would be part
of either a Core Operations Team or
Customer Support Team.
Current domain specialists (i.e., CoEs)
would either remain a domain specialist, as
a domain leader or program manager, or
join one of the other operational areas
(Core HR Operations or Customer
Support).

The Centralization-Decentralization Debate


Shared service initiatives inevitably spark
debate about centralized versus decentralized
control. There are bound to be questions
about what should be in scope for shared
services versus out of scope (i.e.,
decentralized or outsourced). Where this line
gets drawn differs from one organization to the
next, resulting the wide variety of shared
services models in existence.

Copyright 2012, Shared Services Institute. All rights reserved.

The Agile HR model accommodates this


variability, both in terms of resourcing and
funding. For example, different parts of the
organization generate different levels of
demand, in which case appropriate levels of
staffing and funding should be applied.
The graphic below shows the resourcing
thought process:

Total&Current&
HR&FTEs&
(minus)'

Future1State&Fixed1
Demand&FTEs&

Domain'Por*olio'Management'
HR'Business'Consultants'
Core'Opera3ons'Teams'

(minus)'

Future1State&Variable1
Demand&FTEs&
Net&FTEs&(+/1)&

Avg.'Monthly'CoE'FTEs'(forecast)'
Service'Cell'FTEs'(ra3oFbased)'

The Agile HR concept also balances the


efficiency benefits of centralized control
against the vital agility of local autonomy. To
accomplish this, Agile HR drives push-oriented
services from the center while driving pulloriented services at the business/function/
geography level. In this way, the comparative
advantages of centralization and
decentralization are exploited. The table below
offers a hypothetical division of centralized
versus decentralized HR services, based on
this push-pull dichotomy.
Push (Centralized)
Enterprise HR
Systems
Enterprise Program
Administration
Enterprise Program
Design &
Governance
Enterprise Policy
and Process
Governance

Pull (Decentralized)
Employee Issue &
Inquiry Resolution
Workforce
Administration
Employee Relations
Management
Consultation

Clearly, factors like organization size,


complexity and structure will impact which
services are centralized versus decentralized.
Talent acquisition is a clear example where the
right division of responsibilities may vary from
one organization to the next. Again, the
categorization above is offered as illustration.
Putting Agile HR Into Operation
To translate the Agile HR concept into reality
requires addressing many more detailed
questions, the answers to which will vary by
organization. Staffing levels, reporting
structure, cost allocation method, staff
selection/assignment, and many other practical
matters must be tackled on a case-by-case
basis. Such detailed matters are beyond the
scope of a white paper and would need to be
studied in the context of each organization.

Copyright 2012, Shared Services Institute. All rights reserved.

Conclusion
Agile HR is a new way of applying concepts
that have been proven effective in other
organizations and disciplines. As demands
and expectations rise, a new generation of HR
service delivery models is needed. By
leveraging the power of lean systems thinking,
the next generation of demand-driven service
delivery models can reach unprecedented
levels of cost and service effectiveness.
About the Author
Jim Scully is president of the HR Shared
Services Institute (HRSSI) and founder of the
Linkedin group HR Shared Services Network
(HRSSN).
HRSSI is a consulting and research firm that
supports clients in HR service delivery model
design and optimization. It serves many of the
Fortune 500 as well as mid-size organizations,
primarily in North America.
HRSSN is the worlds largest social network
specifically for HR service delivery
professionals. As of this writing HRSSN
membership was approximately 4,700.
Jim has been involved in HR shared services
for 18 years, both as a consultant and
practitioner. Prior to establishing the HR
Shared Services Institute in 2008, Jim was a
global shared services expert with Hewitt
Consulting (now Aon Hewitt). Prior to that, Jim
spent twelve years with Georgia-Pacific
Corporation, where he implemented and
managed HR shared services for
approximately 50,000 employees. The
Georgia-Pacific HR Service Center under Jims
leadership applied lean systems thinking to
dramatically improve service while significantly
lowering costs.
Those interested in learning more about the
HR Shared Services Institute can visit
www.hrssi.net or email Jim at
jim.scully@hrssi.net.