Organization Agility, Performance, and the Role of the HR Function

Abstract

This article outlines the essential characteristics of an agile organization and its relationship to the human resources function. Agility is an advanced and dynamic organizational capability. It allows organisations to make timely, effective, and sustained changes, to stay ahead of the competition in fast-changing business contexts, and deliver sustained high performance relative to their peers over long time periods. An agile organisation possesses four routines: Strategising (How top management teams continually refresh strategy and purpose); Perceiving (How organizations sense and act on environmental changes); Testing (How the organisation sets up, runs, and learns from experiments); and Implementing (How the organisation maintains its ability and capacity to implement changes). The results presented here suggest that the greater the number of these routines an organisation has in place, the higher the level of performance achieved.

The authors describe how HR-practices can be aligned with these routines. Depending on the people strategy, the design of the HR function, and the capability of HR professionals, HR can either help or hinder the organisation’s attempts at adaptation. As a minimum, HR systems must be fit for purpose—delivering services that support the business strategy and other systems as well as being capable of continuous improvement. In addition, agile HR systems have two additional and distinct features, including flexibility and an appropriate level of speed.

Finally, the authors consider the practical steps organisations can take on their journey towards agility. The agility routines are built on basic management practices, but it’s the ability to build an integrated system of routines and practices that confers agility. The transition to organisation agility requires a systematic diagnosis, a “whole-systems” view, and a focus on building capabilities. Becoming agile is not about implementing a one-off change programme or “transformation.” Agility requires an ongoing commitment to continuous learning and adaptation.