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Agile HR toolkit: Value and prioritization

Introduction

While it’s common for CEOs to talk about their people as their ‘greatest asset’, it’s generally a struggle for HR to clearly articulate how our people practices and operations contribute to the bottom line. Despite HR’s central purpose of helping an organization achieve competitive advantage through their people, we’ve often failed to demonstrate our impact beyond the processes that are delivered and end up being viewed as a cost centre rather than a generator of business growth.

Agile helps HR think and act more strategically, which has been a common goal for many HR leaders for some time. Bogged down by an endless to-do list and myriad processes, most HR teams crave the accolade of being seen as a value-adding function. In this chapter we’ll look at how HR can build a strategic portfolio of work by using different definitions of customer and business value to guide their prioritization. We’ll also share practical tools that assist HR teams in planning and scheduling what they will deliver to the organization week on week and explain where and why they should focus their time and effort. The goal is to help HR move beyond the never-ending strategic wish-list that plagues our profession and start to demonstrate our impact through a language that successfully combines the elements of both people and business.

Defining value

As previously discussed, Agile is a mindset and method of working that is built around the concept of delivering value to the customer. Within HR this notion of value can be defined on multiple levels:

The HR value canvas is a one-page template that helps HR teams guide discussions and define value (Figure 8.1).

Figure 8.1 HR value canvas

The HR initiative, objective and vision, KPIs and definition of done.

Figure 8.1 details

The HR initiatives are:

  • Purpose and social value: that is, societal, environmental or community impact.

  • Business value: that is, strategic impact, advantage, enabler, productivity

  • End customer value: that is, service, growth, profitability

  • Employee value: that is, work, careers, wellbeing, growth.

Finally, it’s good to note that all these value drivers need to be weighed up against what is happening for the business and the wider market. It’s also important for HR to challenge senior leaders and some of their default thinking when it comes to value. For example, often leaders want to focus on short-term drivers linked to strategic value, generally at the cost of factors like employee value. Additionally, there might be a need to create a longer-term vision and roadmap for initiatives that sit in areas such as purpose-driven value. In these situations, it will be necessary to assess how to move elements of these longer-term plans forward at the same time as meeting short-term goals when managing the strategic portfolio of work.

Building a strategic portfolio of work

It’s often hard to know where to start when building the people strategy. Waiting for the wider business strategy to be ready first is generally too late and tends to lead to a reactive HR plan. Additionally, it’s vital for employee needs to be considered from the start when formulating the organizational mission and goals. HR also can’t just ask the business what they want without first offering some guidance, because otherwise the people strategy can end up too simplistic and lack some of the nuances that HR’s experience in organizational development provides. Of course, HR also shouldn’t just tell the business what the strategy is and push the plan out on to them without any consultation, in true waterfall fashion!

The limitation with all of these approaches is that they tend to view the people strategy as an end-game and a plan that should be produced on an annual basis. Instead, we encourage HR to role-model an Agile approach and view the formation of strategy as an ongoing dialogue with the wider business where we co-create the mission and goals on a continuous basis. The aim is to form an Agile HR strategic portfolio of work by following an evidence-based method that incorporates regular discussions and check-ins on business priorities, alongside an assessment of the external market, ongoing talent trends and end-customer information. We should also add to these data the regular collection of employee feedback and our own professional view on the development needs within the organization.

We recommend the following key steps on a quarterly basis to agree the high-level priorities with the wider business for the Agile HR portfolio of work. This ensures stakeholder buy-in and commitment for the main people initiatives, and the HR team can then use a weekly or monthly cadence to manage ongoing team-level backlogs and deliveries.

Assess business priorities

HR needs to constantly update their holistic view on where the business is and what the priorities are for the next strategic period. Depending on the setup of the Agile HR team (see Chapter 10 for examples), the HR leader or business partners may take a lead in these discussions with the aim of bringing the information back to the team. Another option, depending upon the team model, is for the new role of HR product owner to have these types of conversation across the business. However, it’s worth noting that in an effective Agile HR model, everyone seeks this information in their day-to-day work, continuously bringing it back for discussion and review.

The goal is to form a snapshot of the internal business environment. This includes check-ins with senior leaders, local managers, customer representatives, POs and other support teams like the project management office, tech and compliance. The following questions are a good guide to follow:

In all conversations, constantly assess priorities and ask questions such as: what is the most important initiative, and why? If forced to choose, what should be done first? It’s vital that HR are armed with information that guides backlog prioritization and can articulate why certain decisions are made, as well as what HR are going after and what will have to wait for another time (Figure 8.2).

Figure 8.2 Domains impacting business priorities

The business priorities are listed.

Figure 8.2 details

The six business priorities are: customer focus and growth targets; PMO project portfolio; financial targets plus cost savings; organisational changes, acquisitions, mergers, divestments; product line changes, opportunities and risks; and corporate initiatives.

Assess the people and culture landscape

It’s crucial to construct an in-depth picture of the internal and external talent market, as well as to review all the available internal people data to assess the health of the organization and form a view on the current people and culture position (Figure 8.3).

Figure 8.3 People and culture focus areas

The people and culture assessment are: HR-IT system, workforce and talent strategy, capabilities, performance, reward and recognition, compliance and risk and employee and HR services feedback.

Once HR has information concerning the business priorities, alongside a snapshot of the health of the organization and its people, we can conduct a SWOT analysis (invented in the 1960s by Albert Humphrey at Stanford Research Institute) on the strengths, weaknesses, opportunities and threats within the people strategy (Figure 8.4). For example, this might assess areas like talent acquisition, skills capability, employee net promoter scores and reward data, as well as diversity and inclusion and the employee brand proposition. Again, prioritization is vital here, and HR need to identify the biggest pain points alongside core strengths, to decide on the most important focus areas. Remember, we can never do it all and something will need to give.

Figure 8.4 SWOT analysis example

The SWOT analysis for business priorities and people and culture assessment.

Inspired by Albert Humphrey – Stanford Research Institute

Figure 8.4 details

The business priorities list strengths and opportunities. The people and culture assessment lists weakness and threats. Business priorities and people and culture assessment are connected by a double-sided arrow.

Offer insights

Data are only as good as the insights HR offers to the business. People analytics and HR metrics are huge growth areas in our profession, and we encourage HR professionals to invest in strengthening their capabilities in this area. It’s also useful to partner with other parts of the business that already have these skills, such as data scientists or finance. Using data to inform our position is very different from traditional HR reporting, where leadership teams reviewed backward-looking metrics such as headcount, absence levels and recruitment statistics. Instead, people analytics is about identifying the business challenges and potential pain points, alongside actionable ideas and suggestions on how these link with the business strategy. Look for how people metrics link to business activities and see what narrative this begins to form.

For example, HR may discover that 45 roles will be impacted over the coming quarter by technological change, and a shift in capabilities is required. Rather than jumping into solution mode, dig deeper first. What is the overall skills assessment of the people in these roles? What are the time, cost and effort to take different actions such as retrain, move roles or offer redundancies? Generally, the scenario that comes to light cannot be addressed with a generic solution. For example, HR may find that 15 people can easily move into new roles owing to their existing skills, while 10 have like-for-like skills and could work with the new technology, and another 10 may have the potential to retrain. Then, out of the remaining staff, five might already be a potential flight risk and another five might need to consider redundancy options.

Such findings should then be overlaid with business priorities. Does HR focus on this project in the next strategic quarter and if so, what elements are the most important to start first, and why? What is the risk if HR doesn’t act this quarter? If HR doesn’t have the capacity, can we still work on a few aspects of the project now to reduce this risk?

It’s also important to look at how Agile can help HR manage risk and which slices of value can be delivered first. For this, we need to quickly validate whether certain things are indeed possible before fully committing large amounts of time and money, as well as break larger initiatives down into smaller, more manageable chunks to lower overall project risk.

Co-create with stakeholders

As mentioned previously, strategy is a two-way process. We recommend forming a solid picture of the organization through the above steps and then inviting stakeholders and employee representatives to help prioritize the strategic initiatives. Often, it’s useful to do this first within the HR team, using some of the prioritization methods outlined below. It’s then easier to identify the gaps and different viewpoints when discussing the priorities with the business representatives (Figure 8.5).

Figure 8.5 HR portfolio example

The HR portfolio items to be defined with stakeholder are shown.

Figure 8.5 details

A 5 by 5 grid depicts the HR portfolio. The columns represent Q1, Q2, Q3 and Q4. The four rows represent stream. The cells of the grid contain notes, cross marks and other markings. A text reads ‘programs projects initiatives go do’s requirement requests recommendations’.

It’s also important to revisit our definition of value at this stage and understand which initiatives lead to a competitive advantage or end-customer benefit, as opposed to the initiatives that HR might need to just get done, such as an audit. These types of discussions help HR weigh up the non-negotiables versus the strategic goals versus the nice to haves. As we will see below, it may be necessary to rank the value of each and to develop a point system to assess what’s in and what’s out for that quarter. Remember to keep in mind the capacity of the organization to receive releases of new products and solutions each quarter from HR. Is there space and time for the employees or managers to take on a behavioural change or new tech tool? How does this link into other support functions and can our efforts and releases be synced?

Finally, all of this needs to be assessed against the true capability and capacity of the HR team. It’s good to note that we’re never able to operate at a capacity of 100 per cent and we suggest using a figure more like 70 per cent to account for holidays, sickness and business emergencies, as well as all the unplanned and unexpected work that impacts our sustainable (and healthy!) workflow. The power of no is very important in this discussion, and focusing on doing one thing well will deliver more value to the business than focusing on multiple things at the same time.

Apply prioritization tools

There are many useful prioritization tools available to Agile HR teams. Let’s review some of our favourites.

RISK VERSUS VALUE GRID

This grid, shown in Figure 8.6, helps HR teams identify and manage project risk. Generally, the definition of risk used for the grid includes the probability of the initiative failing, for example the risk is higher for more complex projects, as well as the consequences of the initiative not succeeding, for example if not getting it done increased the compliance risk for a business. When using this grid, HR teams often jump on the initiatives identified as low risk and high value, as they’re easier to get done. This is often at the cost of leaving the high-risk and high-value initiatives to later, or attempting to do them all through one big implementation. As a remedy, we encourage HR professionals to review what sits in the high-risk and high-value box first, and aim to break these down into smaller, more manageable chunks of work.

Figure 8.6 Risk versus value grid

A graph is drawn for risk versus value.

Figure 8.6 details

The horizontal axis represents risk and it ranges from low risk to high risk. The vertical axis represents value and it ranges from low value to high value. The details of the graph are:

  • High risk and high value: caps R caps V; important initiatives. Break down? Increments? How can we decrease risk?

  • High risk and low value: caps R v: Priorities decreasing risk or increasing value

  • Low risk and high value: r caps V: easy and valuable

  • Low risk and low value: r v: only deliver the compliance related or ‘must haves’.

MOSCOW METHOD

MoSCoW (Figure 8.7) is great for prioritizing the features that need to be designed and delivered for a product or service (Richards, 2007). We have also seen it used effectively by HR teams to work with their stakeholders to prioritize and decide on things like which roles to hire given a certain budget or time period.

Figure 8.7 MoSCoW method

A MoSCoW method depicts the concept of requirements.

Inspired by Dai Clegg – Dynamic Systems Development Method (DSDM), 1994

Figure 8.7 details

The details of the MoSCoW method are as follows.

  • Requirement: Is this really necessary?

  • Must have: non-negotiables

  • Should have: will make our product usable

  • Could have: select some to make product lovable

  • Won’t have: not needed, effort to build is too high versus value.

MoSCoW first identifies which features are the must-haves or non-negotiables, the absolute minimum to get the product or service functioning. Next, it identifies the should-haves, which are the features that make the product or service usable or likeable. From there, it identifies the could-have features that will help delight the users, though generally it will be impossible to deliver them all. Finally, MoSCoW identifies the features that simply don’t add any value at this stage, and while these features should be periodically reviewed when requirements change, HR teams need to say no at this time.

EFFORT VERSUS IMPACT GRID

Most HR teams find this grid (Figure 8.8) easy to use and an effective method to determine what should be delivered given limited capacity and resources. Before using the grid, it’s important to clearly define what impact and effort mean for the organizational context in which we work.

Figure 8.8 Effort versus impact grid

A graph is drawn for effort versus impact.

Figure 8.8 details

The horizontal axis ranges from low effort to high effort. The vertical axis ranges from low impact to high impact. The details of the graph are as follows.

  • High effort and high impact: real big stuff

  • High effort and low impact: waste of time

  • Low effort and low impact: quick and small fixes

  • Low effort and high impact: immediate gains.

VALUE MATRIX

The value matrix (Figure 8.9) is useful when HR teams need a system to compare the value of different initiatives and prioritize where to spend time and effort based on the overall value each delivers across the whole organization. The estimation is relative between the different initiatives, and thus not scientific, but it helps make the decisions more explicit and systematic. Remember that the value drivers should be updated according to the organizational context and that it always reflect a moment in time.

Figure 8.9 Value matrix

The value matrix shows the columns representing unique value drivers and the rows representing initiatives.

Figure 8.9 details

The details of the value matrix are as follows.

A 5 by 5 matrix is shown. The columns represent growth, employer brand, securing financing, attract talent and total. The rows represent automate requirement, employee survey, recruit product owners, restructure teams and harmonize contracts. The values are given in each cell and the last column contains the total. The values in the cells are labeled relative points and the total is labeled relative value.

FORCED RANKING

Forced ranking (Figure 8.10) is a useful sorting mechanism, which can be done using consensus or by inviting each person to rank the initiatives themselves first and then compare.

Figure 8.10 Forced ranking

An illustration shows the ranking of 5 ideas from 1 to 4.

Figure 8.10 details

The details of the illustration are as follows.

The first idea is represented by a square. The second idea is represented by a cross. The third idea is represented by a circle. The fourth idea is represented by a triangle. The fifth idea is represented by a shaded square. A, B, C and D ranking the ideas from 1 to 4. The total values from A to D are 8, 13, 11 and 18, respectively. The total of A, 8 is the highest ranking.

BUBBLE SORTING

Bubble sorting (Figure 8.11) is the least objective method and invites HR teams to compare each new item to items already in the list. The prioritization is achieved through a mixture of discussion, what evidence is at hand and gut feeling.

Figure 8.11 Bubble sorting

An illustration shows the bubbles 1, 2, 3 and 4 floating. A person realising a new item asks ‘should this new bubble be higher than NR 3? Yes or no?’ A person says ‘I think yes!’ and another person says ‘no, because’.

Other useful prioritization tools include:

Sense-check the human element

We think it’s vital always to keep this step in the process as a type of safety net to ensure that everything HR does has a human focus. Good questions to ask include:

We like to think that by following an evidence-based method and truly co-creating the strategy using stakeholder and employee input, the human element will always be represented. However, it’s always useful to play devil’s advocate at this stage and challenge your thinking.

Self-organize around agreed priorities

The outcome of all these steps is a clear roadmap on what HR will deliver and what we won’t, and helps guide prioritization discussions over the coming quarter with the wider business and, more importantly, within our own team. For example, if HR needs to take immediate action to fix an unforeseen problem, like a social media reputation scare, the choices that need to be made on what HR will stop working on or postpone can be clearly articulated if the new piece of work is taken on (Figure 8.12).

Figure 8.12 Reprioritizing the HR portfolio of work

An illustration shows different views on the priorities of the HR portfolio.

Figure 8.12 details

The HR portfolio is shown and it is burning. The views of five different are:

  • Hey, this is burning and we need to do it now.

  • Item B

  • Ok, let’s look at our portfolio and discuss priorities.

  • Item A; this is important can HR do this in Q2.

Working with a backlog

At a strategic level, people initiatives and business-as-usual services are prioritized based on business value and visualized through a portfolio of work. This high-level vision then feeds directly into team-level and project-based backlogs, where decisions on how to get things done on a day-to-day basis are made by the teams. Transparency of information is central to these ways of working, and, as we saw in Chapter 5, work is pulled from the backlog by the team based on customer value, skills and capacity.

Many Agile HR teams who now use a prioritized backlog to manage their work talk about the credibility they’ve gained with the wider business as a result. By using a transparent and openly shared backlog, both senior stakeholders and employees can quickly gauge where an HR team is at and what their focus is. When combined with other Agile ceremonies like internal customer demos and planning sessions, everyone from the business should be able to track the choices being made on where and how HR spend their time.

Every HR initiative should also clearly state when it is done and what the expected outcome will be, ideally specified with associated metrics and KPIs where possible. HR teams should also integrate their main KPIs with business goals and ensure that these are based on outcomes rather than just activities. For example, rather than stating that HR will deliver five sales development training programmes next year, we instead set a goal to grow the strategic customer base by 10 per cent.

Definition of Done (DoD) is also a great conversation to have with the business when prioritizing. It’s often surprising how much less they need in our products and services when we test essential requirements with people from the business. HR too often wants to design something that is perfect, when the business wants something that works. Agile HR also needs to embrace the Agile feedback loop to continuously validate the value being delivered and reassess ongoing backlogs. Once slices of value are ready, they should be reviewed with stakeholders and users, to ensure work is indeed done and to check whether any improvements and updates need to be added.

By working with backlogs, HR becomes much more concrete and action oriented, and we turn our often quite fluffy topics, like develop a growth mindset or develop leaders of the future, into actual tasks which are then assessed by the associated acceptance criteria and our DoD.

Conclusion

By clearly defining the value that each people initiative and BAU service delivers to the organization and then using this to prioritize where HR spends their time and effort, we have an opportunity to revamp our profession into a value-adding function rather than a transactional service. We encourage you to try out the tools and techniques discussed in this chapter and begin to build effective methods that help turn our never-ending HR wish-list into targeted pieces of work that deliver a shared value across the business, to our people and to the end-customer.

References