How can corporate functions become more agile?

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As global forces create the need for companies to rapidly evolve their management processes and business models, the pace of change in corporate, or general and administrative (G&A) functions, such as HR, IT, procurement, legal, and finance, have lagged behind that of the wider organization. Having spent years focused on cost reduction and efficiency improvement, G&A leaders are struggling to respond effectively to new demands—a struggle made even more challenging by poor coordination between functions, which slows decision making and hampers the mobilization of resources to the most pressing issues facing the business.

In response to these pressures, a new operating model is needed for G&A functions—one that will help them quickly respond to rapidly changing circumstances and capitalize on the promise of digital, analytics, and new ways of working.

Some organizations have already embarked on these changes in functions such as finance, but few organizations have fully realized the potential of fully embracing agile ways of working throughout their G&A functions.

What does agile look like for G&A functions?

To optimize for speed and flexibility, G&A functions should make changes that will eliminate the silos that traditionally occur between different departments. Adopting agile methods can unlock this change and drive better cross-department coordination, business–customer centricity, and strategic decision making. Agile operating models also allow G&A leaders to realign staff more efficiently toward the highest value-creating and value-protecting opportunities across the enterprise.

Agile offers a variety of approaches that can be applied to different profiles of work carried out across corporate functions. Repeatable work with clear, well-defined outcomes, performance measures, and end-to-end processes, such as in order-to-cash or procure-to-pay, can benefit from the creation of self-managing teams. For more complex work, G&A leaders can increase the agility of their organizations by adopting agile organizing principles, such as cross-functional teams and flow-to-work pools. Under this model, staff operating in organizational silos (such as HR generalists supporting a single business unit) become part of a common staffing pool, which provides dynamic resource capacity to support emerging priorities as they spring up across the business.

Flow-to-work pools do not undercut the importance of strategic business-partnering roles that remain dedicated to the business area they support—or the staff roles that focus on providing the type of business-as-usual support usually associated with G&A functions (such as financial reporting, recruiting administration, or purchasing goods and services). These roles remain critical components of G&A functions by providing a one-stop shop for problem solving, along with strategic support for business leaders (in the case of business partners) or day-to-day support through highly digitized, stable processes, often run by small self-managing teams that form the backbone of the G&A function.

As illustrated in the exhibit, staff organized into these functionally aligned, agile pools can be pulled into either small work requests that can be handled by a single person (perhaps pulling together a new type of management report), or into cross-functional teams to work on more complex priority projects that require a diverse range of capabilities. This resourcing should be revisited regularly to ensure effective progress is made toward project outcomes as organization priorities evolve.

Deploying cross-functional teams drawn from agile pools enables general and administrative functions to meet complex business challenges.

By using this model, organizations can better focus on the highest priorities and release some of the stranded capacity that can otherwise go to waste when resources are aligned to a single part of the business.

How organizations can bring agile to G&A

Successfully implementing an agile flow-to-work pools model in G&A requires interventions across four dimensions of work: scope, structure, processes, and people. The scope of work performed by agile teams needs to be clear, as not all tasks are suitable for this model; how work is identified, prioritized, assigned, and executed usually needs to be redefined; and the way people will work in the new model may require them to embrace new skills and different mindsets. The ultimate goal is to ensure that the right staff, with the right skills, are assigned to the right pressing business issues.

The most relevant aspects of agile G&A design can be summarized as follows.

Defining the type of work performed by agile G&A teams. G&A functions engage in a wide variety of tasks, from financial reporting or resolving IT queries to recruiting and onboarding staff. Some tasks, such as processing and paying vendor invoices, are best done by following a standard process; other tasks are governance and control activities that require specific expertise but little coordination with other people. That leaves a few tasks—particularly large and complex projects or novel requests, such as hiring a new role with no existing job description—requiring heavy coordination between many types of staff with differing capabilities and expertise. This third category, involving largely ad hoc work, is where agile models excel.

Prioritizing the right issues. Building issue-identification and prioritization mechanisms into regular business cadences is a critical tool for matching G&A staff to the most important work. A European telco achieved this goal via a quarterly business review (QBR) process, in which senior business leaders and G&A executives met to discuss progress against business plans, identify threats and opportunities, and generate a list of potential interventions through potential business projects. These projects were then ranked through a formal scoring mechanism that encompassed resource requirements, business criticality, and potential impact, and were matched against the available staff capacity to execute them. Finally, KPIs were established and reviewed in subsequent QBR cycles to ensure each project remained on track.

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Matching G&A staff skills and capacity to prioritize business demands. In many companies, managers have only a limited understanding of the skills their people have, and to what degree. One solution is to create a new staffing role responsible for identifying the skill profiles required for prioritized initiatives, and then assigning the closest talent matches from the agile pool to projects based on capacity. When appropriately skilled staff are not available, the initiative would be moved to a project backlog list. This approach helps balance supply and demand so that remaining resources can attend to smaller tasks by order of priority.

Promoting skill development and perpetual capability building. Staff who operate in agile pools typically seek a dynamic career path that emphasizes ongoing growth and skill development. Organizations have approached this issue by defining a comprehensive set of competencies and skill levels, which allows employees to identify what capabilities the organization values and what is required to demonstrate mastery. Career progression is tied not to advancement within a hierarchy but rather to demonstrating excellence across a specified set of capabilities. This type of progression is especially critical for flat organizations that have few layers of hierarchy, as it allows for career growth by increasing the depth of existing capabilities as well as expanding horizons to embrace new ones.

There are structural implications to maintaining a good balance between rapid assignment of staff to specific projects and providing them a home for ongoing career development. While organizations piloting flow-to-work pool concepts may initially opt to keep things simple by standing up a single pool of staff, organizing several resource pools around common skill sets creates opportunities to build connectivity with like-minded colleagues and provides mentoring and coaching opportunities to aid skill development.

Learning from successful agile G&A transformations

The experiences of companies that have successfully deployed agile models in G&A functions highlights several important lessons:

Alignment and conviction. It’s crucial that the executive team, including the CEO, are fully aligned and embrace this change. Too often, structures, processes, and change-management programs are defined in a siloed way. By contrast, agile flow-to-work in G&A functions requires flexibility in assigning resources—and opening each functional unit to the organization-wide agenda. That way resources can flow to the highest-priority needs. Accordingly, the CEO can play a crucial role in highlighting agile as a priority—even if the transformation starts small, from a single function or unit.

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Culture and change management. Creating a state-of-the-art structure will never be enough if the people in that structure do not support it by embodying agile values and principles. At the top, a C-suite member who is not a servant leader, who pushes hierarchically made decisions or protects lack of accountability within teams will most likely present a risk for the transformation’s success. In successful transformations, decisions instead involve the entire organization, with input from bottom to top. Accordingly, the right set of people at every level can help in challenging the status quo and bringing in new mindsets.

Structure, processes, and people. A common misconception is that simply launching a new model is sufficient to achieve the benefits of agility. This is rarely the case, as benefits are usually seen only with proper execution involving multiple layers. Leaders should therefore think through the following questions:

  • First, have we ensured clear accountability for resource-allocation processes across all functions? Are the project-prioritization processes in place to manage when resources aren’t available?
  • Second, do we have the right agile governance in place?
  • Third, and most important, have we set clear strategic objectives?

Adaptation and evolution. It’s important to be ambitious in change, as well as agile in adapting. For example, the COVID-19 pandemic has shown that companies don’t need to have all staff in one location and that remote-working arrangements are viable. An energy infrastructure company, for example, was highly successful in its entirely remote transition to an agile flow-to-work model.

Communication and core ambassadors. Finally, it is important to ensure adequate communication of the whole process, from the launch to the progress and changes that take place. While top-down leadership is vital, it is also important to involve the layer below the C-suite and a group of “change ambassadors,” who can mitigate people’s skepticism about the changes and smooth the transition to the new model.

While many organizations are starting to experiment with agile, others have listed a set of prerequisites that they think they need to meet. But G&A functions don’t need to wait for the rest of the organization to start their agile journey. Even small organizations can experiment profitably with agile, with a few simple guidelines helping increase the chances for successful implementation.

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