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July 16, 2019

IT’s quest for agility overlooks the people

By Rick Pastore  – Senior Director & IT Research Advisor at The Hackett Group

There are three main conditions that undermine a business function’s operational agility – cultural resistance to change, environmental complexity and, to a much lesser extent, skill deficiencies. Agility is the ability to perceive and respond to changes in business need with rapid decision making and execution. It has become a competitive necessity for companies and a must-have for IT organizations that want to be valued business partners. A new study by The Hackett Group identified the top agility inhibitors and validated what we suspected – agility is poor in IT and other business services functions (finance, HR, procurement). One reason is that IT is almost exclusively trying to improve by reducing complexity; it is doing next to nothing to change its culture.

Of 42 improvement practices assessed by the study, those aligned with the “human capital” component of service delivery were among the most effective. But not for IT. Although these practices address cultural resistance head-on,  IT organizations utilize them least, and have relatively poor results when they do adopt these practices, compared with their peers in HR, finance, etc. Essentially, IT is leaving people and culture out if its quest for agility.

Consider the list of IT’s Top 10 most effective practices for improving agility (below, left), and the inhibitors they target. IT’s best practices primarily address various types of complexity. The list on the right are the most effective practices for our survey respondents overall. Contrasted with IT’s Top 10, it has twice the number of human capital practices, and doubles the focus on culture change.

Source: Agile Operating Model Survey, The Hackett Group, 2019

Why aren’t staffing practices like cross-training programs and behavior role models working for IT? It could be that IT needs coaching. HR functions are applying these practices more effectively to increase their own agile operations. Why not have IT turn to them for coaching?

Another contributor to the contrast in effectiveness could be that too few IT organizations are even trying to apply human capital practices. Agile top performers, on the other hand, are much more likely to  use such practices to address cultural resistance. When we compare adoption rates of top performers versus IT, four out of five practices with the widest adoption gaps are staff related (see table below).

Source: Agile Operating Model Survey, The Hackett Group, 2019

Granted, working with people to drive culture change is way more challenging than simplifying infrastructure and processes to reduce complexity. But without accelerated adoption and effective application of these human capital practices, IT agility will continue to be handicapped by cultural resistance. IT can’t afford that if it wants to remain relevant and be seen as a transformative, innovative business partner. My advice is for IT leaders to meet with their HR counterparts and build a plan that fosters acceptance of change and instills an agile culture. Agility won’t happen without the people.