Agility 2.0 needs Workforce 2.0: Preparing for the Future of Work

An agile and adaptable workforce is one that is able to quickly respond to changing market conditions and stay ahead of the competition. To achieve this goal, companies need to embrace a new set of principles and strategies: what we’re calling Agility 2.0.?

But agility needs Workforce 2.0 to come to fruition, which emphasizes the need for the development of flexible work models and flexible workers who can thrive in a rapidly changing environment.?

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Let’s jump into some of the core ideas we explored surrounding Agility 2.0:?

Agility 2.0 needs Workforce 2.0? ?

In this ‘BANI’ (Brittle, Anxiety-inducing, Nonsensical and Incomprehensible) world, risks are getting harder to predict. Cyber, climate, digital, and people risks – to name a few – are combining in new ways. And our memories are short, which doesn’t help us to take past learnings forward and plan ahead. Case in point: in the last ten years, executives have predicted ‘risk of a pandemic’ twice, according to the @World Economic Forum’s Global Risk Report; once the year after the Ebola outbreak and once the year after Covid. This year, ‘risk of a pandemic’ didn’t make the top 10 globally. Clearly, it’s still a challenge to anticipate diverse risks and agility without anticipation is really just fire fighting. Something we’ve all had to do too much of lately.?

We all know that agile ways of working can create capacity in our system to better respond to risks, and bring efficiency as businesses more effectively flow talent to work. Now, Agile is not new. But Agile 1.0 struggled to succeed for a number of reasons, including:?

• Agile 1.0 simply replaced old structures with new structures, yet the mechanics were the same. This meant a lack of empowerment for workers, while a lack of trust between employers and the workforce hindered successful Agile adoption.?

• Too much focus the processes rather than the outcomes. Businesses got bogged down in the complexities of, for example, scrum methodologies. We lost the bigger picture and ?the broader goal along with it.?
• Information overload, where autonomous teams were overwhelmed by information overflow (given that information is abundantly available now and teams felt the need to share lots of information).?
• Alongside giving more autonomy to teams, Agile 1.0 aimed to democratize accountability. The trouble is, when everybody is accountable, no-one is accountable. ? ?

So, how does Agility 2.0 change things?? ?

If Agile was lacking from its inception, we need a new model. Agility 2.0 needs to reflect the fact that what was once stable is now unpredictable, that resources are stretched and people are exhausted, and that we have this challenge with predictions and anticipation. But by taking the learnings from Agility 1.0, businesses can strike the right balance.?

Things to consider include:?

• Information flows: Build customized information flows as part of design exercises. Give some structure and steer, rather than falling into the trap of a ‘dictatorship of experts’ in a hierarchy, or inefficiencies in the gathering and assessment of information due to too much autonomy.??
• Decision-making: Redesign decision-making processes into a combination of individual responsibilities, decision-making bodies and empowered team members. Team-wide democratized decisions can slow work down.??
• Structure: Establish a mix of roles and autonomous teams as part of a structure based on information flow and decision needs, alongside the individual’s skills and preferences.?

When designing Agile 2.0, keep these Truths in mind:? ?

We need to stop ‘doing’ agile and instead learn to ‘be’ agile. This rests on the people in our workplaces and the work operating model that supports their activity. After all, success will depend on workforce energy and their ability to run with the agility agenda. With that in mind, there are some fundamental truths to remember:?

1. The changing Lifestyle Contract means a new rhythm of work is emerging??

People’s relationship with work has shifted. Employees today want to work with their employer, not for them, while maintaining growth in their work and personal lives and feeling they are part of a broader mission. Hello contributors, goodbye employees needs to become our mantra. This is a shift compared to what we at Mercer called the ‘engagement contract ’, which dominated workplaces pre-Covid.?

1. The pay deal is struggling to reward agility?

Many contributors believe that it doesn’t pay to stay – that it is often better to switch jobs than stay with their employer. And if we consider the differences between new joiner pay and stayers’ pay in non-union countries, they might be right. We’ve also seen a rise in strikes and calls for higher pay and headcount. The annual outside-in pay models of the past are not nuanced or sophisticated enough to reward agility.?

1. Workforce energy is a finite resource?

People are increasingly stressed out, burned out and quietly quitting. In response, businesses need to be intentional about assessing capacity and employee energy to ensure their talent pipelines are not brittle. As architects of the future of work, businesses will need to adapt to the new rhythm of work, re-evaluate and evolve pay models, and create healthy, sustainable organisations.

Moving forward with Agile 2.0? ?

If businesses get the above fundamentals right, then, they can be comfortable that they’re ready for Agile. But what does that actually look like in practice? When we look at what needs to change between Agile 1.0 and Agile 2.0, we see the following trends:?

• Scope: From functionally-focused to enterprise-enabled. ?
• Outlook: From Adaptive to Anticipatory.?
• System: From Self-governed teams to team-based accountability.??

• Structure: From Agile structures to Networked systems.??
• Operating model: From Role-based to Skill-based models of work allocation.?
• Experimentation: From ring-fenced innovation to curiosity and co-creation.?
• Inspiration: From Mission-orientated to Purpose-driven.?

Therefore, to deliver value efficiently, this new breed of agile methodologies will need to be principle-centred, flexible, and organisation-wide. ?

A new model for Agility:?

Leveraging talent agility ? ?

Getting the foundations right is essential to fulfil the promise of Agile 2.0. At Mercer, we see leading businesses responding by:?

• Training managers to be better partners with their people, helping them to more effectively negotiate an ever-changing landscape around flexible working, career growth and reward changes.??
• Actively preparing for an era of greater transparency, especially around pay, given pay transparency laws in the US and Equal Pay reporting in Europe. They also recognise that without equity, people’s capacity to contribute erodes. ?
• Ensuring their talent pipeline is protected, not impoverished. Health, safety and well-being have never been more critical. A distracted, depleted or disengaged workforce undermines strategic workforce planning efforts. ?
• Taking an honest look at pace of work in their company: where time is spent, what depletes energy, etc. Following this are active steps to reduce meeting time, simplification of decision making and making asynchronous and flexible work truly work for people. There have been great advancements in modelling the impact of transformation projects on strategic workforce planning projections.?

Our research shows there are three agility levers that have an outsized impact on an organisation’s agility, allowing companies to quickly adapt to new challenges and market conditions. These are:?

• Rethinking supply?
• Accelerating skills?
• Leveraging smart working?with AI

Leaders in this space are already:?

1. Thinking about supply in a way that is less anchored to location and job descriptions. Defining what jobs need to be fixed, which can flex, and which could be fluid is often a starting point, as well as work design to challenge who does what work.?
2. Moving towards a skills-powered organisation that enables people to learn for tomorrow in the jobs of today by evolving talent practices to enable skills to be the currency of work.?
3. Driving smart working by amplifying intelligence with the use of data and AI. Generative AI is allowing businesses to rethink work and workflows. Mercer’s work redesign tool can help to quantify and prepare for these workforce changes.?

We believe that, by focusing on these three levers, companies can become more agile and better equipped to succeed in the years ahead. To achieve this, businesses will also need to create a culture of trust, accountability, empathy and equity, while being guided by their North Star. Having the right enabling culture and a purpose that speaks to all stakeholders grows in importance as we test new work models and processes. ? ?

As the world of work evolves and AI is further embedded into our businesses, companies must be prepared to adapt and change quickly. By embracing Agility 2.0 and Workforce 2.0, we’ll see the emergence of teams of highly skilled and nimble professionals who are able to thrive in a rapidly changing environment.?

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That was a whistle-stop tour of what can move the needle on Agility. If you want to hear more about the thinking behind these topics, drop me a line or check out the new book #WorkDifferent, which I wrote with my colleagues Kai Anderson and Ilya Bonic : https://www.mercer.com/insights/people-strategy/future-of-work/work-different-10-truths-for-winning-in-the-people-age/ ?