Separating value management from personnel management

This article is primarily about separating value management from personnel management, though it has grown into a more general discussion into the roles of managers.

I like the concept that separates people management roles from work management roles. I got a lot of kickback for saying that. Sure, matrix management has been tried for decades, and many suffered. Just as they suffer now when old-school management tells everybody to be Agile within a conventional organisation and changes nothing about how it is managed. That doesn’t mean the concept is flawed, only the execution. I had a great experience of working in a matrixed organisation in 1986-7. And sure McKinsey are calling it Helix now. Jurgen Apello blew that to bits, but at least it is surfacing the concept again. Scrum@Scale has a similar concept, separating the “what” (the work) from the “how” (the ways of working), with different people accountable for guiding each for teams.

It can work in the right culture. As well as the kickback coming from people’s negative experiences of matrix management, I think when readers see “manager” it triggers their trauma of experiencing 20th Century management. I’m imagining a very different Open Management here: invitational, inverted, inclusive, transparent. Seen through a teal lens, it’s a different matter. So we continue to use the word “management”, not do away with it. My organisation works to change the management not to tear it down (even if that has happened a couple of times with clients). Evolution not revolution. Change from within, don’t assault the walls. We help management move from command-and-control to gardeners and pilots: better ways of managing.

Note: Our definition of a manager is one who manages the resources made available to them and the people working with them to achieve outcomes asked of them.

We avoid the word “leaders”. Leadership is an intersecting set with managers. Our definition of a leader is one who influences others in a group setting, usually in a particular direction. Executives should provide leadership, and some managers should too, but non-managers will also lead, and (in a large organisation) most managers are not leaders. Leadership is a behaviour. Management is a role.

“Leader” is also used to refer to the boss, the executive manager. We try not to use it that way.

Our model of managerial roles looks like this:

Let’s unpack it:

Personnel management

Somebody needs to look after employees on the organisation’s behalf: to be responsible for whether staff flourish, get what they need, and grow as they wish. A pastoral role. They also need to curate staff: keep records, organise resources, coordinate. And sadly, somebody needs to deal with staff who have failed to meet standards of behaviour.

Some argue that personnel management shouldn’t be thought of as management at all. Managers control owned assets. It is the capability that is the resource not the human. We don’t own the resource, only rent the right to use it from the person (despite the behaviour of many managers to the contrary).
So what words to use for people managing? Steward. Foster. Nurture. …?

While I love the analogy of a gardener – we use it – I’m a little hesitant about the asymmetric nature of the relationship. A gardener is not a servant. The gardener can pull a plant out and throw it on the compost heap. It’s not a model that fosters psychological safety.  It is widely used but I recommend not using it at work, nor even thinking that way. The concept of a servant is healthier. It is true that some managers will hold the power to fire people, but in a higher culture that should be a separate role that executes the task once the community has agreed to eject the individual. But I digress.

For the purposes of this post, we will stick to personnel management.  We want to emphasise that the roles of conventional management should be separated. That’s not to say that we shouldn’t call it something different in the field. “Stewarding Capability”.

We should talk about the relationship between personnel managers and HR, Human Resources. Before we do, let’s bury that name. People aren’t resources. The resource is human capability and knowledge. It is owned by people, who we pay to rent it to us. When they leave they take it with them, which is why it is so stupid to throw them overboard every time profits dip, or to burn them like fuel anytime. We prefer now to call the function Human Relations. Or some like “People and Culture, P&C”. Or even “the Personnel Department” is better than Human Resources.

Personnel managers may be part of P&C as their organisational hierarchy, or they may be independent of it – as geographic organisational units, or products, or anything. As we said above, this model is not about organisational structure, it is independent of that.

Value management

Equally, even in the most agile holacratic organisation, value management still has a place. There is still a role for product managers, service managers, project managers, and similar functions. Managing value covers:

• products and services
• portfolios, programmes: collective backlogs of work
• units of work with specified deliverables: projects, initiatives….

Authority is delegated or distributed via value management. It is the authority to do work, not to order people around.

The origin of the word “manager” is in the handling of horses, from where it became the handler/trainer of workers, to then be a boss in a power bureaucracy. In current usage it has long since lost the link to personnel management; we have “managers” of every aspect of an organisation, from security to service to sanitation. When I talk of a work or value manager, there is no implication of being a boss of people (even if that is one of the main dysfunctions of contemporary project management). In a modern organisation, managers don’t get to tell and yell. Command-and-control is gone. Management is a collaborative function: inviting collaboration, engineering consent, and inspiring action. Management should observe, navigate, and facilitate. Think of a value manager as a pilot, in the sense of ships not airplanes: in the bridge, guiding those running it.

Even a personnel manager should exercise minimum authority, only in situations where the employee’s behaviour is unacceptable to the community of the organisation (note: standards of behaviour should be set by the group, not imposed by some remote governor). My favourite term is “flip the hierarchy”. This what I meant by “inverted” above:

Separation of personnel and value management

• Personnel managers manage why we work: motivation, incentive, growth.
• Value managers manage what we are working on: the production of value.

Two sets of servant managers looking after the organisational responsibilities of caring for employees and getting the work done, in collaboration with self-organising workers. As much as possible, the workers themselves manage who-and-how they do the job, except where it needs to be defined by the value manager or by a function manager (see below).  An organisation has a responsibility for the welfare of its employees, collectively and as individuals; and a responsibility in what it produces to serve the needs of all stakeholders, including customers, owners, employees, governors, and society. The two kinds of managers separate those responsibilities. Personnel managers talk to value managers about what their people need personally (growth opportunities, accommodation for personal life needs, …) and value managers talk to personnel managers about what kind of people and capabilities the organisation needs (recruiting, development, …).

People should have a long term relationship with their personnel manager and a dotted line to the value manager they are currently doing work for. Asking a manager to do both is unfair on the manager and the employee because:

⭐ They require different skillsets, even different personalities and behaviours. Play to an individual’s strengths, don’t force them to build their weaknesses. “T-shaped” people are great but don’t make the shallow parts of the “T” part of their core role, especially if the lives of others will suffer as a result.

⭐ Their relationship timeframes are different. A person’s value manager can change as often as the fluidity of work dictates. Personnel management should be a long term relationship, getting to know the person, their aspirations and needs, the back stories and the history.

⭐ Value management is usually more urgent so personnel management suffers.

⭐ There is more glory in delivering value than looking after employees.

⭐ They should report to different areas and have different (sometimes conflicting) goals. Resources and products are different parts of the organisation. The resources of an organisation are capability (not humans or even “talent”), money, and information. Their owners are intent on growing and caring for them, the gardeners. The owners of the products and services are intent on maximising their value to stakeholders, by doing value-creation work with the resources.

⭐ As a result their expectations of the employee can conflict. Unfortunately the world has polarity tensions e.g. the need to meet the deadlines vs the team are burning out. It’s not safe or transparent to make one manager resolve that inside themselves. Unreasonable systems make unreasonable people. Until we attain a Teal organisation, managers will always have unreasonable pressures to deliver that drive the best people to sociopath behaviours. We have all seen it. By having separate roles accountable for each, the conflict is resolved publicly. How amicably that happens depends entirely on the health of the culture.

A person can do managing people, managing value (results), or doing work. Generally, any combinations of those three roles overload one person.

In future, the world will increasingly separate value management from personnel management. This isn’t a new idea. It has been around forever in various forms. We have tried these ideas in the past. What’s new is that workers aren’t owned resources. They’re free authorised adult knowledge workers who are invited to accept work according to their team’s capabilities. It makes very good sense and fits exactly with where Open is going. As the expectations of people management increase (jobs customised to the individual, personalised development, welfare pastoral care, psychological safety…) this separation is the future. Value structures may change fluidly all the time, but let’s keep people structures stable so that personnel managers get to know their people.

It is not specialisation; it is recognition that they’re different things with distinct skillsets. An incident manager is not a training manager just because they are both called manager. The kind of person who is really good at getting a programme of work done is often not so good at caring for people.

As we said, the objectives of value and people management can be in conflict. The drive to get work done may not always be in the best interests of the people involved. It is not fair to make one individual manage this conflict. “Skills not roles” means that perhaps these capabilities can sometimes be combined in one person,  when a management team self-organises the work amongst themselves. Just as often, a manager will be happy to be able to focus on one and not have to do the others that are not a personal strength.

The group a personnel manager cares for is not the same set of people as the group a value manager organises. People management and value management would divide the organisation up differently. The value groupings would be more dynamic that the people groupings. In a perfect world, people would choose what they work on, and choose who looks after them.

Managers are themselves employees doing work, so they too have a value manager and a personnel manager, and they are in teams and guilds. (A common deficiency of management “teams”, e.g. Senior Leadership Team,  is that they aren’t a team).

In addition, the model recognises other forms of management. Because we define managers as servants, we are comfortable including coaching roles here. Centralisation is not inherently wrong, only centralisation of authority is. Centralising attention, orchestration, curation and other activities is often a good idea.

• Function managers manage a specific area of the organisation, e.g. a process or a facility.
• Organisational managers run the big picture, mostly executives.
• Scrum masters (or whatever you call them) coach the teams in ways of working.
• Ri masters of the craft (we use the Shu-Ha-Ri model) coach guilds in ways of doing the work.

The worst thing you can do to an expert, a master of the value, is make them a manager, of any kind. It requires quite different skills and drags them away from passing on the knowledge and advancing the work. Usually we only do it to them because that’s the only career path we have for them. And they always get sucked back into helping with the work on top of their day job.

This is not a matrix of hierarchies. The only one of these roles that has anything like people “belonging” to them are the personnel managers who are responsible for them. All roles – executive, value, personnel, functional, coach – are servant managers: gardeners not commanders. We can draw that inverted hierarchy in this way:

As well as being managed by a value manager and a personnel manager, a person is in a team.  Agile teams are self-organising, they don’t have a manager.

Teams often self-organise around a leader. Other times they just work collectively.

We can stop imposing managers on teams but we still need to manage programmes of work, functions of the organisation, assets etc…

Many teams will have a coach to provide guidance, their “Yoda”. This should not be a management role, or a team leader. That destroys the ability to coach effectively because of the asynchronous power dynamic.

A person may also be in a guild, or chapter, or community of practice, or whatever you choose to call a group with common skills. That group will be coached by a master of the craft.   It should have a chair or organiser, often the master, but it is not an opportunity to impose another manager.

I think it is a good model. It is in the spirit of distributing authority, liberating workers, avoiding monolithic hierarchy, and simplifying roles. It succeeds when the organisation has reached a certain level of cultural maturity, able to separate management functions without the dysfunctions of siloed communication breakdown, territorial disputes, and ego power struggles. The model above summarises the necessary conditions of work, management, culture, and organisation. That is beyond the scope of this article. Helping an organisation find such a culture is what we do successfully at Teal Unicorn. The key to our success is changing how management manage, and this model is a useful part of that growth. Don’t let 20th Century experiences sour your consideration of it in a healthier context.