Unleashing Organizational Agility: Decoupling Work and People Management

Traditional management structures have long served as the bedrock of businesses, providing clarity around roles and responsibilities as well as decision-making for work and people. They evolved during the industrial revolution, an era characterized by mass production and a clear delineation of roles and responsibilities. Hierarchical structures facilitated clear chains of command and control. Roles were specialized, and each tier of the hierarchy had well-defined responsibilities. This design streamlined decision-making, reduced ambiguity, and ensured accountability.

With the dawn of the information age and the subsequent shift towards a knowledge economy, these same hierarchies began posing significant challenges. The rigid top-down approach became less compatible with the new realities of work characterized by complexity, ambiguity, rapid change, and the increasing value of knowledge and creativity. Multiple layers of management slow down decision-making and communication, inhibit information sharing, and restrict empowerment and innovation.

Hierarchies, not designed for rapid adaptation, nonetheless persist. According to Gary Hamel’s HBR article “The End of Bureaucracy” from December 2018, over the past three decades, the number of managers across all hierarchies in the U.S. increased by more than 100%, while the number of people working grew only by 44%. This goes entirely against the notion that we need less – not more – hierarchy and bureaucracy in a world where the need for organizational flexibility, adaptability, and agility is greater than ever.

Organizations with multiple management layers perpetuate the notion that managers “own” employees and are rewarded for delivering their specific part of the work within the organizational structure. Consequently, they lack an incentive to foster an environment that allows the right people to move to the right tasks at the right time, irrespective of structures. Yet, that is precisely what we need today – the agility to mobilize or pivot resources as required. This appears to be one of the most formidable challenges for organizations today.

For some time now, we’ve witnessed various attempts to eliminate management and create self-managed organizations, aiming to foster more fluidity, collaboration, and cross-functional work. Many of these attempts were either non-transferable or didn’t endure. For instance, Zappos and Medium, who famously adopted Holacracy, eventually abandoned or adjusted this structure as employees departed and business performance faltered. Conversely, companies like Morningstar and Haier maintain unique self-management structures that have been extensively studied, yet seem to heavily rely on specific cultural and leadership elements that aren’t easily replicated elsewhere.

Nevertheless, we must find a way to ensure that the organization is sufficiently flexible and adaptable to absorb uncertainty, withstand the shocks of constant disruption, and thrive on the opportunities they offer. Managers typically rely on two decision-making powers to control the organization – business decisions and people decisions. What if we decoupled these as a means to balance power between what is right for a specific business decision and what is right from an employee perspective?

The Case for Separation

In traditional organizations, managers are often expected to oversee both the people (team development, individual growth, interpersonal dynamics) and the work (project delivery, task allocation, performance). One common element among many of the methodologies addressing the need for an organization to be flexible and responsive appears to be the deconstruction of management.

At Spotify, each Squad has a Product Owner who manages the work and focuses on achieving project goals, while an Agile Coach (akin to a people manager) concentrates on team health and functioning. Under Haier’s Rendanheyi Model, each microenterprise operates like its own small business, with a clear separation between those focusing on operational tasks (creating products and providing services) and the enablers who facilitate employees’ success rather than controlling their day-to-day operations. As part of its Agile transformation, ING Bank in the Netherlands distinguished clearly between the roles of people leaders and chapter leads (who resemble line managers in other organizations). While chapter leads concentrate on the work – like setting priorities, making decisions, and removing blockers – the people leaders focus on supporting and developing the individuals in the chapter.

Assigning distinct individuals to oversee people management and work management tasks allows each function to specialize and concentrate their efforts for improved outcomes in both domains. Work managers can focus on the specifics of project execution, task allocation, and performance, while people managers can devote their time to nurturing team development, individual growth, and interpersonal dynamics.

Doing right by employees in terms of growth and development isn’t just an effective engagement and retention strategy—it’s also sound business strategy. One of the barriers to placing the right people on the right tasks at the right time is the difficulty in swiftly assigning people to the most important tasks that match their expertise. With a designated individual focusing on work management, organizations can rapidly adapt and respond to changes in work needs. Simultaneously, a dedicated people manager can ensure that opportunities are thoughtfully communicated and managed from the people perspective, fully utilizing employee expertise while also supporting their growth and career aspirations.

For instance, a project may require additional manpower during peak periods or a specialized skill that exists elsewhere in the organization. People managers will have more incentive to identify the employees best suited for this opportunity across the organization compared with the conventional work-based management hierarchy. While work managers will still need to negotiate the impact on resources, at least now the conversation about which work is more critical at this point can occur in a way that would have been impeded by traditional management’s ownership of resources.

Separating these roles can enhance the employee experience, boost engagement, and ultimately, retention. People managers can allocate more time to understanding individual needs, aspirations, and development paths, leading to a more personalized and supportive employee experience. The decentralization of power minimizes the risk of power abuse and fosters a more balanced, equitable work environment.

However, implementing such a model is not without its challenges. It necessitates a significant cultural shift, clear communication, and a thoughtful transition plan. Furthermore, work and people managers need to collaborate closely to ensure alignment and a cohesive employee experience. Instigating this shift often involves deep-rooted changes in attitudes, beliefs, and behaviors at all levels of the organization. Unlike a hierarchical “re-org,” this is not a one-off change, but a journey of continuous learning and adaptation. Executed well, decoupling work and people management can contribute significantly to an organization’s flexibility, adaptability, and overall effectiveness in the future of work.