Human Resource Development: The Personnel Managers, Then and Now

One of the significant management functions of a corporation is the personnel management – human resource management. The sad reality of personnel management as traced back from the history during industrial revolution of the late eighteen and even early nineteenth centuries, though the period was considered one of the tremendous prosperities for the middle class but the affluence wasn’t evenly shared to the employees who were into back-breaking labor.

Employees before are the ones being paid, not their services. Wages of employees during this period were low, their health conditions were not in good shape and the management style were often harsh. Workers had to be always in competition against one with another and the workforce was almost totally children ages seven years old. Personnel management before was in a form of slavery and every human being was considered commodity.

When one of the employees was under-performance, the manager gets him/her out of the organization and sells to other employers in exchange for another commodity that would be something useful in their workforce. In the Philippine setting, there has been a management evolution, which consisted of the history of the entrance of Spaniards and Americans in the Philippines. Each brought in its management style to the Filipino people. Personnel managers before might be viewed nowadays as inhuman and ruthless. However, before jumping into a conclusion or labeling them, modern Human resource’s consideration for an evaluation on their performance will help assess themselves if they really are in the position to charge unfair judgment to them in the eighteen and nineteen centuries.

Personnel management during the ancient times has its own system that fits to their government condition, way of living, and the people working. The same applies to the modern management. Every period has its own system that just perfectly fits to the present condition before. Their type of personnel management can be a reflection of the past management prior to the eighteen and nineteen centuries but might no longer exactly be the same. Over the decades, because of continuous research human resource management progressed. It is because people started to get educated and discover new things that would be helpful to both organizations and workforce. Later, line upon line, precept upon precept and because of education people then started to realize slavery is not good and the only way to improve an organization.

Hence, with the help of education, and research & development, personnel management nowadays has more to do with responsible human resource management by providing what is due to the employees and avoiding unfair labor practices.

Assessing Management Teams

While working with my clients I have had the opportunity to attend a number of investment conferences and seminars where the panelists, looking down from the stage, have given hopeful business owners advice on getting their business funded. The routine is almost always the same at these events. Like Moses going up to the mountain, someone wearing a plaid shirt and jeans or a grey business suit with a high buttoned blouse, will raise their hand and ask the naive question “What are you looking for when you fund a business?” The question is naïve because; if you don’t know the answer to this question at this point you are not ready for a serious discussion with an investor. The answer that rolls off the lips of the panelists, like thunder echoing from the burning bush is often the same; “I look for Management, management, management.”

Personally, I would rather hear an answer like infrastructure, infrastructure, infrastructure but it’s the investor’s money and they certainly have the right to set their own due diligence priorities. If their primary concern during an assessment is management, then the burning question I would (and do) ask the investor after the conference becomes “How do you assess a business’s management team?” This is where I find the investor’s responses begin to sound naïve.

Let’s get rid of the first (and most naïve) answer, which I have heard from investors more than once. If an MBA or PhD is your primary criteria for assessing management, it’s a very nearsighted response. If that’s your criteria, then you might as well go ahead and add a 3.9+ GPA from an Ivy League school as well. Education alone isn’t a guarantee of success. Direct experience is a better determinant and domain experience might be more important but of course many people work in an industry for years but have never been in any form of entrepreneurial position in their life. Managing a business for years doesn’t mean you are ready to go out on your own and it’s often a recipe for disaster. What about the person with a great vision that has just patented some new disruptive technology. Their new technology will revolutionize the world but can they bring the technology to market profitably? Technologists aren’t always as successful as a Bill Gates or Steve Jobs. Should the person managing the business have a strong financial management background or marketing background or technical background? Arguments about which skill set makes the better CEO, an engineer, an accountant or a salesman have been around for a long time and there are plenty of examples to justify the pros and cons for each one. The answer is that some or all of these are criterion that is needed but the reality is that you are not likely to find all of these skills under one hat.

Management is a team effort and therefore management should be assessed as a team. Too often assessments are based solely on the Curriculum Vitae of the most senior individual. Assessing a management team requires looking at the sum of its parts. When performing due diligence on a management team, it’s important to first determine the skills needed for operating that business and then assess the combined skills of the management team against these requirements. After identifying the members of the management team, I measure each of the team member’s skills against nine operations infrastructure areas. This gives me a picture of the management team’s strengths and weaknesses telling me where there are holes in their capability. This method allows you to scale the assessment to match the criteria to the needs of the business.

Businesses that perform self assessments should consider employing a similar approach for their internal management team due diligence. This will help them greatly in prioritizing their management hiring needs. The problem with self assessing the management team is that it is next to impossible for management teams to effectively assess themselves and get un-biased results. It can become more like playing a game of liars poker! This makes management team assessment a good area to reach outside to get third party assistance.

The next time you attend an investment conference, avoid the naïve question and ask the important one; “What criteria will you use to assess our management team?” The answer should become the tablets you carry back that you should use to help position your business before you approach the investor.