Perspective, outcome and transformation are the three things HR needs to focus on most in order to develop and drive change within the profession, according to Ross School of Business professor, Dave Ulrich.
HR has come in for a lot of criticism in the past, and Ulrich said it was more important that any such criticism be constructive with a view to helping improve the profession through change with these three focuses.
“Some prophets see what people do wrong, and tell people they are damned and are going to hell,” said Ulrich, who was speaking at the 2015 AHRI National Convention and Exhibition.
“Other prophets see what people do wrong, and give them a pathway to heaven.
“HR are the architects of [organisational change]. We control the rights and opportunities for companies to succeed.”
Ulrich said HR needs to build itself from the outside in, which is “all a matter of perspective”.
There are two things that management needs to understand intrinsically in order to do this: context (the political, social, economic, natural, financial and operational environments a business is in), and stakeholders (the customers, investors and communities).
The perspective of HR needs to go through four stages, said Ulrich: administrative utility, functional expertise, strategy, and then outside/in.
Each stage was a prerequisite for the next, and by moving through each of these stages, with an understanding of context and stakeholders, he said HR can then start to build itself from the outside (not the inside).
In order to do this, Ulrich said the business needs to ask questions from an external perspective about each facet of HR:
- Staffing: Are our employees the employees of choice for our customers?
- Training and development: Are we involving the customer in designing, delivering and attending training and development?
- Performance management: Do our standards for effective performance management match customer expectations?
- Rewards: Do we involve customers in allocating rewards?
- Communication: Do our communication tools link employees and customers?
- Leadership: Do we have a leadership brand connected to customer expectations?
- Culture: Does our culture have the right events, patterns and identity?
Focusing on outcomes
Once the perspective of the company is “outside in”, Ulrich then said to move onto the three outcomes of effective HR: talent and people, culture and teamwork, and leadership.
In the past decade, HR has been inundated with new talent and potential, however, he said that relying on talent alone will not bring success or change.
He gave the example of the number of times the best actor/actress in the Academy Awards is also in the film that wins best picture (it’s only about 20 per cent).
He said this is because teamwork and culture, as well as talent, are required to succeed – and leadership is the synergy between these two outcomes.
He provided a recipe to change the culture of the business, and this starts with defining the desired culture and defining values.
Value is defined by the receivers, so businesses need to ask three key questions of their stakeholders: Are these the values you want? What do they mean to you? And, are these values going to help you buy more from us?
After that, he said businesses need to make these real to employees, through a top-down intellectual agenda, a bottom-up behavioural agenda, and a side-to-side process agenda.
The last step in this process is brand leadership, according to Ulrich, because he said leaders shape talent.
The transformation process
Transformation is the last step Ulrich spoke about, and he explained that there are four areas HR needs to focus on in order to inspire change and bring about effective HR transformation.
The four areas are differentiating between transactional and strategic work, matching HR structure to organisational structure, making sure the HR organisation follows the flow of professional service-orientated organisation, and focus on relationships.
This last point is perhaps the most important function of HR, according to Ulrich: “If the family isn’t getting along, buying a new TV and a new couch is not going to fix the problem,” he said.
To create effective relationships, it is important to share a common purpose and create overall measures, and he said HR needs to respect the differences of peers, focus on strengths and express appreciation.
By managing expectations, clarifying decision rights and managing conflict, he said HR can effectively govern, accept and connect within the process of building and managing relationships across a business.
While it may seem obvious, Ulrich said a simple thing to do to strengthen any relationship is to care for the other person, including celebrating and delighting in their successes, defending them and turning to each other.
These steps were simple but important steps in helping “grease the wheels” of transformation and improve the overall growth of both the HR function and the organisation, said Ulrich.