In conversation with Dave Ulrich on the new roles of HR

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Dave Ulrich, Rensis Likert Professor at the Ross School of Business, the University of Michigan and a partner at The RBL Group.

Dave has published over 200 articles and book chapters and over 30 books. He has edited Human Resource Management 1990-1999, served on editorial board of 4 Journals, on the Board of Directors for Herman Miller, and Board of Trustees at Southern Virginia University, and is a Fellow in the National Academy of Human Resources. He is sharing with us his perspectives on how HR adds value to the business…

Dave Ulrich has been ranked the #1 Management Educator & Guru by BusinessWeek selected by Fast Company as one of the 10 most innovative and creative leaders is one of 21 people in the Thinker’s Fifty Hall of Fame and named the most influential thinker in HR of the decade by HR magazine.

Q- HR has evolved drastically in recent years, what is new CHRO to you? And what are the essentials of HR in a new world of work?

For decades, top CHROs have had a remarkable business impact. Today, the number of these impactful CHROs has dramatically increased. Senior business executives recognize that issues around talent, leadership, and culture are frequently the differentiators in a changing and competitive marketplace. Customers and investors are drawn to organizations with the right talent and culture. CHROs who offer unique business-related insights on these topics will fully participate in executive discussions.

Q- What do you see as the main disruptive forces that are impacting HR?

HR is affected by contextual trends that shape all businesses. At the top of the contextual trends list, technology enables digital information that changes the business model for every industry from food to lodging to automotive to health to leisure to retail to (name the industry). Coupled with social, economic, political, and demographic trends, organizations have to adapt or perish. HR’s role in creating and sustaining customer-centric, adaptive, and innovative organizations becomes ever more critical to a business.  HR –with insights and focus on talent, leadership, and culture – helps both people prosper and the organization win in the marketplace.  HR is not about HR, but about how HR issues can achieve business success.

Q- Leading the people and align them to a common goal is a challenging task, how to mitigate these challenges especially when the workforce is dominated by millennials?

Millennials are unique in how they approach work (e.g., digital natives, less loyalty to any one organization, often committed to life/work balance, etc.)  They are NOT unique in why they work, to find a sense of believing (meaning), becoming (growth and learn), and belonging (being part of a community).  When employees of any generation discover believe, become, and belong to outcomes in their organization, they will become more dedicated and productive.  One way to align to a common goal is to ensure that the common goal adds value to key customers, investors, and communities outside the organization. Employees who see the line of sight of their work and positive external stakeholder outcomes become more committed because issues of belief, become, and belong are rooted in creating winning organizations.

Q- How to build a culture that increases employee retention and promotes employee engagement at the workplace?

Often leaders look at culture as core values or the DNA of a company.  We like to define the “right” culture, being that of the identity of the firm in the mind of key customers. Traditionally culture is defined as the roots of a tree; whereas we define it as the leaves and branches of the tree that reach out to customers and investors.  This outside/in view of culture focuses on employees on winning in the marketplace.  For example, Apple or Google wants to be known for innovation; Disney for service, Tencent for adaptability.  When this external brand identity gets infused as a culture inside the organization through messages, behaviors, and processes, then employees have a more clear purpose to stay at the organization and to give their best efforts. Getting the “right” culture matters more than having a generic culture.

Q- What is your opinion on “Pay for Performance” and which are the key elements that leaders should consider while designing a compensation policy?

Pay for performance requires clarity of both terms pay and performance.  Pay is a narrow definition of a total reward system.  Money or financial rewards in any form (base, bonus, and long term stock) is only part of what motivates employees.  Non-financial issues like autonomy, opportunity, vision, community, relationships (or what is today called employee experience) also matter. And, performance matters most when “what” performance is defined: is performance narrowly defined as financial goals, or more broadly defined as the customer, employee, and community outcomes?  Charlie Tharp, whom I turn to as the expert in this space, talks about rewards signaling to employees what matters most to the company and to them.  Redesigning a total reward system requires clarity around strategy (what is unique), measures (how do we know how we are doing), and rewards (what are positive and negative consequences of meeting or missing measures), but the most important part of total rewards is the ability to have a positive and accountable conversation between an employee and boss.  The positive conversation can make any reward system work, and without a positive conversation, any system will likely not work.

Q- What is your advice to HR people for reimagining Human Resources for the future?

I keep saying over and over again, that HR is not about HR, but about the business and that the most important thing HR can give any employee is a company that wins in the marketplace.  Top companies and HR leaders have recognized this value-added logic of HR, but it is not pervasive.  HR will continue to find innovative HR solutions among HR practices around people, performance, information and work and HR will seek new ways to govern HR work and to build HR competencies.  But the foundation of value-added to all stakeholders through insights on talent, leadership, and organization will be essential for HR to achieve its full potential for impact. We are in the process of building an organization guidance system to enable this process.

Thank you, Dave!

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Dave Ulrich, Rensis Likert Professor at the Ross School of Business, University of Michigan and a partner at The RBL Group. He has published over 30 books and 200 articles/chapters that have shaped the fields of leadership to deliver results, of organizations to build capabilities, and of human resources to create value where he is the known as the “father of modern HR.” He has been named a top management thought leader in Business Week, Fortune, Financial Times, The Economist, and People Management, and is the recipient of many awards, including a Lifetime Achievement award from ASTD (now ATD).

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