Dr. Dave Ulrich - The Future of HR

Summary

In this presentation, Dave Alich, a professor at the University of Michigan and a partner at RBL Group, outlines the evolution of Human Resources (HR) from its administrative roots to a strategic and external-facing function. He discusses the growing importance of aligning HR practices with broader business goals, focusing on value creation, stakeholder relationships, and leadership. Alich emphasizes the need for HR to engage with external factors like customers, investors, and communities, alongside internal talent development and organizational design. He also highlights the importance of HR's role in driving sustainable change through analytics and strategic alignment.

Takeaways

• 😀 HR has evolved from administrative work to a more strategic focus over the last 90 years.
• 😀 The next step in HR is to look outside the company, not just mirror strategy but use it as a window to understand external factors like customers, investors, and communities.
• 😀 HR should add value by focusing on outcomes and creating value for others, not just on internal processes.
• 😀 Understanding the context of the work (social, technological, economic, political, environmental, and demographic trends) is crucial for HR to create value.
• 😀 HR must serve a broad set of stakeholders, both inside and outside the company, including customers, investors, and communities.
• 😀 HR's focus should include three main areas: Talent, Organization, and Leadership, ensuring these are aligned with the company's needs.
• 😀 Talent management is key in HR, but it's not the only focus; building the right organization and leadership is equally important for success.
• 😀 Leadership in HR should emphasize doing the basics well, creating differentiated leaders, and ensuring sustainability in leadership behaviors.
• 😀 The structure of HR should align with the structure of the business, whether centralized, decentralized, or a hybrid approach, to maximize efficiency.
• 😀 HR practices must be integrated, aligned, and innovative to effectively support the business, covering areas like staffing, training, performance, and compensation.
• 😀 HR professionals should continuously develop their competencies, use analytics, and measure success to contribute to business growth and success.

Q & A

How has the role of HR evolved over the years?

HR has evolved from managing administrative tasks and labor contracts in the 1930s and 40s to focusing on HR practices like staffing, training, compensation, and succession planning. In recent years, HR has been linked to strategy, and the next step is to adopt an 'outside-in' approach, considering external factors like customers, investors, and communities.

What is meant by the 'outside-in' approach in HR?

The 'outside-in' approach in HR means focusing not just on internal company strategy but also considering the external environment. This includes looking at how HR can add value to customers, investors, communities, and government agencies, thereby creating value beyond just the organization.

What are the 10 criteria for building HR outlined in the video?

The 10 criteria for building HR include: 1) Adding value, 2) Understanding the context of work, 3) Serving stakeholders inside and outside the company, 4) Focusing on talent, 5) Building leadership, 6) Creating the right organization, 7) Organizing the HR department, 8) Aligning HR practices, 9) Investing in HR people, and 10) Using analytics to measure success.

Why is understanding the context of work important for HR?

Understanding the context of work is critical because it allows HR to create value by considering external social, technological, economic, political, and environmental factors. These factors impact how HR practices can contribute to the overall success of the business.

How can HR contribute to value creation for stakeholders outside the company?

HR can create value for external stakeholders like customers, investors, and communities by designing HR systems that align with external needs. For example, reward systems should be designed not just for internal goals but also to incentivize behaviors that satisfy customer expectations.

What are the three main areas of focus when HR sits down with business leaders?

HR should focus on three main areas when collaborating with business leaders: 1) Talent—ensuring the company has the right people, 2) Organization—creating the right culture and capabilities for teams, and 3) Leadership—ensuring leadership is strong and capable at all levels.

How does HR contribute to leadership development within a company?

HR contributes to leadership development by focusing on both the basics of leadership and creating differentiated leaders. This includes ensuring leaders perform essential duties effectively while also fostering unique leadership qualities that help drive the company's success.

What is the importance of organization and culture in HR?

Organization and culture are essential because they determine how talent works together as a team. A strong organizational structure and a collaborative, efficient culture are key to success, as they enable the company to meet challenges and seize opportunities effectively.

What are the different options for organizing an HR department?

There are three main options for organizing an HR department: 1) Centralized, where a single head oversees all functions, 2) Decentralized, where HR is spread across different units or countries, and 3) Hybrid, where a shared service model combines centralization with decentralized elements.

Why is it important to align HR practices with the external environment?

Aligning HR practices with the external environment ensures that HR is responsive to the needs of customers, investors, and communities. It also helps HR practices stay innovative and relevant, creating value for both the company and its stakeholders.