Ulrich’s ultimatum

Monday, 28 April 2014 00:00 -     - {{hitsCtrl.values.hits}}

It was refreshing to hear the brief visit of Prof. Dave Ulrich to Sri Lanka this week. I recall meeting him a few years ago and facilitating a live session via satellite during the National HR Conference last year. I will look forward to hearing something new on the HR way forward from Prof. Ulrich this Wednesday. As a preamble to that, I thought it is useful to reflect on his recent thoughts on HR, especially what he wrote in his newest best seller, ‘HR from the Outside-In’. Overview We are in a changing world. In the wake of a rapidly changing business context, the need to have a different skill set also would arise. “Since 1987, our research has identified the skills that determine effective HR professionals,” says Dave Ulrich. According to him, the research has a strong empirical foundation with rigorous statistical analyses, a global sample, a measurement approach focused on personal and business performance. The data on HR professionals had been collected in partnership with many leading HR professional associations. This has resulted in global data from over 20,000 respondents and 650 organisations. This data comes from line managers – HR and non-HR associates who rated HR professionals on 139 behavioural and knowledge-based competencies. Based on the research, Dave and his colleagues have summarised the patterns found into three spheres of influence of HR work. (This is shown in Figure 1).
  • Individual: What high-performing HR professionals do as individuals to build effective relationships and reputations within their organisations?
  • Organisation: How effective HR professionals design, develop, and deliver HR systems and practices that enable organisations to create capabilities, manage change, innovate and integrate HR practices, and deploy HR technology?
  • Context: What respected HR professionals do to ensure understanding of the external trends and realities facing organisations, and responsiveness to external stakeholders?
With this as background, each of the six domains of HR competence captures the role and responsibility of HR professionals in creating value. Critical competency one: Being a strategic positioner High-performing HR professionals should think and act from the outside-in. As Ulrich explains, they are deeply knowledgeable of and able to translate external business trends into internal organisation decisions and actions. They understand general business conditions including social, technological, economic, political, environmental and demographic trends that affect their industry and geography. They target and serve key customers of their organisations by segmenting customers, knowing customer expectations, and aligning organisation’s actions to meet customer needs. They also co-create their organisation’s strategic response to business conditions and customer expectations by helping frame and make strategic and organisation choices. A consequence of outside-in thinking is the increased tendency for organisations to choose functional (line) executives to lead their HR organisation. For example, Shira Goodman, Head of HR for Staples, was previously Head of Marketing. Christian Finckh, CHRO for Allianz, the global insurance company, was Chief Operating Officer of the asset management business and began his career as an M&A attorney. We see many such examples in Sri Lanka as well. These line leaders coming into HR may indicate the need to infuse the function with a stronger business focus so that HR can play a more strategic role. The simple argument here is that they bring a wider array of exposure in business and they know how to utilise human resources in line with acute business needs. Sri Lankan HR professionals demonstrate an increasingly higher tendency with regard to being strategic. This is particularly true in the private sector, especially in the multinationals. Yet, there is a long way to go. Critical competency two: Being a credible activist Credibility comes when HR professionals do what they promise, build personal relationships of trust, and can be relied on. As Ulrich says, being a trusted advisor helps HR professionals to have positive personal relationships. As an activist, HR professional should have a point-of-view, not only about HR activities but about business demands. As activists, HR professionals learn how to influence others in a positive way through clear, consistent, and high-impact communications. Some have called this HR with an attitude. HR professionals who are credible but not activists are admired but do not have much impact. Those who are activists but not credible may have good ideas but will be ignored. To be credible activists, HR professionals need to be self-aware and committed to building their profession. In Sri Lanka, we can find several good examples. Large apparel giants, who sustained the impact of the GSP Plus withdrawal, have had their HR professionals showing their utmost contribution as credible activists. Critical competency three: Being a capability builder Here, the need is to define and build its organisation’s capabilities. As Ulrich observes, an organisation is not a structure or a set of processes, but primarily a distinct set of capabilities. Capability represents what the organisation is good at and known for. HR professionals should be able to audit and invest in the creation of organisational capabilities. These capabilities outlast the behaviour or performance of any individual manager or system. Based on Ulrich’s study, capabilities have been referred to as a company’s culture, process, or identity. HR professionals should facilitate capability audits to determine the identity of the organisation. One of the emerging capabilities of successful organisations is to create an organisation where employees find meaning and purpose at work. This is the basis for employee engagement. The International Labour Organisation (ILO) is one global case in this regard. Working closely with the senior management team, the HR leadership has made a significant investment in building accountability as an organisational capability for the future. HR has been in the forefront of enabling the organisation to enact a more results-focused, performance discipline. Sri Lankan HR professionals in the IT sector have this task more acute than any other sectors. In a field where knowledge is rapidly becoming obsolete, building capabilities is a vital aspect of business. Critical competency four: Change champion This has been a needed competency for many long years. “HR professionals make an organisation’s internal capacity for change match the external pace of change,” observes Ulrich.  As change champions, HR professionals help make change happen at institutional (changing patterns), initiative (making things happen), and individual (enabling personal change) levels. Ulrich cites Walgreen as a global example. It has Kathleen Wilson-Thompson as a recently appointed Head of HR. Kathleen and her team worked hard to understand the key business challenges facing the increasingly competitive market, and built the business case for increased emphasis on leadership development. Their work has resulted in a significant long-term organisational investment of time and expense but also a strong agreement among the senior management team that the effectiveness of current leaders and development of the next generation of leadership is fundamental to the organisation’s performance. Sri Lanka has many success stories of HR professionals driving change. How a local subsidiary of a global tobacco giant transformed itself from a labour-intensified, low productive and conflict-heavy work environment to a lean, productive and peaceful environment is a well-known case. Converting a predominantly manual operation into a high automated system, whilst changing the nature of required skill set has been another common local challenge. Critical competency five: Human resource innovator and integrator HR professionals must be aware of the latest insights on key HR practice areas related to talent sourcing, talent development, performance accountability, organisation design, and communication. As Ulrich advocates, they must also be able to turn these unique HR practice areas into integrated solutions, generally around leadership brand, that match business requirements on a global scale. “Effective HR professionals  help the collective HR practices to reach the tipping point of high impact on business results by ensuring that HR  practices are focused with discipline and consistency on a few but centrally important business issues,” says Ulrich. I think we have an acute issue with this competency in Sri Lanka. As some of the CEOs lament, “my Head of HR knows HR, but not the business.” There is a key requirement for innovating HR practices directed at business improvements. Critical competency six: Technology proponent HR professionals can no longer be low-tech. At a basic level, HR professionals need to use technology to more efficiently deliver HR administrative systems like benefits, payroll processing, healthcare costs, and other administrative services. In addition, HR professionals need to use technology to help people stay connected with each other. This means that technology can be used to improve communications, to do administrative work more efficiently, and to connect inside employees to outside customers. An emerging technology trend is using technology as a relationship building tool through social media. Leveraging social media enables the business to position itself for future growth. HR professionals who understand technology will create improved organisational identity outside the company and improve. Sri Lankan HR professionals should capitalise on this growing trend of having more Facebook and LinkedIn fans. Way forward Sri Lankan HR professionals should critically look at their current level of above six competencies. It is not blindly following what Ulrich says, but to appropriately adapt to suit our requirements. As I mentioned to Prof. Ulrich when I met him in Sri Lanka, we need to be more culturally sensitive and socially responsive. Whilst having a blend of tradition and technology, what is required is to deliver results. Ulrich’s ultimatum will be urgent for all HR professionals in such a context. (Dr. Ajantha Dharmasiri works at the Postgraduate Institute of Management. He can be reached on ajantha@pim.lk or www.ajanthadharmasiri.info.)

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