By | Dave Ulrich |Professor, Stephen M. Ross School of Business, University of Michigan and Partner, the RBL Group
Anyone who has been on a trip with a child has heard the endless question “Are we there yet?” At fi rst, the question captures the excitement of the child anticipating a new place. After awhile, the questioning becomes exasperating and only adds to the length of the journey.
Many in HR seem to be asking the same question, “Are we there yet?” Too often, many in HR seek but never seem to arrive at their destination. Professional conferences continue to lament HR more as an administrative service or compliance function than a business partner. Sometimes these lamentations only lengthen the journey to HR credibility. Maybe HR’s aspiration for the future is less a specifi c destination that pinpoints when we have arrived and more a direction for aspiring HR professionals to help their organizations succeed.
Most HR professionals have made enormous progress in the last few decades in their professional stature and contribution to business success. But the journey ahead should focus on the intent to deliver ongoing and increasing value, rather than striving for an end point when that value will be realized. In the spirit of simplicity, let me suggest steps in the journey ahead and discuss them accordingly:
1. One mega-message for HR’s direction: The creation of value.
2: Two components of HR’s relationship to the business: • Context: Understanding the changing business setting which redefi nes work. • Stakeholders: Recognizing and serving both internal and external stakeholders who are the recipients of HR work.
3: Three targets or outcomes of HR work: • Individuals as evidenced through a formula for productivity which is competence * commitment * contribution. • Organizations as defi ned by their capabilities more than their structures. • Leaders whose thoughts and actions embody the fi rm’s brand.
4: Four domains of HR investments:
• HR departments where strategies and structures need to be designed to deliver value.
• HR practices which need to be aligned, integrated, and innovative.
• HR professionals who must have the competencies to respond to future demands.
• HR analytics where HR investments can be tracked and monitored.
The logic for HR’s future is simple. We begin with a direction: HR should add value. This direction needs to be connected to the business, both the business context which shapes decision making and specific stakeholders around whom business strategies are created. Out of this context, HR defines targets for HR work: individual abilities (talent), organization capabilities (culture), and leadership. Finally, HR budget and people investments redefine the HR organization that makes the above happen. But he simple logic requires more detailed assessment to accomplish the journey. In this article, I want to propose “what’s next” in each of these four areas (see summary in Figure 1).