By | Dave Ulrich | Speaker, Author, Professor, Thought Partner on HR, Leadership, and Organization
What do my experiences in the last few weeks have in common?
At conferences for senior executives (e.g., World Economic Forum, World Business Forum), recent topics include: disciplined people practices, managing talent, goal setting and performance management, transformational leadership, resilience, inequality, collaboration, and so forth.
In doing reviews of 2022 and previews of 2023, many thoughtful colleagues are making lists of their HR agenda: employee experience, social responsibility (ESG, DEI), skill-based organizations, digitally enabled HR services, retention and removal of people, people analytics, and (fill in the blank).
In a recent webinar, I asked participants to answer two questions:
1. In the last few days (weeks/months), what have been your priority topics (things you are working on as a company or individual)?
Answers: talent, talent review, employee engagement, great resignation, headcount, improving leadership, sharing our vision, annual salary increases, DEI
2. Who have you been having conversations with about these topics?
Answers: HR team, business leaders, employees
What do these (and similar experiences) mean?
Few question the increased attention to and proliferation of “HR issues” by business leaders. Many of the issues in today’s dialogues (e.g. skills-based organization, great resignation) are extensions of previous discussions (e.g., competence models, turnover). Like other fields, HR may be prone to fads, quick fixes, and shiny objects, or the “initiative du jour” where re-labeling and re-packaging occurs.
So, how can business and HR leaders avoid quick fixes, evolve ideas, and cumulate ideas so that they have more sustainable impact?
Let me suggest three steps for making progress.
1. Create a taxonomy (or typology) to classify “HR” work.
Classifications or typologies affect daily lives and make choices easier by organizing separate items into categories:
- Using restaurant menus with food categories to place an order (appetizer, drinks, main course, dessert)
- Accessing libraries or bookstores by types of books in fiction (crime, mystery, poetry, science fiction) and non-fiction (biography, self help).
- Enrolling in classes or choosing a career (STEM, business, education, art)
- Deciding on an investment portfolio (equities, bonds, commodities, cash)
In each case the categories are stable and innovations occur on the items within the categories.
All sciences cumulate knowledge based on classification:
- Biology: Linnean system of ordering plants and animals from domain to species
- Psychology; Diagnostic and Statistical Mental Disorders (DSM5-TR) defines types of psychological disorders
- Engineering work categories of chemical, civil, electrical and mechanical.
- Financial reports in balance sheets, income statements, cash flow, and equity documents.
Again, the classification provides stability of categories while evolving specific issues within categories.
We have suggested the need to organize disparate people and organization initiatives into an integrated human capability framework with four elements that are stable and 37 initiatives which change and can be classified into the four domains (figure 1)
We have validated this framework with survey methodology (Organization Guidance System with 1,000 organizations) and machine learning (Governance and Guidance for Growth through Human Capability G3HC with 7,000 organizations). It provides stability with the four domains and innovation with the 37 initiatives.
2. Link human capability to stakeholder value.
Often investments in any of the four human capability pathways have scorecards, dashboards, benchmarks, and best practices about the initiatives, not the impact of the initiative on outcomes that matter.
Organizations are comprised of stakeholders who each get value from their interaction with the organization. Human capability investments can be linked to the value they create for each stakeholder (see Figure 2)
Our (and other) research has demonstrated that organizations that invest in human capability will deliver these seven stakeholder outcomes.
3. Help each organization prioritize where to invest and disclose their human capability efforts
With the human capability framework tied to stakeholder outcomes, leaders can make better choices about were to focus their people and organization efforts. Often a company invests in one of the 37 initiatives in figure 1 because is it considered a best practice in an admired company, it builds the organization’s reputation (socially or politically correct), leaders believe in the initiative (survey says “do this”), an advisor recommends it, or it is easy to do. “Success” means that the initiatives were implemented on time and within budget.
We would hope that leaders can use rigorous analytics to determine which of the 4 pathways and 37 initiatives deliver the most value to the seven stakeholders. Prioritization is not just intuition but information.
Implications of taxonomy, stakeholders, and prioritization for conversations
The implications of this framework, stakeholder, and priority logic changes “HR” conversations.
In conferences for senior leaders, the human capability topics chosen to talk about should be those that create the most value for stakeholders. With the four categories, participants at these conferences get a balanced view of the talent, leadership, and organization choices that they could consider for their organization. They have a portfolio or menu of choices that they choose from depending on the needs of their specific stakeholders.
Reviews of human capability agendas from one year to the next build on each other to cumulate knowledge at the four category level rather than have isolated experiences. Instead of repackaging ideas, they could evolve for new insights.
Conversations about “HR” can and should pivot. Each of the seven stakeholders (not limited to employees, business leaders, or HR self talk) can engage in a conversation about how their needs are met through human capability initiatives. Based on these conversations, more strategic human capability investments can be made (like a financial portfolio) and more intentional disclosures (like those with SEC reports on human capital, Compensation and Discussion Analysis (CD&A) or ESG) can be made.
This quest for changing HR conversations to create stakeholder value through human capability is not new, but now is the time to make progress. We have been privileged to work with an incredible advisor board (Ram Charan, Rebecca Ray, Tom Steward, and Dixon Thayer) and to partner with Amazon Web Services (Bratin Saha, Sanjiv Das) to make progress on all three steps.
If you would like to move beyond anecdotes, isolated experiences, well intended but not measured initiatives, please let us know how to support you. www.g3humancapability.com