Dave Ulrich: HR is about Winning in the Marketplace

In an exclusive interview with MyHRFuture's David Green, Professor Dave Ulrich gave a range of insightful thoughts on the changing nature of HR, challenging assumptions and how to be effective within organizations and the marketplace, alongside highlighting the role of the HR business partner in a digital age. A Professor at the Ross School of Business at the University of Michigan, Ulrich is considered the father of modern HR, the author of over 30 books and an expert on leadership, innovation, organizations as capabilities and an all-round creative thinker in the field of human resources. 

HR’s Purpose and Aspirations 

When David asked about the purpose of HR, Ulrich answers with a question: “what’s the most important or best thing HR can give an employee? The answer is a company that wins in the marketplace.” 

What we do in HR is not what we do inside the organization, but how we ensure success for companies and investors and create real value for the customer and the community. “The more HR moves outside the business, the more visibility we will have,” Ulrich reiterated. 

Currently, how far is HR from this vision? In this respect, Ulrich wants HR departments to stay hungry, stating that “my hope is that HR is never caught up to the vision we have, because we should always have an aspiration that exceeds our capability. If aspiration matches our capability, we’re not moving forward.” 

What are the assumptions HR needs to challenge? 

1. Move from inside to outside: Rather than just meeting business leaders within the organization, go and visit customers. Instead of remaining inside the business, HR needs to step outside and bring what they learn from customers back to build effective strategies and systems to help the organization to win in the marketplace.
2. Focus on business success: The biggest thing HR gives employees is not “commitment, purpose, belonging, it’s winning in the marketplace.” We need to broaden our view to include the stakeholders and customers as well. 
3. From people to systems: When looking at what HR uniquely delivers, Ulrich says we also need to broaden our horizons from people and talent to include organization design. “People can be champions,” Ulrich says. “But organisations win championships.” In order to do this, HR focus should be not just about people, but about organisation’s systems. 
4. What role is HR playing: How should we run HR departments? Ulrich believes you must have role-clarity. Within a company’s delineated roles - administrators, integrators, managers, etc - a concentration needs to be made on how we manage relationships. “Get HR working within HR.” 
5. Invest in tools: Use emerging, cutting-edge tools to enable HR professionals to be thought-leaders. These include analytics, data-driven decisions and technology. As Ulrich points out, “let’s make sure the data is not just our data but the business data.”

How does success look like?

What does a non-HR person taking an HR role needs to do? What can a traditional HR leader do to become more effective and help their organizations within the marketplace? 

For non-HR professionals taking on HR roles, Ulrich offers this advice: “you’ve got to know change and you need to surround yourself with really bright HR experts,” who have experience with the bodies of knowledge such as learning and development, compensation, organizational design, etc. “Don’t assume because you’re the CRO that you have that knowledge.” 

Traditional HR professionals looking to drive success in the marketplace should move outside the organization. “We often saw in the HR field that strategy was the mirror,” Ulrich said, but added that he would encourage traditional HR leaders to meet with investors and key customers. “Business is about winning in the marketplace,” so leaders should establish who else customers are looking at, other companies they’re buying from, why they picked your business over the others. The goal should always be moving from external to internal: “how do we build an internal organization to meet your customer needs?” Ulrich suggests HR professionals become the customer in order to gain a unique insight. “Find out how you’re treated. Find out how other customers are treated. Bring that into your business conversations.” 

Circling back to HR’s purpose as a driver of marketplace success, Ulrich drew comparisons between the leadership profiles of CROs, CEOs and top HR professionals. According to research conducted by Korn-Ferry, the best, top-scoring HR leaders were found to have the same leadership profile as the top-scoring, best CEOs. This suggests that the creme de la creme of HR and the high-ranking managerial staff have the same motivations and goals.

“What does that say about the top HR leader?” Ulrich asked. “You’re not here to help HR; you’re here to help the business win.” 

Ulrich kept up his focus on outcomes, looking at what tangible results can come from skills rather than simply acquiring the skills themselves. What are the outcomes we’re co-creating

Around reputation, customer confidence and business results? 

“If I want to be seen as a personally effective HR leader, you have to be seen as a credible activist.” What does this mean? Someone people enjoy working with, is trustworthy, willing to push, challenge and share your point of view. Ulrich also touched on the need for leaders who can navigate paradox: good HR people who create and engage in a dialogue that manages tension. 

The key takeaway Ulrich drives home is that an entire organisation functioning as a whole - not single workers - will gain outcomes in the marketplace. “Is it talent, or is it systems? What wins in the marketplace more is not individual people but organisational systems.” Therefore, HR leaders need to become competent at building systems, culture and capabilities. “Not just the workforce but the workplace,” Ulrich said. “Not just the people but the process.” As David Green points out, “you can be a great conductor unless you’ve got a great orchestra.” 

Digital Transformation 

In discussing the real role of digital in HR, Green and Ulrich agreed that there’s a mixture of hype and reality. “It’s not just about HR, it’s about the world we live in,” Ulrich said. “Technology is a means to create digital information. This allows us to make more informed decisions.” 

In terms of digital HR, Ulrich defines four key phases: efficiency, innovation, information and connection. Most HR teams, currently, are in the first two phases, and Ulrich hopes to see more progress into the further stages in the near future. 

David Green states that possibly the best thing about digital is the opportunity to give data back to the workers, to enable them to help their careers. Potential fears include the misuse of this data and the need for transparency will become even more crucial. Ulrich agreed: “you’ve got to start good information with good data.” 

“Anytime the task is about information sharing, there’s a chance that’s going to be done through technology,” Ulrich said. However, both Green and Ulrich were optimistic, predicting the rise of automation would actually create more jobs, but that they would be different. “There’s going to be more collaboration between governments, education, industry - who’s going to take the stewardship on those jobs that will be replaced? Somebody is going to have to help those people.” 

To watch the complete conversation between David Green & Prof Dave Ulrich, click here