Making Human Capability Progress by Ensuring Accountability

by Marc Effron, President, Talent Strategy Group ([email protected] ) and Dave Ulrich, Rensis Likert Professor, Ross School of Business, University of Michigan and Partner, The RBL Group ([email protected] )

A preponderance of evidence demonstrates that investments in people and organization have significant impact on business results. For decades, scholars have researched and developed theories that when organizations invest in high-performing work systems, financial results follow (see the work of Gary Becker, John Boudreau, Wayne Cascio, Jac Fitz-enz, Lynda Gratton, Mark Huselid, Ed Lawler, Jeff Pfeffer, Pat Wright, and many others). Almost every large consulting firm offers research to show the economic impact of investing in people and organization (see McKinsey’s Organizational Health Index, BCG’s reports on people strategy, Deloitte’s human capital practice, Gallup’s Workhuman research, Accenture’s focus on workforce transformation, PWC’s people and organisation practice, E&Y’s People Advisory Services). Increasingly, business executives have highlighted the importance of investing in people, leadership, and culture as top priorities, equal in importance to dealing with global uncertainties and technological change (AI).

So we confidently stipulate that upgrading human capability (defined as the integration of talent, leadership, and organization) delivers stakeholder value . Yet despite this clear evidence of impact and even knowing how to improve, too few organizations realize this value. Employee engagement remains static; leadership gaps continue; and poor culture practices hold organizations back. Articles continue to disparage HR efforts. We believe that not closing this knowing-doing gap is due in part to a lack of consequential accountability in delivering human capability practices. Without accountability, insights (ideas, research, and solutions) on human capability become false hopes and they languish.

Our question is: “How do we build accountability to make progress in human capability and increase stakeholder value?”

Based on our studies and advice on delivering performance , we offer specific and actionable tips to four patrons of human capability accountability (figure 1).

Business Leaders. Business leaders represent the senior executives within an organization and also people managers throughout the organization. Their words, actions, and attention signal priorities. Marc’s research found that they have significant responsibility for developing employees.?

When Dave taught an MBA class on human resources, a final exam question was:

Who has primary accountability for the people and organization issues in an organization?

a.??? Line manager

b.??? HR manager

c.???? Shared

d.??? Consultant

e.???? I don’t care, I am going into finance

Most answered “C,” and he marked it wrong. He suggested that the answer is “A,” the business leader or line manager who has “primary” accountability for human capability.

What builds business leader accountability?

1. Align on a public human capability philosophy that delivers stakeholder value.
2. Share human capability messages in public documents (SEC reports, social media, investor calls, advertising messages), internal presentations (town hall meetings), and informal conversations.
3. Include human capability metrics as part of leader performance scorecards with sufficient weighting to influence compensation.
4. Dedicate personal leader time and executive team time on human capability activities (e.g., succession planning, talent reviews, training and development, cultural alignment, etc.).
5. Become conversant in the latest human capability trends.
6. Hold people managers accountable to build the quality and depth of their teams.
7. Track progress of high potentials on their ability to deliver human capability.
8. Monitor promotions based on the ability to build human capability.
9. Model managing a high-performing team and include teamwork into performance and potential ratings.?

HR Professionals. HR professionals have evolved the value they contribute to stakeholders . They demonstrate accountability when they:

1. Administer policies efficiently and fairly, which requires that transaction and compliance work be conducted properly (often with genAI ).
2. Design and deliver HR practices that impact stakeholders. Increasingly, HR is less about HR programs and more about how human capability investments deliver value to stakeholders .
3. Coach business leaders to upgrade their people management skills.
4. Facilitate processes, discussions, and discipline for managing change, agility, and transformation , particularly processes that enable improved human capability.
5. Provide analytics and evidence of how to prioritize human capability investments that have the highest impact.
6. Ensure every talent process has meaningful, consequential accountability for managers who execute it well or poorly.
7. Accept full accountability to make candid discussions happen with all stakeholders of the success or failure of human capability program outcomes.

Employees. Employees are ultimately accountable to manage their work choices.. Marc’s research found that employees have primary responsibility for shaping their careers. Some suggestions for employees’ accountability include:

1. Clarify aspiration. Define what professional success means, which may vary by person over time and circumstances.
2. Perform assessments. Determine strengths and weaknesses in accomplishing aspirations with self and other diagnostics.
3. Commit to and take action. Make personal investment to improve by taking on work assignments and projects, attending development events, and continuously learning from outside-of-work experiences.
4. Understand the sacrifices required for professional success and only expect rewards that match contribution as compared to others.?

Advisors. This group includes consulting firms, coaches, boards of directors, and peers in other companies that acquire and implement new insights on accountability. When choosing an advisor, consider these criteria to help improve accountability:

1. Clarify desired outcomes. Contract for what an advisor will provide that ensures progress in human capability, including outcomes, processes, relationships, metrics, and costs.
2. Ensure technical expertise. Make sure that an advisor brings insights (theory, research, solutions) to the agenda. Many consultants or coaches operate with too little substance behind their advice.
3. Tailor results. Be cautious when advisors have a solution in search of a problem and offer the same solution to all clients. Co-creation means that the advisor will listen and learn about specific and unique challenges and, together with organizations, create solutions.
4. Transfer knowledge. Too often consultants rent their insights and create dependency; find advisors who lease to own so that their insights transfer into your organization without the advisor.

Few question the materiality of human capability investments and most have ideas on how to improve.?But, without clear accountability to make progress, aspirations become false hopes.

What can your organization do to improve accountability for human capability? Use figure 2 as a checklist of actions you might already do or consider to improve accountability.