Past, Present, and Future of Human Capability: Delivering Value to All Stakeholders

With many others, I am passionate about shaping the future of HR, which clearly includes the use of GenAI. So this week, I asked ChatGPT to write a 200-word essay on “the future of HR” (see figure 1).

Summarizing the Past

Without doubt, this response captures legacy themes in the HR space. As I have shared, GenAI accesses and highlights topics that have been discussed in the HR space for some time: employee expectations, work-life balance, workforce planning, DEI, and learning and development.

Proclaiming the Present

In our recent posts on the Organization Guidance System (OGS), we add to this summary of HR’s legacy with three current topics.?

First, focus on value for all stakeholders, not just employees or workforce. The themes in the ChatGPT summary highlight the employee (six times) and workforce (three times). Today, based on our work on the OGS, the “humans” in human resources also include executives, board members, customers, investors, and communities (none of which are mentioned in the above essay). Delivering value to all these stakeholders has become the emerging and current agenda for HR. HR is less about HR (the initiatives listed) and more about delivering value to all stakeholders, thus evolving strategic HR to stakeholder value HR.

Second, broaden the scope of HR contribution to human capability. Looking back (ChatGPT above), HR focused primarily on individual-related initiatives: recruitment, employee engagement, performance management, DEI, and learning and development. Today, based on research from the OGS, the scope of HR includes individual-focused initiatives to deliver individual competencies (talent) and also initiatives that create organization capabilities (such as agility, culture, innovation, collaboration, and efficiency) and alsoleadership brand to develop individual leaders and leadership throughout and organization and also a value-added HR function. ?

Third, use analytics to prioritize where to invest. In the past, HR has been a smorgasbord of new initiatives and ideas, creating a long menu of possible investment initiatives. Selecting which initiative to advance was often based on experience, relationships, or other advice. Through OGS surveys with rigor and analytics, decisions can now be made to prioritize where to invest in talent, organization, leadership, and HR department based on the value created for stakeholders.

Summarizing the past with tools like ChatGPT can be informative, and many of today’s HR efforts are still rooted in or a recycling of this legacy work. But living in the present—through tools like the OGS that help create value for all stakeholders (humans) through prioritizing human capability investments—can be even more helpful. Today’s logic shows up in crafting a human capability plan that links human capability investments to stakeholder value.?

Creating the Future

If the past was?primarily?about employee outcomes through individual-focused initiatives and the present is?about delivering value for all stakeholders through the Organization Guidance System, then the future comes from emerging content and processes discussed below.

Anticipated Human Capability Content

In our human capability framework, we identified four domains of “HR” work and tested 38 possible initiatives in talent (10), organization (12), leadership (6), and HR department (10). Like most taxonomies, the domains remain relatively timeless, but the specific initiatives evolve in a timely way. Some of those likely evolving initiatives are summarized in figure 2 (many other emerging initiatives could be identified).

Anticipated Human Capability Process

The process of creating stakeholder value through human capability relies on information to improve decisions. Traditionally, information comes from:

• Observations, experiences, or best practices that have been done in the past or by others today.
• Interviews to learn what people say and feel.
• Surveys to capture shared perceptions (e.g. Organization Guidance System).

While all these traditional and current information sources offer reliability and validity, in the future, AI (GenAI, LLM, machine learning) will source information about what people do, report, and share to improve decision making.

We have seen early signals that the use of GenAI for information about human capability will improve impact. Using AI, we have scored the Security Exchange Committee (SEC) disclosures of 5700 organizations to report human capability and its impact on business outcomes.

The myriad of GenAI tools for HR will not only be used for accessing information and informing on latest ideas, they will guide decisions that lead to higher impact. These GenAI tools will:

• Score how an organization deploys human capability initiatives beyond surveys by using not only public disclosure data (e.g. SEC reports) but also internal information (board and executive committee minutes, executive presentations, performance management information, training and develop programs, and so forth).?
• Improve productivity, efficacy, and efficiency for a host of HR practices.
• Inform prioritizes for where organizations should invest in the 38 human capability initiatives (and beyond) to create the highest stakeholder value.
• Monitor human capability investment and stakeholder impact to provide governance and guidance for growth through human capability (G3HC—see www.g3hc.com).

Organizations that create and deploy these innovative GenAI tools will likely be the pacesetters for the future of HR.

Conclusion

ChatGPT summarizes the past; the OGS proclaims the present; and G3HC will create the future. Together, they evolve the delivery of stakeholder value through human capability. I end here as I often end my workshops: “the best is yet ahead.”

Dave Ulrich?is the Rensis Likert Professor at the Ross School of Business, University of Michigan, and a partner at The RBL Group, a consulting firm focused on helping organizations and leaders deliver value.