HR Value Proposition Ulrich

The HR Value Proposition: A dozen things we know about organizations
Amsterdam May 2006

Dave Ulrich, Professor, University of Michigan
Partner, The RBL Group (www.rbl.net) dou@umich.edu
2006. The RBL Group. All rights reserved
The HR Value Proposition
Goals for today

THINK:
About basic principles that affect people and organizations About practices that HR professionals and leaders can use to implement these principles
BEHAVE:
Do little things that make a difference
FUN:
Enjoy the experience together
Levels of application
Fundamental Message:
value is defined by the receiver more than the giver
value is defined by the receiver
value is defined by the receiver
Human resources
Line management
What we do? Actions/behaviors
What we do? Actions/behaviors
What we want
(values, beliefs, goals)
What we want
(values, beliefs, goals)
HR actions that deliver value coach
facilitate
HR
professionals
architect
deliver and do
To provide value: principles and practices

Principles (things we know)
1 2 3 4 5 6 7 8 9 10 11 12
Practices (things we do)
Principle 1:
Competitiveness is not strategy, but strategy * organization

Challenges to strategic clarity 1. Focus: Formulation vs. execution/aspiration vs. behavior
Principle 1
2. Specificity: Direction vs. destination 3. Referent: Customer vs. employee
So HR should:
Help create strategic clarity with a focus on execution
Practice 1:
10
Facilitate strategic clarity

"BULL'S EYE"
VISION:
where we are headed
VISION GOALS
15 word exercise
Practice 1
GOALS:
what we will track
ACTION
more of/less of exercise

ACTIONS: what we will do
menu of actions and accountability exercise

RESULTS: how we will know
outcomes and behavior exercise
Practice 1:
11
Practice 1
Practice 1:
12
Practice 1
Principle 2:
13
Organization is not structure, but capability

Capability represents identity (reputation) of the firm in the mind of the customer, investor, and employee. Do capability audit: given our strategy, what capabilities do we require?
Talent Collaboration Change/speed Accountability Efficiency Customer service Shared mindset/culture Learning Accountability Strategic clarity Innovation Leadership brand
Principle 2
So HR should:
Do organizational audits that result in 90 day action plans
Practice 2:
14
Do capability audits
CURRENT STATE STRATEGY FUTURE STATE
Practice 2
CAPABILITY/ ORGANIZATION
ACTION
3 RESULT
Practice 2:
15
Do capability audits
Practice 2
Principle 3:
16
Change is not an event, but a process

Challenge of change: Turn what we know into what we do. Lessons of change (change disciplines)

Principle 3
Leading: establishing a leadership brand throughout the organization consistent with the change Creating a felt need: knowing why vs. what Envisioning: having a clear sense of where we are going and seeing small first steps to getting there (tipping point) Engaging: getting buy in from everyone personal ownership Decision making: translating visions into decisions Institutionalizing: making change a natural act; a pattern not an event; a part of the organization not an individual initiative Monitoring and learning: tracking the right stuff and learning from it

So HR should:
Manage the process of making change happen
Practice 3:
17
Profile Change Disciplines

Applying change disciplines to a project or initiative
Very Good 10
Practice 3
Quality of process
Very Poor
0
Leading change Creating need Defining direction Engaging stakeholders Making decisions Dedicating resources Learning adapting monitoring
Principle 4:
18
Culture is not values, but a firm identity or shared mindset

PRODUCT BRAND: unique attributes of product/service that elicit customer response
Principle 4
FIRM BRAND: identity of the firm in the mind of key customers (shared mindset) So HR should:
Help define an identity or shared mindset then make it real
Practice 4:
19
Create a culture change plan

What are the top three things we want to be known for by our best customers in the future?
Top/down: intellectual agenda
Practice 4
Make identity real Firm brand
Side to side/processagenda
Bottom/up: behavioral agenda
90 day action plans
Practice 4:
20
Create a culture change plan
Practice 4
Principle 5:
21
Leadership is not a person, but a brand

Evolution of leadership thinking
Brand: leadership is an identity throughout an organization Results: leadership is about getting results in the right way Universal principles/competencies: leaders possess knowledge, skill, and ability Situational: leaders vary style by situation One best way: leaders have a style and physical attributes
Principle 5

So HR should:
Instill a process for leadership brand development
Principle 5:
22
Leadership is not a person, but a brand
Declaration of leadership brand

Leadership Brand
Principle 5
Leadership code
Leadership results
Leadership Brand Statement

Our leaders are known for.
23
Leadership as a Brand: leadership code

Developer Delegator Personal Tutor
Human Capital developer
TIME
Organizational strategist
Ambitious Value Creator Boundary spanner Organizational architect
Long term/strategic
FOCUS
People
Personal Proficiency
Organizations
Personal Proficiency:
Learner Energizer Principled Driven
Talent manager
Communicator Motivator Performer
Short term/operational
Organization executor
Knowledgeable professional Change disciplinarian Decision maker Team builder
Practice 5:
24
Inspire a leadership brand

1. NEED Compelling case for leadership 2. DECLARE
Practice 5
6. PUBLICIZE Ensure reputation
Declare leadership needed for strategic results
Leadership Brand
5. MEASURE Measure impact of investment 4. INVEST Invest in leadership capability 3. ASSESS Assess leaders and leadership
Practice 5:
25
Inspire a leadership brand
Practice 5
Principle 6:
26
Learning is not ideas, but ideas with impact

Learning is the ability to generate * generalize ideas with impact
Principle 6

Individual learning: Team learning:
creativity, insight high performing work teams
Organization learning: high performing organization
So HR should:
Create learning disciplines
Practice 6:
27
Encourage learning processes

Learning Matrix
1 2
reference Steve Kerr
Ideas
3 4 5 6 7 8 9 A B C D E F
Practice 6
Unit
Generate: rate 0 5 each cell Generalize: move people and ideas
Practice 6:
28
Encourage learning processes
Practice 6
29
Principle 7: Collaboration is not democracy, but making the whole more than the sum of the parts
1+1 = 1
Efficiency through:
1+1 = 3
Leverage through:
Products Customers Services Ideas People
Principle 7
Technology People Facilities Processes
So HR should:
Help ensure both efficiency and leverage
Practice 7:
30
Ensuring efficiency and leverage

Phase 2: Leverage
Practice 7
FOCUS: ideas, products, services, customers, people Style: participative, engaging, sharing
Phase 1: Efficiency
FOCUS: technology, people, facilities, processes Style: bold, decisive, quick
Actions: specific, measurable, time bound, accountable
Principle 8:
31
Customer service is not market share, but customer share

Principles of customer share
Customer not client. While we all have internal clients, but we must focus on external customers (wallet or purse test) Some customers are more important than others (key customers) Define the desired outcome of key customers Find ways to connect with key customers
Principle 8
Customer segmentation.
Customer value.
Customer connection.
So HR should:
Partner with target customers by engaging them
Practice 8:
32
Generate customer share

Steps to generating customer share: 1. Identify target customers (20/80)
Practice 8
2. Define their customer share and set goals for desired customer share 3. Recognize customer value proposition 4. Build connections with targeted customers
Essence: the ideas from the customers Presence: the involvement of the customers
Practice 8:
33
Generate customer share
Practice 8
Principle 9:
34
Financial results are not cash, but market value (intangibles)
The correlation between earnings and market value has dropped from about 85-90% to 50%
Principle 9
Two firms in the same industry with the same earnings may have dramatically different market value Intangible: Anything in an organization that generates value that you cannot drop on your foot The Economist So HR should:
Do an intangibles audit
Practice 9:
35
Perform intangibles audit

Organizational Capabilities Core Competencies
Practice 9
Compelling Strategy Keeps Promises
INTAGIBLE VALUE
Make and meet commitments to employees, customers, suppliers, investors
Convincing approach for continuing to create value and extending that ability into the future
Clear ability to realize value creation potential and to continue track record of keeping promises
Internal ability to make things happen efficiently and effectively now and in the future
Practice 9:
36
Perform intangibles audit
Practice 9
Principle 10:
37
Abundance
Principle 10
Employees have universal needs: meaning, hope, learning, relationships, security, voice, control, etc. Organizations are a universal setting to meet these needs Abundant organizations exist when both employees and organization needs are met So HR should:

Be the architects and stewards of abundance
Practice 10:
38
Creating Abundance
Match individual needs with organizational responses Diagnose what individuals need and want Create organization responses through management actions, organization processes, and enduring cultures Define winning as the balance of caring and compassion with competitiveness
Practice 10

Practice 10:
39
Creating Abundance
Practice 10
Principle 11:
40
HR is being divided into transaction and transformation

Past Present Future Time and resources
Principle 11
Transaction work
Work
Transformation work
So HR should: govern transactions more efficiently and transformation more effectively
Practice 11:
41
HR work: first transaction, then transformation

Transformation work
Practice 11
Define roles (corporate, centers of expertise, embedded HR) Deliver value in each role Deliver capabilities required to win
Transaction work
Service centers e-HR outsource
Actions: build transformation team, have integrated model, start small
Practice 11:
42
HR work: first transaction, then transformation
Practice 11
Principle 12:
43
HR Professionals deliver value

For HR professionals to deliver value:
Principle 12

Actions: Roles:
what we do
(coach, architect, facilitate, deliver)
who we are
(employee advocate, human capital steward, functional expert, strategic partner, and leader)
Competencies: what we know

(strategic contribution, personal credibility, business, HR, and technology)
So every HR professional should make personal commitments to upgrade actions, roles, and competences
Practice 12:
44
Become a valued contributor

Personal action plan for HR professional improvement
Practice 12
What do I want? What are my options? Who do I think? What are the key decisions I need to make? What are the first steps? How will I know if I am progressing?
Summary for the session:
45

Principles (things we know)
1 2 3 4 5 6 7 8 9 Strategic clarity Organization capability Change disciplines Culture as shared mindset Leadership brand Learning: ideas with impact Collaboration: W > P Customer share Intangibles
Practices (things we do)

Facilitate strategic clarity Do capability audits Profile change disciplines Create a culture change plan Inspire a leadership brand Encourage learning processes Ensure efficiency and leverage Generate customer share Perform intangibles audit Balance individual and organization needs Manage transactions; lead transformation Become a valued contributor
10 Abundance 11 HR transaction then transformation 12 HR professionalism
The HR Value Proposition: A dozen things we know about organizations
Dave Ulrich, Professor, University of Michigan

Partner, The RBL Group (www.rbl.net) dou@umich.edu

HR Value Proposition Ulrich

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The HR Value Proposition: A dozen things we know about organizations

Amsterdam May 2006

2006. The RBL Group. All rights reserved

The HR Value Proposition

Goals for today

2006. The RBL Group. All rights reserved

The HR Value Proposition

2006. The RBL Group. All rights reserved

The HR Value Proposition

2006. The RBL Group. All rights reserved

The HR Value Proposition

2006. The RBL Group. All rights reserved

The HR Value Proposition

What we do? Actions/behaviors

What we do? Actions/behaviors

2006. The RBL Group. All rights reserved

The HR Value Proposition

HR actions that deliver value coach

2006. The RBL Group. All rights reserved

The HR Value Proposition

To provide value: principles and practices

Practices (things we do)

2006. The RBL Group. All rights reserved

The HR Value Proposition

Competitiveness is not strategy, but strategy * organization

2. Specificity: Direction vs. destination 3. Referent: Customer vs. employee

Help create strategic clarity with a focus on execution

2006. The RBL Group. All rights reserved

The HR Value Proposition

Facilitate strategic clarity

where we are headed

what we will track

more of/less of exercise

menu of actions and accountability exercise

outcomes and behavior exercise

2006. The RBL Group. All rights reserved

The HR Value Proposition

Facilitate strategic clarity

The HR Value Proposition

Facilitate strategic clarity

The HR Value Proposition

Organization is not structure, but capability

Do organizational audits that result in 90 day action plans

2006. The RBL Group. All rights reserved

The HR Value Proposition

2006. The RBL Group. All rights reserved

The HR Value Proposition

The HR Value Proposition

Change is not an event, but a process

Manage the process of making change happen

2006. The RBL Group. All rights reserved

The HR Value Proposition

Profile Change Disciplines

2006. The RBL Group. All rights reserved

The HR Value Proposition

Culture is not values, but a firm identity or shared mindset

Help define an identity or shared mindset then make it real

2006. The RBL Group. All rights reserved

The HR Value Proposition

Create a culture change plan

Make identity real Firm brand

Bottom/up: behavioral agenda

90 day action plans