hr value proposition ulrich

Dave Ulrich, Professor, University of MichiganPartner, The RBL Group (www.rbl.net)dou@umich.edu

The HR Value Proposition:

A dozen things we know about organizations

Amsterdam

May 2006

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

Fundamental Message:value is defined by the receiver

What we want(values, beliefs, goals)

What we do?Actions/behaviors

Human resourcesHuman resources Line managementLine management

Fundamental Message:value is defined by the receiver

HR professionals

HR actions that deliver value

coachcoach

deliver and dodeliver and do

facilitatefacilitate architectarchitect

To provide value: principles and practices

Principles

(things we know)

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

2. Specificity: Direction vs. destination

3. Referent: Customer vs. employee

So HR should:

Help create strategic claritywith a focus on execution

VISION: where we are headed

15 word exercise

GOALS: what we will track

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:

Facilitate strategic clarity"BULL'S EYE"

VISION

ACTION

Practice 1:

Facilitate strategic clarity

Practice 1:

Facilitate strategic clarity

Principle 2:

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 capabilitiesdo we require?

– Talent Shared mindset/culture– Collaboration Learning– Change/speed Accountability– Accountability Strategic clarity– Efficiency Innovation– Customer service Leadership brand

So HR should:

Do organizational audits that resultin 90 day action plans

Practice 2:

Do capability audits

CURRENTSTATE

FUTURESTATE

1 4STRATEGYSTRATEGY

2 5CAPABILITY/ORGANIZATIONCAPABILITY/ORGANIZATION

3 6ACTIONACTION

RESULT

The HR Value PropositionPra

Practice 2:

Do capability audits

Challenge of change: Turn what we know into what we do.

Lessons of change (change disciplines) 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

Principle 3:

Change is not an event, but a process

So HR should: Manage the process of making change happen

Applying change disciplines to a project or initiative

Practice 3:

Profile Change Disciplines

Very Good

Quality of process

Very Poor

Leadingchange

Creatingneed

Definingdirection

Engagingstakeholders

Makingdecisions

Dedicatingresources

Learningadapting

monitoring

PRODUCT BRAND:

unique attributes of product/service that elicit customer response

FIRM BRAND: identity of the firm in the mind of key customers

(shared mindset)

Principle 4:

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

So HR should: Help define an identity or shared mindset

then make it real

Practice 4:

Create a culture change plan

What are the top three things we want to be known forby our best customers in the future?

90 day action plans

Firm brand

Top/down:intellectual agenda

Bottom/up:behavioral agenda

Bottom/up:behavioral agendaSide to side/processagendaSide to side/processagenda

Make identity real

Practice 4:

Create a culture change plan

Principle 5:

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

So HR should: Instill a process for leadership

brand development

Principle 5:

Leadership is not a person, but a brand

Declaration of leadership brand

Leadership Brand

Leadership code Leadership resultsX

Leadership Brand StatementOur leaders are known for….

Leadership as a Brand: leadership code

FOCUS People

Personal Proficiency:Learner

Energizer

Principled

Driven

PersonalProficiency Organizations

TIME Organizational strategistAmbitious

Value CreatorBoundary spanner

Organizational architect

Human Capital developerDeveloperDelegator

Personal Tutor

Talent managerCommunicatorMotivatorPerformer Organization executor

Knowledgeable professionalChange disciplinarian

Decision makerTeam builder

Short term/operational

Long term/strategic

Practice 5:

Inspire a leadership brand

Compelling casefor leadership

Declare leadershipneeded for strategicresults

Assess leadersand leadership

Invest in leadershipcapability

Measure impactof investment

Ensurereputation

LeadershipBrand

1. NEED

2. DECLARE

3. ASSESS

4. INVEST

5. MEASURE

6. PUBLICIZE

Practice 5:

Inspire a leadership brand

Principle 6:

Learning is not ideas, but ideas with impact

Learning is the ability to generate *generalize ideas with impact

Individual learning: creativity, insight

Team learning: high performing work teams

Organization learning: high performing organization

So HR should: Create learning disciplines

Practice 6:

Encourage learning processes

Learning Matrix reference Steve Kerr

1 2 3 4 5 6 7 8 9

Generate: rate 0 – 5 each cell

Generalize: move people and ideas

1+1 = 1

Efficiency through:– Technology

– People

– Facilities

– Processes

Principle 7:Collaboration is not democracy, but making the whole more thanthe sum of the parts

1+1 = 3

Leverage through:– Products

– Customers

– Services

– Ideas

– People

So HR should: Help ensure both efficiency and

leverage

Phase 1: Efficiency

FOCUS: technology, people, facilities, processes Style: bold, decisive, quick

Phase 2: Leverage

FOCUS: ideas, products, services, customers, people Style: participative, engaging, sharing

Actions: specific, measurable, time bound, accountable

Practice 7:

Ensuring efficiency and leverage

Principle 8:

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)

Customer segmentation. Some customers are more importantthan others (key customers)

Customer value. Define the desired outcome of key customers

Customer connection. Find ways to connect with key customers

So HR should: Partner with target customers by engaging them

1. Identify target customers (20/80)

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:

Generate customer share

Steps to generating customer share:

Practice 8:

Generate customer share

Principle 9:Financial results are not cash, but market value (intangibles)

So HR should: Do an intangibles audit

The correlation between earnings and market value has dropped from about 85-90% to 50%

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

Practice 9:

Perform intangibles audit

KeepsPromises

CompellingStrategy

CoreCompetencies

OrganizationalCapabilities

INTAGIBLE VALUE

Make and meetcommitments 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:

Perform intangibles audit

Principle 10:

Abundance

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 employee’s andorganization needs are met

So HR should: Be the architects and stewards of

abundance

Practice 10:

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 compassionwith competitiveness

Practice 10:

Creating Abundance

So HR should: govern transactions more efficiently

and transformation more effectively

Principle 11:

HR is being divided into transaction and transformation

Transaction work

Transformation work

Time andresources

Past Present Future

Practice 11:

HR work: first transaction, then transformation

Transaction work Service centers e-HR outsource

Transformation work Define roles

(corporate, centers of expertise, embedded HR) Deliver value in each role Deliver capabilities required to win

Actions:build transformation team, have integrated model, start small

Practice 11:

HR work: first transaction, then transformation

Principle 12:

HR Professionals deliver value

Actions: what we do(coach, architect, facilitate, deliver)

Roles: 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)

For HR professionals to deliver value:

So every HR professional should make personalcommitments to upgrade actions, roles,

and competences

Practice 12:

Become a valued contributor

Personal action plan for HR professional improvement

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:

Principles(things we know)

Practices(things we do)

1 Strategic clarity Facilitate strategic clarity

2 Organization capability Do capability audits

3 Change disciplines Profile change disciplines

4 Culture as shared mindset Create a culture change plan

5 Leadership brand Inspire a leadership brand

6 Learning: ideas with impact Encourage learning processes

7 Collaboration: W > P Ensure efficiency and leverage

8 Customer share Generate customer share

9 Intangibles Perform intangibles audit

10 Abundance Balance individual and organization needs

11 HR transaction then transformation Manage transactions; lead transformation

12 HR professionalism Become a valued contributor

Dave Ulrich, Professor, University of MichiganPartner, The RBL Group (www.rbl.net)dou@umich.edu

The HR Value Proposition:

A dozen things we know about organizations

hr value proposition ulrich

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