Jun 21, 2005

The future of HR : by Ulrich and Brockbank

This week seems to be focussed on HR's role in business. I just came across another grreat article from the HBS WK series. According to David Ulrich and Wayne Brockbank in the HBS working Knowledge series is:

But this story also suggests what is next for HR: beginning to connect with those outside the firm as well as those inside.

Ulrich and Brockbank suggest that the way forward is for HR people to understand the concept of value.

While HR professionals must declare, live, and encourage moral principles, we believe that an HR value proposition goes beyond values. Value also means that someone receives something of worth from a transaction.

  1. Starting HR transformation with a value proposition has six important implications for HR professionals.
    First, human resources work does not begin with HR—it begins with the business.
  2. Second, the ultimate receivers of business reside in marketplaces that companies serve.
  3. A third implication of the HR value premise is found in framing HR as a source of competitive advantage.
  4. A fourth implication of the HR value proposition is that HR professionals must align practices with the requirements of internal and external stakeholders.
  5. The fifth implication of the HR value premise is that it directs HR professionals to acquire the personal knowledge and skills necessary to link HR activity to stakeholder value.
  6. The sixth implication of the HR value premise is that it leads HR professionals to view a company's key stakeholders from a unique and powerful perspective. And the HR perspective must be both. Unique implies that other functions or members of the leadership team do not share this same perspective and do not realize they need it. Powerful implies that this perspective adds a substantial value in helping the organization succeed.

Thus when HR professionals view the market environment, they should address the following questions:

  • What are the organizational capabilities that my company must have to create products and services that result in our customers' taking money out of their wallets and putting it into ours instead of giving it to our competitors?
  • What employee abilities do our people need so that they can understand and respond to short-term and long-term market demands?
  • How do we invest in HR practices that deliver business results?
  • How do we organize HR activities to deliver maximum value?
  • How do we create an HR strategy that sets an agenda for how HR will help our company succeed?
  • How do we ensure that HR professionals will know what to do and have the skills to do it?
When HR professionals respond to these questions, they will know why others would benefit by listening to them, because they will be delivering real value—and they will know what that value is. When HR professionals begin with the receiver in mind, they can more quickly emerge as full strategic contributors; add greater value for key stakeholders (customers, investors, line managers, and employees); enhance business productivity; achieve measurable and valuable results; create sustainable competitive advantage; and have more fun in their careers.

I couldn't agree more. And when Indian organizations' HR groups actually analyze these thoughts they will find a huge gap. What is needed is a great effort to either become strategic or become more and more irrelevant and to lose ground to external service providers.