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Q&A with Dave Ulrich on how HR can help the Business win in the Market

Editorial Team
16/01/2020 12:55 PM

An Interview with
Dave Ulrich on how HR can help  the
Business win in the Market

Nguwi caught up with Dave Ulrich to discuss pertinent issues facing the human
resources profession, specifically how HR can add value to the business.


Memory: How do  you measure the
performance of the HR department in an organisation?

Dave: We see three ways to measure the
impact of the HR (or any other) department. 
First, a user satisfaction survey from employees overall and line
managers about their satisfaciion with HR services.  Second, producitivty measures of output
(e.g., revenue, profit) per unit of input (# of employees).  HR should have a strong voice in these productivity
measures.  Third, outcomes of the HR
department related to talent (e.g., engagement or retention of top talent),
organization (e.g., delivering capabilities like innovation, collaboration,
agility), customer (customer or market share, customer experience), or investor
(perceived firm reputation by key investors).

MN: In some of your writings, you talk about HR for business and not HR for
HR practices. Can you explain what this means for the HR professionals?

Dave: Often when I ask HR
professionals, “who are your customers?” their answer is “employees”.  While employees matter a great deal, a
business has to win in the marketplace to have a workplace.  So, the real customers of HR are the
customers of the business in the marketplace. 
So, HR is not about HR work, but the value HR work creates in the
marketplace with customers.  I also often
ask “what is the most important thing HR can give an employee?”  The answers are usually things like
opportunity, teamwork, fair pay, development, etc.  I suggest that the most important thing HR
can give an employee is a company that wins in the marketplace because without
winning in the market, there is no company.

MN: If good HR practice is HR for business why is it that HR departments
when they prepare Board reports they report on HR indicators like headcount,
sick days, time to hire, training hours per employee, number of staff members
trained, etc?

Dave: The key to these reports is to
tie each of these indicators to financial business results, to customer share
results, and to investor confidence results. 
Measuring activities in HR is like a sales person measuring the number
of calls made, not sales concluded . Activities should lead to outcomes that

MN: What should HR put in a report to the Board?

Dave: Show the relationship between HR
work and business outcomes discussed above. 
For example, a company might report training activity that impacted
employee experience that impacted financial business results that impacted
customers share that impacted market value.  
The board can also look at indicators in three areas as they impact
business:  talent (competence and
commitment of employees), organization (the capabilities the organization
requires to win often embedded in culture), and the leadership skills
throughout the organization).  Again,
talent, organization, and leadership activities can all be connected to
outcomes that matter.

MN: Should Headcount be a metric that is reported in Board reports, or
should the focus be on structures and span of control?

Dave: Not alone.  Number of employees alone is not an indicator
of impact or success. It can be part of a productivity index (e.g., revenue per
employee), but headcount alone is not a real indicator of business performance.

MN: Decisions can sometimes be made based on how many people are in an
organization. Do we as HR inadvertently facilitate such decisions by reporting
on this metric?


MN: Zimbabwe is high inflation and low productivity country at the
moment.  Which metrics are important to
track to come up with predictive models of a company's chances of survival and

Dave: I am not, nor would ever declare
to be, an expert on Zimbabwe.  But,
almost any company in the world, regardless of setting has to have some form of
a balanced scorecard, where thy measure and succeed in financial, customer, organization,
and individual results.  The individual
results (e.g., producitivty of employees, retention of key employees, employee
engagement scores) should lead ot organization results (e.g., innovation,
collaboration, the right culture, agility) should lead to customer results
(retention of key customres, revenue per customer, customer satisfaction)
should lead to sustained financial results (profitability and market value).

MN: You often talk about the leadership capital index. How can this be
applied to  HR leadership in a turbulent
economy like ours and its links to survival and profitability?

Dave: Leaders matter a great deal to a
company and to a country.  Leaders shape
values, create an agenda, get things done, and inspire today and tomorrow’s employees
and citizens.  Looking at quality of
leadership through the eyes of investors offers insights into what leaders
should do more/less of.  The leadership
capital index (see book by this name) offers 10 specific investors can track to
assess leadership.  5 are about the
characteristics of the individual leaders and 5 are about the organization that
the leaders create.  Any company or
country that improves on this index will likely be more successful.

MN: If there anything wrong with people who have not studied HR to pursue a
career in HR. I have seen in some top companies engineers end up in HR.

Dave: Many talented leaders have found
a delightful career in HR without being formally trained in HR.  They bring a sense of business acumen and
ability to get things done.  They can
surround themselves with HR specialist and technical experts who bring deep HR
knowledge to the business problems they identify. 

Dave Ulrich

Dave Ulrich is the Rensis Likert
Professor of Business at the Ross School, University of Michigan and a partner
at the RBL Group (http://www.rbl.net)
a consulting firm focused on helping organizations and leaders deliver
value.  He has published over 200
articles and book chapters and over 30 books. He edited Human Resource
Management 1990-1999, served on editorial board of 4 Journals, on the Board
of Directors for Herman Miller (16 years) and Board of Trustees at Southern
Virginia University, has spoken to large audiences in 90 countries; performed
workshops for over half of the Fortune 200; coached successful business
leaders, and is a Fellow in the National Academy of Human Resources. He is
known for continually learning, turning complex ideas into simple solutions,
and creating real value to those he works with in three fields.

With co-authors, he has influenced
thinking about organizations (Reinventing
the Organization)
by empirically showing how organization delivers 4 times
business results over talent (Victory
Through Organization),
defined organizations as bundles of capabilities (Organization Capability) and worked to
delineate capabilities oftalent
management (Why of Work; Talent
culture change (GE
learning (Learning
Organization Capability),
(Boundaryless Organization). 

Leadership.  With
colleagues, he has also articulated the basics of effective leadership (Leadership Code and Results Based Leadership), connected
leadership with customers (Leadership
shown how leadership delivers market value (Why the Bottom Line Isn’t), shaped investor expectations and
ability to measure leadership (Leadership
Capital Index),
and synthesized ways to ensure that leadership aspirations
turn into actions (Leadership

Human Resources.  He
and his colleagues have shaped the HR profession and he has been called the
“father of modern HR” and “HR thought leader of the decade” by focusing on HR
outcomes, governance, competencies, and practices (HR Champions; HR Value Added; HR Transformation; HR Competencies; HR
Outside In). 
He spearheaded a “gift”
book on the future of HR (The Rise of HR)
distributed to over 1,500,000 HR professionals), in which 70 thought leaders
freely share their insights.


2019:  *Named
one of the 100 most influencers in HR (in leadership & development

one of the top 20 influential HR leaders

#1 thought leader in HR by HRD Connect

2018:  Named
one of the 20 most influential business professors in the world by
top-business-degree (#13)

2017:  *Named
to the Thinkers50 “Hall of Fame”, a recognition of lifetime achievement in
influencing management

             *Chartered Fellowof the Human Resources Institute of New Zealand

Presidential lecture “in defense of organization” for Utah Valley

2015:  *Named
the most “influential HR thinker of the decade”

in Thinkers50 as management thought leader

2014:  *Ranked
#1 speaker in Management/Business by Speaking.com

speaker, University of Michigan Ross School of Business

2013:  *Lifetime
Leadership Award from the Leadership
Forum at Silver Bay

in Thinkers50 as a management thought leader

2012:  Lifetime
Achievement Award from HR Magazine for being the “father of modern human

2011:  *Ranked
#1 most influential international thought leader in HR by HR Magazine

in Thinkers50 as a management thought leader

in Top 100 Thought Leaders in Trustworthy Leadership Behavior

2010:  *Nobels
Colloquia Prize for Leadership on Business and Economic Thinking

             *Lifetime Fellowship in Australia
Human Resources Institute (AHRI)

#1 most influential international thought leader in HR by HR Magazine

Englehardt Exemplary Business Ethics Award from Utah Valley University

             *Why of Work (co-authored with Wendy
Ulrich) was #1 best seller for Wall Street Journal and USA Today

*Listed in Thinkers 50 as a management thought leader

#1 most influential person in HR by HR Magazine

*Ranked #1 most influential person in HR by HR Magazine

*Lifetime Achievement Award from American Society of Training and
Development (ASTD)

          *Honorary Doctorate from University of Abertey, at
Dundee Scotland

*Ranked #1 most influential person in HR by HR Magazine in vote by
influential HR thinkers

Distinguished Alumni Award from Brigham Young University, Marriott School of

2005:      *Ranked #2 management guru by Executive

                *Named by Fast Company as one of the 10 most
innovative and creative thinkers of 2005

  • President, Canada Montreal
    Mission, Church of Jesus Christ of Latter-day Saints

2001:      Ranked #1 management educator and guru by
Business Week

2000:  *Lifetime achievement award from World
Federation of Personnel Management

in Forbes as one of the "world’s top five" business coaches

1998:   *Society
for Human Resource Management award for Professional Excellence for lifetime contributions

achievement (PRO) award from International Association of Corporate and
Professional Recruitment, and Employment Management Association

1997:  *Warner W. Stockberger Lifetime Achievement
Award from International Personnel Management Association

Editorial Team

This article was written by one of the consultants at IPC

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