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The role of HR in organisational transformation: Q & A with Dave Ulrich

Editorial Team
08/06/2017 8:38 AM

I recently engaged the renowned Human Resources guru Dave Ulrich to get his thoughts on the role of HR in organisational transformation in our operating context and what organisations can to do leverage on their human resource. I once brought Dave Ulrich to Zimbabwe for the IPC Regional Human Resources Summit on the 23rd of March 2011. Dave Ulrich is the Rensis Likert Professor of Business at the Ross School, University of Michigan and a partner at the RBL Group a consulting firm focused on helping organisations and leaders deliver value. He studies how organisations build capabilities of leadership, talent, and culture through leveraging human resources. He has helped generate award winning data bases that assess alignment between external business conditions, strategies, organisation capabilities, HR practices, HR competencies, and customer and investor results.

I have shared excerpts of my interview with him below.

  1. What is the role of HR in organisational transformation?

Organisation transformation has many dimensions.  It begins and ends by creating an organisation that succeeds in the marketplace by better serving customers.  To make this happen often requires strategic transformation where new missions lead to new products or services and financial transformation where revenue growth and cost of operations are managed.  But underlying both strategic and financial transformation are issues about talent, leadership, and culture.  These organisation related issues ensure that strategy happens and that financial results are sustainable.  HR becomes the architect of upgraded talent, leadership, and culture to ensure transformation success.

  1. How do you measure the impact of HR practices on business performance?

HR’s impact on business is measured through three steps. First, HR practices (like hiring, promoting, training, paying people) are done as efficiently as possible.  There are measures of these activities which create an HR scorecard.  Second, these HR practices should be linked to improved and measurable talent, leadership, and capability or culture.  Each of these outcomes of HR can be measured.  Third, and most critical, these HR outcomes of talent, leadership, and capability can be shown to deliver business value.  This relationship shows that HR may impact shareholder value (see my book Leadership Capital Index), employee sentiment (see book Why of Work), customer value (see book Leadership Brand).  Ultimately, as my colleague Dick Beatty says, the scorecard of HR is the business scorecard.

  1. Some practitioners are saying the HR business partnership model you developed is outdated. What is your take on that?

First, I did not invent the HR business model.  It was a synthesis of outstanding HR practices by dozens of leading companies. The business partner idea is simply about how HR professionals can deliver increased value to their business and offers ideas about an HR organisation structure that enables this. I am open to new ideas about HR can deliver value. The organisation structure for HR should be aligned with the structure of the business. HR professionals should help make sure that their insights help the business succeed. HR structure is one part of helping HR professionals become more value added to their business. If there are reasonable alternatives to HR adding value to a business, I hope they will be presented.

  1. What can the HR profession do to avoid being extinct?

Simple answer: add value. When HR provides ideas with impact, they are not only not extinct, but valued contributors to business success. This value can be focused on ensuring that an organisation has the right talent, leadership, and capabilities to meet customer, investor, and employee needs over time.

  1. Does the quality of leadership matter in organisational performance and if so how?

Yes, leadership matters a great deal and is one of the three outcomes of HR (individual talent and organisation capability being the other two).  People (talent) do what their leaders do. Organisation cultures often reflect the style of the individual leaders. And, research has shown that quality of leadership has a direct impact on financial results.  In our work (Leadership Capital Index), we show how quality of leadership affects shareholder value.  This leadership may affect 25 to 30% of a firm’s market value.

David 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, and Board of Trustees at Southern Virginia University, and is a Fellow in the National Academy of Human Resources.

Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant- Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm. https://www.linkedin.com/in/memorynguwi/ Phone +263 4 481946-48/481950/2900276/2900966 or email: mnguwi@ipcconsultants.com  or visit our website at www.ipcconsultants.com

Editorial Team

This article was written by one of the consultants at IPC

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