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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

2006. The RBL Group. All rights reserved

The HR Value Proposition

Levels of application

2006. The RBL Group. All rights reserved

The HR Value Proposition

Fundamental Message:
value is defined by the receiver more than the giver

2006. The RBL Group. All rights reserved

The HR Value Proposition

Fundamental Message:
value is defined by the receiver

2006. The RBL Group. All rights reserved

The HR Value Proposition

Fundamental Message:
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)

2006. The RBL Group. All rights reserved

The HR Value Proposition

HR actions that deliver value coach

facilitate

HR
professionals

architect

deliver and do

2006. The RBL Group. All rights reserved

The HR Value Proposition

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)

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

Practice 1:

11

Facilitate strategic clarity

Practice 1
2006. The RBL Group. All rights reserved

The HR Value Proposition

Practice 1:

12

Facilitate strategic clarity

Practice 1
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The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

Practice 2:

14

Do capability audits
CURRENT STATE STRATEGY FUTURE STATE

Practice 2

CAPABILITY/ ORGANIZATION

ACTION

3 RESULT

2006. The RBL Group. All rights reserved

The HR Value Proposition

Practice 2:

15

Do capability audits

Practice 2
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The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

Practice 4:

20

Create a culture change plan

Practice 4
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The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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.

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

Practice 5:

25

Inspire a leadership brand

Practice 5
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The HR Value Proposition

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

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The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

Practice 6:

28

Encourage learning processes

Practice 6
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The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

Practice 8:

33

Generate customer share

Practice 8
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The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

Practice 9:

36

Perform intangibles audit

Practice 9
2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

 

2006. The RBL Group. All rights reserved

The HR Value Proposition

Practice 10:

39

Creating Abundance

Practice 10
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The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

Practice 11:

42

HR work: first transaction, then transformation

Practice 11
2006. The RBL Group. All rights reserved

The HR Value Proposition

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

2006. The RBL Group. All rights reserved

The HR Value Proposition

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?

2006. The RBL Group. All rights reserved

The HR Value Proposition

Summary for the session:

45

The HR Value Proposition


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

2006. The RBL Group. All rights reserved

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

2006. The RBL Group. All rights reserved