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[Music] Hi, my name is Dave Ulrich. I'm a professor at the Ross School of Business at the University of Michigan and a partner at the RBL Group. As we look at the field of HR, we see an evolution in the thinking.
Dave Ulrich explores the evolution and future of HR, emphasizing an outside-in approach linking HR to strategy, stakeholders, and external trends.
Key Takeaways
- HR is evolving from administrative functions to strategic value creation with an outside-in focus.
- Understanding external trends and stakeholder needs is essential for modern HR effectiveness.
- Talent management alone is insufficient; building organizational capabilities and leadership is equally important.
- HR must align reward systems and leadership behaviors with customer and stakeholder value.
- Sustainability in leadership and HR practices is critical for long-term organizational success.
What the video covers
- HR began in the 1930s-40s focusing on administrative tasks and labor contracts.
- It evolved to emphasize HR practices like staffing, training, compensation, and succession planning.
- In the last 15 years, HR linked closely with business strategy to create value.
- The future of HR involves an outside-in perspective, focusing on customers, investors, communities, and external trends.
- Dave Ulrich identifies 10 criteria for building effective HR systems centered on value creation and stakeholder needs.
- HR must understand economic, political, environmental, and demographic trends to remain relevant.
- Talent management remains critical, but HR must also build the right organizational capabilities and leadership.
- Leadership includes both generic leadership skills and differentiated leadership aligned with company brand and sustainability.
- HR should focus on creating value for all stakeholders, not just internal processes or employee satisfaction.
- The stakeholder model requires HR to serve customers, investors, communities, and employees in an integrated way.
Chapters
- 00:00Introduction and Evolution of HR
- 01:07Shift to HR Practices and Staffing
- 02:08Outside-In Perspective on HR
- 03:06Connecting HR to External Factors and Strategy
- 04:09HR Value Creation and Criteria Overview
- 05:15Context of Work and External Trends
- 06:11Stakeholders and Leadership in HR
- 07:15Reward Systems and Customer Focus
- 08:16Investor and Community Perspectives
- 09:03Talent, Organization, and Leadership Focus
Full Transcript — Download SRT & Markdown
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thinking HR began in the 1930s and 40s so this is time and it focused on the administrative system of work managing the processes managing the terms and conditions of work labor contracts HR then begin to shift to a set of HR
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HR began in the 1930s and 40s. So this is time, and it focused on the administrative system of work, managing the processes, managing the terms and conditions of work, labor contracts.
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we had some very smart people in the organization design field in the HR strategy field can I look at Strat Y and in that mirror begin to create my HR systems we think the next step in HR is
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HR then began to shift to a set of HR practices, and a lot of the focus was on staffing and training and compensation, and how do we do these practices, succession planning, organization design in an effective way.
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to investors we go to communities we go to government agencies and HR becomes a lever for those external factors that's the direction that's the focus that we see HR headed how do we do HR from the outside in and that outside in Focus means that
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Then in the last 15 years, they've been linked to strategy. So we had some very smart people in the organization design field, in the HR strategy field, can I look at strategy and in that mirror begin to create my HR systems. We think the next step in HR is
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logic we say to make that happen what we have to look at are a set of criteria and we think there are 10 criteria that we look at in building HR I'm going to overview these quickly they're in a book
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to go outside, not just to look at strategy as a mirror but as a window, and to say, let's look outside the company and begin to see how we can do our job better. When we go outside, we go to customers, we go
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in a way that will shape and create value for the company that means we don't look at HR in terms of what we do but in terms of what we create for other people the second criteria begins to
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to investors, we go to communities, we go to government agencies, and HR becomes a lever for those external factors. That's the direction, that's the focus that we see HR headed. How do we do HR from the outside in? And that outside-in focus means that
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economic political environmental and demographic Trends those Trends should be a part of what we think about because if we're going to create value from the outside in INR need to be aware of the context of that work and Linda's work
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we have to begin to understand the administrative work, the practices, the link with strategy, but we then have to connect it to the external factors. That's our question, that's our challenge. How do we do that? When we look at that
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company are we doing HR in a way that serves our customers our invest s in our community and the stakeholder model of HR forces us to go outside for example we've done some work looking at HR Through The Eyes of the customers we
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logic, we say to make that happen, what we have to look at are a set of criteria, and we think there are 10 criteria that we look at in building HR. I'm going to overview these quickly. They're in a book
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choice of employees our customers would choose that outside in view we're now doing work with investors we are now going to a number of investors we've done interviews we've done a large survey we're doing focus groups what do
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that HR Magazine put out last year, an eBook, around Are We There Yet? We now have a stress test. The first criteria is, does HR add value? Are we focused on HR from the outside in? Are we focused on HR
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the country the the industry social technological economical itical do I understand in link HR with stakeholders both inside and outside then number four five and six what will HR focus on when an HR person sits down at a table with a
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in a way that will shape and create value for the company? That means we don't look at HR in terms of what we do but in terms of what we create for other people. The second criteria begins to
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sustain and build talent in the field today Talent is a big part of Human Resources in fact some have said you're the chief Talent officer you're not human resources and HR is all about Talent we believe that Talent this is
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look at the context in which we work. Linda Gratton and some other wonderful and dear colleagues have looked at the context of work. What's the setting in which we do our work? We like to talk about social, technological,
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together as a team it's the culture or it's the capabilities it's what we're good at and we found in our work that there's a couple of key capabilities we have to be able to master we have to manage Innovation we have to manage
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economic, political, environmental, and demographic trends. Those trends should be a part of what we think about because if we're going to create value from the outside in, HR needs to be aware of the context of that work. And Linda's work
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time is the leading scorer in the World Cup the one who wins the Golden Boot on the team that wins the World Cup what percent of time is the best athlete on the team that wins the tournament and
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and our work has begun to define what that context is. Third, we need to look at the stakeholders who we serve. Those stakeholders can be inside the company, clearly the employees, the organization, linking HR with strategy, but they also should be outside the
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sitting in a meeting say do we have the right Talent competence commitment contribution and do we have the right organization and the integrator is leadership do we have the right leadership by leadership we mean not just the individual leader but
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company. Are we doing HR in a way that serves our customers, our investors, in our community? And the stakeholder model of HR forces us to go outside. For example, we've done some work looking at HR through the eyes of the customers. We
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doing the basics well we call that the leadership code here's the basic things every Leader's got to do it's generic the other part of leadership is what we call the brand do we have differentiated leaders do the leaders in our company
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begun to say good reward systems are not good because they have internal criteria. They're good because the customer gets through the incentive systems the behaviors that satisfy the customer. We don't want to just be the employer of choice. We want to be the employer of
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person as I look out to the Future what do I need to be aware of creating value in the outside not inside I've had some people say boy that's not new well it is new we've had HR often Focus within the
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choice of employees our customers would choose. That outside-in view, we're now doing work with investors. We are now going to a number of investors. We've done interviews, we've done a large survey, we're doing focus groups. What do
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stakeholders for my company my customers my investors my communities as well as my cap organization and invest and uh employees what do I then focus on when I'm nhr sitting in a strategy meeting what do I deliver what do I contribute
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investors want from the HR world? And we're trying to figure out that investor perspective. The same could be true of communities. Question one: Do I understand HR value creation? Do I understand the context in which my company operates, the
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much to contribute second stry meeting how do we innovate products faster wow that's a big issue I don't know what I'm going to say third issue how do we manage our Capital costs and our capital structure well I don't know what to say
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country, the industry, social, technological, economical, political? Do I understand and link HR with stakeholders both inside and outside? Then number four, five, and six: What will HR focus on when an HR person sits down at a
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in Vietnam what are we going to have to do around Talent where do we find them how do we promote them how do we pay them what do we do about organization and culture how do we build the right
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business leader? What's the conversation he or she will have? We believe there's three things. One is individual, and the individual is about talent. Will I help my company have the right people? Will I have the right talent? Will I have the right systems to
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say that's what HR sits and contributes now how do we do that the final four questions question seven do we have the right HR department what a great question I struggle today how do you organize HR and in the struggles to organize HR
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sustain and build talent? In the field today, talent is a big part of Human Resources. In fact, some have said you're the chief talent officer, you're not human resources, and HR is all about talent. We believe that talent, this is
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head of HR the other is you decentralize and you put an HR department with that structure in every country or in every business unit we find or the third option is you do both you have some kind of shared service organization or Matrix
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the individual, this is the organization, is a key factor, but we believe it's limiting if all we do in HR is build talent. We've missed a key piece. We also have to build number six, the right organization. Organization is how the talent works
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be decentralized if it's a combination it should be a combination a lot of people have misallocated that um we have found that about 20% of businesses are centralized government agencies single agencies small companies single product businesses they're centralized they
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together as a team. It's the culture, or it's the capabilities, it's what we're good at. And we found in our work that there's a couple of key capabilities we have to be able to master. We have to manage innovation, we have to manage
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Matrix organization those are the companies where the HR department finds multiple roles with a common purpose you there have a center of expertise with great knowledge The Specialist you have embedded HR people the generalist and you have the administrative support they
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service, we have to manage collaboration, we have to manage efficiency, and we can identify what do we need as an organization's identity that allows us to succeed. The test I love to use is interesting in sports. What percent of
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is around performance rewards and compensation one bucket of practices is Communications and one is around work which includes facilities organization design managing the workflow those practices need to be aligned with the outside customer and investor they need to be integrated with each other and
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time is the leading scorer in the World Cup, the one who wins the Golden Boot on the team that wins the World Cup? What percent of time is the best athlete on the team that wins the tournament? And
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professional and in the last data set we have a set of data of the skill sets for HR that will continue to emerge and finally is analytics do we measure our success so some people put measurement first I like
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the answer is generally 15 to 20%. In basketball, in American soccer, British football, in almost every team sport, in hockey, the talent 15 to 20% of the time will succeed. 70 to 80% of the time it's the organization. And if I'm in HR
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my receivers do I know who they are number two do I understand the context of my work setting do I understand the external social technical economic political criteria number three am I connected with stakeholders inside the company the employees and the C and the
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sitting in a meeting, say, do we have the right talent, competence, commitment, contribution? And do we have the right organization? And the integrator is leadership. Do we have the right leadership? By leadership we mean not just the individual leader but
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sure that our leadership team at the top and throughout the company is superb number six can I create the right organization can I create the right set of capabilities and culture that help us go forward and finally number seven do I
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leadership deep inside the company. We've just had the privilege with HR Magazine of doing another eBook with Norm Smallwood and I, and we've said leadership has a set of dimensions that we can see. One part of leadership is
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invested in my HR people are we taking care of ourselves and number 10 do I have analytics and metrics to track what we do I've been asking this short clip to give you a view of the future of HR
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doing the basics well. We call that the leadership code. Here's the basic things every leader's got to do. It's generic. The other part of leadership is what we call the brand. Do we have differentiated leaders? Do the leaders in our company
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HR contribute value to the company and not only to the employees inside but to the customers investors and communities where we live and work for the last 25 years I've had the privilege of being a part of this HR
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separate themselves from somebody else? And now we're trying to say the next step in leadership is sustainability. Do we actually sustain the change in both individual leader and collective leadership behavior in the company? So let's go back. I'm an HR
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measure now we begin to see the flow of how that fits together so that HR is in fact a true contributor and a partner if you will to the success of a business what a great profession to be in HR
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person. As I look out to the future, what do I need to be aware of? Creating value on the outside, not inside. I've had some people say, boy, that's not new. Well, it is new. We've had HR often focus within the
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we have a website www.bl.uk
Topics:HR evolutionDave Ulrichhuman resources strategyoutside-in HRtalent managementstakeholder modelorganizational leadershipHR value creationHR trendsfuture of HR
