BLR’s popular podcast, HR Works, recently featured an interview with Dave Ulrich, the man some call the “father of modern HR.” He and his colleagues have a new book out that can help HR leaders in a practical and research-based way. The book is Victory through Organization, Why the War for Talent is failing Your Company and What You Can Do about It.
Dave is the Rensis Likert Professor of Business of the Ross School, University of Michigan, and a partner of the RBL Group, a consulting firm focused on helping organizations and leaders deliver value. He has consulted and done research with over half of the Fortune 200. He’s the author or co-author of more than 30 books, including the number one Wall Street Journal business best seller, The Why of Work. He’s been named the top management thought leader in Business Week, Fortune, Financial Times, The Economist and People Management, and he has been designated the number one most influential international HR thought leader by HR Magazine.
Note: this is the first of three articles based on the podcast. (To listen to the whole podcast, visit HR Works.) The next two articles will appear in future issues of the HR Daily Advisor.
[Steve Bruce, host of HR Works] Dave, welcome to HR Works.
[Dave] Well, when you read that Steve, I feel tired. It’s great to be with you, and I look forward to our conversation.
[Steve] Dave, the title of your new book says a lot, if I have it right. Although employers still need to engage in the war for talent, that is hire the best people they can, that’s really not enough today. It’s what you do with your employees, how you organize them that leads to success. Can you tell us how you came to this realization?
[Dave] We like data. I mean, it’s a fascinating the world of analytics and we can get into that. We like data, and over the last 30 years we’ve collected seven rounds of data for the HR competence study, but that’s kind of a misnomer. In the last round in 2016, there were four of us: David Kryscynski; Professor Michael Ulrich, our son, who’s now a professor; Wayne Brockbank who’s been on the study for 30 years, and myself. We collected data with 22 regional partners, so this is a very global data set, almost every region of the world.
We got data from 1,500 businesses. Now, 300 of those are not for profit, so we didn’t focus on the financial results of those as much or the economic results. And we had data from 32,000 people. So, we did a very simple test. We said, “What’s the quality of people within this 15 hundred or 12 hundred businesses?” Do we have great talent? Do we have a great workforce? And we can measure and we had measures. We did 360 instruments. How good are the people in these 12 hundred businesses? Because we have 12 hundred businesses, we also measured how effective is the business as an organization. So on the one hand you’ve got five fingers. You’ve got the talent, the individuals. On the other hand you’ve got a fist. You’ve got an organization. It’s not the workforce, it’s the workplace. It’s not the competence of the individual, it’s the capability of the organization. And then we did a very simple regression on business performance.
We have a six item measure of business performance. And we said, “Which of these most explains business performance?” Interesting question. Very few data sets are able to test that, and we were shocked. Four to one—the individual talent is important, but the organizational capabilities, and how well the organization works has four times the impact on business performance. So the headline of the book, Victory through Organization. You fight a war with people. You win the war through the organization that you create.
[Steve] Before HR execs can exert meaning influence on HR and corporate strategy, they have to earn that proverbial seat at the table. And you say in the book that that’s accomplished by being what you call a “Credible Activist.” Can you tell us how you go about achieving that status?
[Dave] You bet. Again, I love the data because it gives us insight. A lot of people are building competence models. Do I have these competencies or these competencies? We got less intrigued with the competence and more intrigued with the outcome. So it isn’t having competence. What do you accomplish with the competence? I happen to like basketball, and I love to ask the question, “If somebody throws an elbow on the court, have they drawn a foul?” And the answer is no. You’ve got to hit somebody. I mean, you could stand in the middle of the court and throw elbows all over, and the same is true in competence. It’s not having the competence, it’s using the confidence to create a desired outcome.
We have three desired outcomes. One of the desired outcomes is personal credibility. Getting invited to the table. There’s a business dialogue. Am I in HR invited to the dialog? That’s a very simple and interesting question. By the way, the second two outcomes, I’ll just say them quickly, am I serving stakeholders once I’m invited to the dialogue? And number three, am I driving business results?
So, let’s go back to the first one. Here’s what we found. We had 123 competencies of HR professionals. We did statistics. They came into nine buckets. One of those buckets is called credible activists. Here’s what we found. If you’re a credible activist you’re much more likely to be seen as personally effective to be invited to the table.
So what is credible activist? It means having a point of view. It means activist. Taking a position, being willing to argue your position with evidence and data. It also means building trust. Again, use two hand logic. On the one hand, I trust it. “I really like Steve, I like him so much that he’s my favorite person. We’re best friends.” If that’s all you depend on, it’s not going to be very successful. On the other hand, “He’s also an activist. He pushes me. He challenges me.” You can’t challenge without trust, and you can’t develop full trust without the ability to challenge. And so a credible activist, as the word implies, has credibility, trust, relationships, an activist, a point a view. Those are the HR people who are invited to the business dialogue.
[Steve] Okay, so you’re a credible activist, but the book goes on to say that getting a seat at the table as a credible activist doesn’t guarantee that you’ll have impact. For that you need to be a “strategic positioner.” Can you describe what that means?
[Dave] You bet. Let’s assume that you’re a credible activist. You have a point a view. You get invited to the table, and your first business meeting is how does our company innovate better? And how do we reduce cycle time for new innovations? And the scientists are talking about innovation, and you don’t say anything.
The second meeting is, “How do we change stock price?” You don’t say anything. Third meeting, the same thing. You don’t get invited to the next meeting. Once you’re at the table and in the business dialogue, you’ve got to know who you represent. And here’s what we found. I’m the HR champion, but it’s not just the employee alone that I represent.
If I’m going to represent the customers, the investors, the community, the business stakeholders of a company, I’ve got to be a strategic positioner. What does that mean? We found four things. Number one is, you’ve got to know the business. Everybody says that. That’s HR. You’ve got to know the business. How do we make money.
Number two, you’ve got to know the strategy of the business. How do we differentiate ourselves. How do we win?
Number three, you’ve got to know your stakeholders, your customers, your investors, your community.
Number four, you’ve got to know the business context. What’s happening within our industry. Good business strategic positioners don’t just speak the language of business, they can position the business in the future. That’s the strategic positioner.
We did a book called HR Outside In. Strategic HR is looking in a mirror and doing HR practices. Outside In HR is looking through the mirror as if it’s a window to the external world, and building HR to win in the marketplace. If you want to play in that space, you’ve got to be a strategic positioner.
Credible activist gets you in the door; strategic positioner helps you engage with business stakeholders.
[Steve] Okay, and then you’ve mentioned a third important facet of today’s HR management, and that’s the presence of paradoxes, and the need for the HR exec to be a “paradox navigator.” How does one go about that?
[Dave] Here’s what we found. Good HR professionals who drive business results navigate paradox. Paradox is so fun. We see it everywhere. Should a company be long term or short term? Yes. Should the company be top down or bottom up? Yes. Should we global or local? Yes. Should we centralized or decentralized? Yes. Should we focus on individuals or teams? Yes.
Almost everything we find is that business is a series of choices. Should we zoom out or zoom in? Should we be divergent or convergent? The greatest impact on business that HR people can make is when they navigate those two guardrails. What that means is, if my company tends to be convergent, everybody walks alike, talks alike, thinks alike, we’ve got to push divergent.
On the other hand, if my company is too divergent, everybody does their own thing, we have to be convergent. If my business executives zoom out; they focus on the future; they see what’s next, but they don’t zoom in, I’ve got to focus on zooming in. If we zoom in, but don’t zoom out, I’ve got to do the other.
And we found that the best HR professionals know how to create tension without contention, disagreement without being disagreeable, and they navigate those paradoxes. That’s the view of navigation.
To listen to the whole podcast, visit HR Works.