Q & A with Professor Dave Ulrich

January 2014

Nicola Tyler, CEO of Business Results Group, asks Dave Ulrich why HR transformation must become a C Suite priority for business leadership, why Gen X challenges must be taken seriously and his thoughts on Ricardo Semler’s business model previously presented at the Progress Conference in 2013.

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NT: Typically HR have sat outside of the C Suite. In your opinion why has this become a priority for change?

DU: Organizations win by creating a competitive advantage which is doing something unique that competitors can not easily copy and that customers value.  Traditional sources of uniqueness have been about cost (which leads to lower price), strategy (which leads to desired products and services), or technology (which leads to efficiency).  Today most competitors can copy product, product, and technology.  Competitiveness is not strategy statements, but the ability to deliver on the strategy.  The emerging competitive advantage comes from talent, culture, and leadership which allow an organization to have lower pricBes, better products, and improved processes.  HR professionals join the c-suite by bringing unique insights about talent, leadership, and culture that help organizations win.

NT: There has been a see-saw reaction to Generation X challenges. These waiver between reasonably wide acknowledgement that their expectations are a reality and denial which dismisses the change required to meet their demands. Why should companies rise up to the challenges of Gen X?

DU: There are two sides of the Gen X issue:  why people work and how they go about working.  On the “why” question, Gen X is much like other generations.  People want to do work that has meaning and impact.  Leaders can relate to Gen X employees by appreciating the next generation’s desire to find meaning from work.  On the “how” work is done question, Gen X employees are radically different.  They use technology, have shorter time frames, care about life before work, and value relationships.  Leaders who are sensitive to these “how” questions will help create more productive employees in all demographic groups.

NT: Recently we hosted Ricardo Semler at our 2nd Annual Progress Conference on Happiness@Work. A maverick in the true sense of the word. At the conference he spoke of his workplace democracy success which includes a large scale business with no HR department. Why do you think the SEMCO “HR” model is so effective?

DU: The reason the SEMCO model works is probably because at SEMCO HR is everyone’s business.

I have been advocating for some time now that the responsibility of talent management is not an HR responsibility but rather a line manager responsibility. People don’t leave organisations. They leave bosses.

In our WHY OF WORK studies we corroborate the importance of people’s personalised contributions. Too often employees feel emotionally disconnected from the work they do; their work may capture their talents and time, but not their heart and soul. At SEMCO, time is the least of their priorities and they have structured their organisation into small business units. This was predicated upon Ricardo’s belief that in large organisational units people feel tiny, nameless and incapable of exerting influence on the way work is done and their contribution to the outcome. We elaborate in Why of Work how great leaders personalise work conditions so that employees know how their work contributes to outcomes that matter to them. SEMCO get this and have done so for decades.

To start out, at SEMCO, they do not refer to workers or employees – they always refer to people. In particular, they make sure the people at SEMCO do the work they love. Ricardo does not believe on sending people on motivation courses; he finds them another job – one which gives them a personal sense of meaning & purpose. The other significant feature at SEMCO is their real understanding of their people’s needs inside and outside of the business.

Firstly, they believe that letting people participate in decisions that affect their lives is important to motivation and morale. He says, ‘There is no contest between the company that buys the grudging compliance of its workforce and the company that enjoys the enterprising participation of its employees.”

Secondly, they understand the needs of their people outside of the organisation. Their needs and desire to create meaning and purpose in their communities, families, church organisations and social groups. To go beyond merely understanding this they have created a work model that allows the people in their organisations to achieve their goals outside of the organisation. Their “retire-a little” programme affords them the opportunity to spend time when they still have the energy and “youthfulness” to enjoy their retirement and do personal stuff that matters. As Ricardo says, “Giving employees even the slightest LEEWAY – with respect to hours or where they work could give them a new life.” So yes, at SEMCO, they buy the hearts and minds of their people and not just their time.

NT: So would you suggest that businesses could do away with their HR department? Or alternatively what is your advice to HR professionals to ensure they survive extinction?

DU: HR does not start with HR issues, but business context. Business contexts requires understanding of the setting in which the business operates (e.g., social, political, and technical trends that shape a business’ opportunity set) and clear expectations of the key stakeholders (e.g., customers, investors, communities).   As HR professionals understand these business context issues, they get invited into the management discussions about strategy.

In the management discussions about strategy, each functional area brings unique insights:  finance brings insights on costs and profits; marketing offers customer insights; IT offers systems and process insights.  HR offers insights on three areas:  talent, culture, and leadership.

In the talent space, HR can ensure that employees are competent, committed, and contributing.  Competence means that employees have the knowledge and skills to do today and tomorrow’s jobs.  Commitment means that employees are willing to work hard and do their best.  Contribution means that employees find meaning from the work that they do.  HR professionals help leaders make informed talent choices so that the organization has the people who can deliver on strategic goals.  Organizations don’t think, people do; and getting the right people to think the right way helps organizations win.

In the culture space, HR professionals create an organization’s way of working and pattern of work that shapes how people think.   Organization’s don’t think, but they shape how people both inside and outside think and act. Collective work in teams and organizations outperforms individual work and talent.  HR professionals help define the culture in ways that deliver value to external customers and investors and then embed that culture among employees and throughout the organization’s systems.   HR professionals are organization architects who shape a culture.

In the leadership space, HR professionals ensure that leadership is a shared, not individual responsibility.  Individual leaders with charisma and charm are important, but collective leadership throughout an organization ensures that correct actions occur over time.   HR professionals help create a leadership brand where leaders action and behaviours make customer expectations real.

Business Results Group and GIBS will be bringing Dave to South Africa to present his 13 milestones for HR to transcend the way the deliver measurable value to their organisations. In JHB on 27 May and Cape Town on 28 May. For further information visit www.theprogressconference.com.

Professor Dave Ulrich

Dave has consulted and done research with over half of the Fortune 200. His honours exude a consistent track record of global influence and authority in human resources and business management.  His research is based on collective feedback from over 60 000 line managers and HR professionals on the competencies required to improved business performance.

An accomplished and celebrated educator Dave is sought after the world over to present his findings and educate businesses. He has published over 200 articles and book chapters and over 25 books which he has co-authored with numerous fellow thought leaders.