HR at Its Core

Dave Ulrich is professor of business administration and director of human resource executive programs at the Stephen M. Ross School of Business, University of Michigan, Ann Arbor, and a partner of The RBL Group (www.rbl.net). His writings include The HR Value Proposition (2005), co-authored by Wayne Brockbank, and Human Resource Champions (1997), both published by Harvard Business School Press.

In this interview with Barbara Beck, Skidmore College associate vice president for finance and administration and director of human resources, Ulrich discusses the core competencies and capabilities that HR officers must possess and nurture within their organizations. (See the companion article "Change Champions" in this issue in which Beck highlights how she and her HR staff have internalized the concepts of Ulrich's Human Resource Champions at Skidmore College.)

Beck: What have you found in your research regarding the competencies of the HR professional and what an organization's leadership should expect of its chief HR officer today?

Ulrich: We have studied HR competencies for the past 20 years, conducting a large-scale study every five years to determine the key competencies required for HR professionals. In the most recent round, we found that HR professionals needed to have competencies to manage people (care and nurturing of people) and business (aware of and contributing to competitiveness). We identified six competency domains for the HR professional.

• Credible activist: can build relationships of trust but has a point of view about the business to make sure that he or she contributes.
• Operational executor: can get the administrative work of HR done quickly and efficiently.
• Business ally: can discuss the business with ease, which requires knowledge of how the business creates wealth.
• Talent manager and organization designer: can employ innovation and integrate HR practices to align talent with organization goals.
• Strategic architect: can share, clarify, and execute strategy as a member of the management team.
• Culture and change steward: can help make things happen in a sustained way.

Beck: From your observations, are these competencies generally present, or untapped?

Ulrich: We have found that about 20 percent of HR folks do these very well and 20 percent do so very poorly, with 60 percent in the middle. However, we are seeing progress in this evolution.

Beck: You often talk about HR creating value and delivering results—about what HR professionals deliver versus what they do. What can chief financial officers ask and expect of their HR professionals to bring about results?

Ulrich: Often HR folks focus on what they know and do, such as staffing, training, compensation, and communication. We suggest that HR focus increasingly on the outcomes of this work—what happens in an organization because HR does its work well. It is not enough to judge a sales person by how many calls he or she makes, but by the results of those calls. Likewise, HR should be judged by the results it delivers. These results are the deliverables of HR, the capabilities of the organization, and the intangibles that investors value.

Beck: You also talk about critical HR capabilities. What are these, and how are these new or different from the more traditional capabilities required or expected of HR professionals?

Ulrich: I distinguish between capabilities, which deal with organization-level identity and personality (i.e., what our organization is known for), and competencies, which deal with the knowledge, skills, and values of an individual. HR needs to help build organization capabilities, or organization identity, and individual competencies or abilities.

We have identified a set of common critical capabilities—that is, things that an organization is known for. These include culture, collaboration, ability to change, accountability, learning, innovation, service, efficiency, leadership brand, and talent. These capabilities become the outcomes of doing good HR work. They also become intangibles to which investors pay attention.

Beck: Are there new responses required from today's HR professionals in light of our current business environment and culture?

Ulrich: There are a number of new business realities that will raise the bar for HR professionals, and colleges and universities are clearly affected by each of these environmental forces. These realities include globalization, where the world becomes a global village; customer expectations, where customers have higher expectations and choice; technology, which connects people from remote locations and allows information to be shared directly; demographics, where employees will have different expectations and skills based on their demographic attributes and lifestyles; and industry consolidation and convergence. The essence of these new realities is that the world is changing. What worked in the past may not work in the future. Organizations have to respond to these changes by becoming more adaptive, flexible, and collaborative. HR professionals must be aware of these external demands and organizational responses.

Beck: What specific roles must HR play in building a competitive organization?

Ulrich: In our research in the 1990s, we identified four roles that HR professionals needed to play. These are identities that HR folks are known for and represent the outcomes of HR activity. In our current work (The HR Value Proposition), we have shifted into five roles.

We've moved from employee champion to employee advocate—someone who worries about the employees of today—and human capital developer, someone who focuses on the employees of tomorrow. The point is that talent matters more than ever, and employees, or talent, must be cared for today (advocate) and tomorrow (developer).

A second shift is from administrative expert to functional expert, because getting things done better, faster, and cheaper is not enough. We need to get the right things done, which requires knowing the theory and research of human resources.

Third, we've combined strategic partner and change agent into simply strategic partner, recognizing that strategy without change is idle hope, and change without strategy is random action.

Finally, we've added brand leader because HR professionals embody an organization's leadership brand. They are the ones who make sure that the organization has a leadership brand and then embeds that brand through the HR practices of staffing, training, compensation, and communication. Because HR professionals come in touch with everyone, they make sure that the brand is seen as real and viable.

Beck: What else are you finding in your research or observing from business that HR professionals and college and university CFOs should consider or be mindful of, particularly in the context of their very diverse employee base and competition for top talent?

Ulrich: Since universities are the epitome of knowledge organizations, their ability to attract and engage talent is key. Yet, different groups of talent exist within a university. Administrators need to have work conditions that engage them in setting goals and running the university as a business. Staff need terms and conditions that keep them focused on building the infrastructure of the university. Faculty require unique and tailored employment contracts to keep them focused on research and teaching. CFOs and leaders need to look to their HR professionals to offer ideas and alternatives to help the university reach its talent goals.

Beck: What do you see as the biggest HR challenge ahead for higher education?

Ulrich: In a simple word, HR must deliver value. Some of this value comes in helping turn business strategies into realities. If a university is working to move into new markets (e.g., global), the HR professional can help by figuring out the right way to organize (e.g., joint venture, go alone) and move talent to those opportunities.

Some of the value comes from ensuring that employees inside an institution have the competencies to do their work and the commitment to do it well. Administrators, staff, and faculty each need to have a unique value proposition that focuses their attention on the type of work they need to contribute to the university. HR professionals can come up with creative ways to manage each of these groups.

And finally, some of the value HR must deliver comes from helping to manage costs. This might mean finding new ways to teach or do research or using technology to reduce the costs of the infrastructure. To deliver value, HR professionals need to learn how to translate business directions into HR priorities.