© 2006. The RBL Group. All rights reserved
Dave Ulrich, Professor, University of MichiganPartner, The RBL Group (www.rbl.net)[email protected]
The HR Value Proposition:
A dozen things we know about organizations
Amsterdam
May 2006
© 2006. The RBL Group. All rights reserved
2
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
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3
The HR Value Proposition
Levels of application
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The HR Value Proposition
Fundamental Message:value is defined by the receiver more than the giver
© 2006. The RBL Group. All rights reserved
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The HR Value Proposition
Fundamental Message:value is defined by the receiver
© 2006. The RBL Group. All rights reserved
6
The HR Value Proposition
What we want(values, beliefs, goals)
What we want(values, beliefs, goals)
What we do?Actions/behaviors
What we do?Actions/behaviors
Human resourcesHuman resources Line managementLine management
Fundamental Message:value is defined by the receiver
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7
The HR Value Proposition
HR professionals
HR actions that deliver value
coachcoach
deliver and dodeliver and do
facilitatefacilitate architectarchitect
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The HR Value Proposition
To provide value: principles and practices
Principles
(things we know)
Practices
(things we do)
1
2
3
4
5
6
7
8
9
10
11
12
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9
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
2. Specificity: Direction vs. destination
3. Referent: Customer vs. employee
So HR should:
Help create strategic claritywith a focus on execution
Pri
nci
ple
1
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The HR Value Proposition
VISION: where we are headed
15 word exercise
GOALS: what we will track
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
Practice 1:
Facilitate strategic clarity"BULL'S EYE"
VISION
GOALS
ACTION
Pra
ctic
e 1
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The HR Value Proposition
Practice 1:
Facilitate strategic clarity
Pra
ctic
e 1
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The HR Value Proposition
Practice 1:
Facilitate strategic clarity
Pra
ctic
e 1
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The HR Value Proposition
Principle 2:
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 capabilitiesdo we require?
– Talent Shared mindset/culture– Collaboration Learning– Change/speed Accountability– Accountability Strategic clarity– Efficiency Innovation– Customer service Leadership brand
Pri
nci
ple
2
So HR should:
Do organizational audits that resultin 90 day action plans
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The HR Value Proposition
Practice 2:
Do capability audits
Pra
ctic
e 2
CURRENTSTATE
CURRENTSTATE
FUTURESTATE
FUTURESTATE
1 4STRATEGYSTRATEGY
2 5CAPABILITY/ORGANIZATIONCAPABILITY/ORGANIZATION
3 6ACTIONACTION
RESULT
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The HR Value PropositionPra
ctic
e 2
Practice 2:
Do capability audits
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The HR Value Proposition
Challenge of change: Turn what we know into what we do.
Lessons of change (change disciplines) 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
Principle 3:
Change is not an event, but a process
Pri
nci
ple
3
So HR should: Manage the process of making change happen
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The HR Value Proposition
Applying change disciplines to a project or initiative
Practice 3:
Profile Change Disciplines
Pra
ctic
e 3
Very Good
Quality of process
Very Poor
Leadingchange
Creatingneed
Definingdirection
Engagingstakeholders
Makingdecisions
Dedicatingresources
Learningadapting
monitoring
10
0
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The HR Value Proposition
PRODUCT BRAND:
unique attributes of product/service that elicit customer response
FIRM BRAND: identity of the firm in the mind of key customers
(shared mindset)
Principle 4:
Culture is not values, but a firm identity or shared mindset
Pri
nci
ple
4
So HR should: Help define an identity or shared mindset
then make it real
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The HR Value Proposition
Practice 4:
Create a culture change plan
Pra
ctic
e 4
What are the top three things we want to be known forby our best customers in the future?
90 day action plans
Firm brand
Top/down:intellectual agenda
Top/down:intellectual agenda
Bottom/up:behavioral agenda
Bottom/up:behavioral agendaSide to side/processagendaSide to side/processagenda
Make identity real
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The HR Value Proposition
Practice 4:
Create a culture change plan
Pra
ctic
e 4
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The HR Value Proposition
Principle 5:
Leadership is not a person, but a brand
Pri
nci
ple
5
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
So HR should: Instill a process for leadership
brand development
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22
The HR Value Proposition
Principle 5:
Leadership is not a person, but a brand
Pri
nci
ple
5
Declaration of leadership brand
Leadership Brand
Leadership code Leadership resultsX
Leadership Brand StatementOur leaders are known for….
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The HR Value Proposition
Leadership as a Brand: leadership code
FOCUS People
Personal Proficiency:Learner
Energizer
Principled
Driven
PersonalProficiency Organizations
TIME Organizational strategistAmbitious
Value CreatorBoundary spanner
Organizational architect
Human Capital developerDeveloperDelegator
Personal Tutor
Talent managerCommunicatorMotivatorPerformer Organization executor
Knowledgeable professionalChange disciplinarian
Decision makerTeam builder
Short term/operational
Long term/strategic
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The HR Value Proposition
Practice 5:
Inspire a leadership brand
Pra
ctic
e 5
Compelling casefor leadership
Declare leadershipneeded for strategicresults
Assess leadersand leadership
Invest in leadershipcapability
Measure impactof investment
Ensurereputation
LeadershipBrand
1. NEED
2. DECLARE
3. ASSESS
4. INVEST
5. MEASURE
6. PUBLICIZE
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25
The HR Value Proposition
Practice 5:
Inspire a leadership brand
Pra
ctic
e 5
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The HR Value Proposition
Principle 6:
Learning is not ideas, but ideas with impact
Pri
nci
ple
6
Learning is the ability to generate *generalize ideas with impact
Individual learning: creativity, insight
Team learning: 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:
Encourage learning processes
Pra
ctic
e 6
Learning Matrix reference Steve Kerr
1 2 3 4 5 6 7 8 9
A
B
C
D
E
F
Ideas
Uni
t
Generate: rate 0 – 5 each cell
Generalize: move people and ideas
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29
The HR Value Proposition
1+1 = 1
Efficiency through:– Technology
– People
– Facilities
– Processes
Principle 7:Collaboration is not democracy, but making the whole more thanthe sum of the parts
Pri
nci
ple
7
1+1 = 3
Leverage through:– Products
– Customers
– Services
– Ideas
– People
So HR should: Help ensure both efficiency and
leverage
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The HR Value Proposition
Phase 1: Efficiency
FOCUS: technology, people, facilities, processes Style: bold, decisive, quick
Phase 2: Leverage
FOCUS: ideas, products, services, customers, people Style: participative, engaging, sharing
Actions: specific, measurable, time bound, accountable
Practice 7:
Ensuring efficiency and leverage
Pra
ctic
e 7
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31
The HR Value Proposition
Principle 8:
Customer service is not market share, but customer share
Pri
nci
ple
8
Principles of customer share
Customer not client. While we all have internal clients,but we must focus on external customers(wallet or purse test)
Customer segmentation. Some customers are more importantthan others (key customers)
Customer value. Define the desired outcome of key customers
Customer connection. Find ways to connect with key customers
So HR should: Partner with target customers by engaging them
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32
The HR Value Proposition
1. Identify target customers (20/80)
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
Practice 8:
Generate customer share
Pra
ctic
e 8
Steps to generating customer share:
© 2006. The RBL Group. All rights reserved
33
The HR Value Proposition
Practice 8:
Generate customer share
Pra
ctic
e 8
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34
The HR Value Proposition
Principle 9:Financial results are not cash, but market value (intangibles)
Pri
nci
ple
9
So HR should: Do an intangibles audit
The correlation between earnings and market value has dropped from about 85-90% to 50%
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
© 2006. The RBL Group. All rights reserved
35
The HR Value Proposition
Practice 9:
Perform intangibles audit
Pra
ctic
e 9
KeepsPromises
CompellingStrategy
CoreCompetencies
OrganizationalCapabilities
INTAGIBLE VALUE
Make and meetcommitments 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
36
The HR Value Proposition
Practice 9:
Perform intangibles audit
Pra
ctic
e 9
© 2006. The RBL Group. All rights reserved
37
The HR Value Proposition
Principle 10:
Abundance
Pri
nci
ple
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 employee’s andorganization needs are met
So HR should: Be the architects and stewards of
abundance
© 2006. The RBL Group. All rights reserved
38
The HR Value Proposition
Practice 10:
Creating Abundance
Pra
ctic
e 1
0
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 compassionwith competitiveness
© 2006. The RBL Group. All rights reserved
39
The HR Value Proposition
Practice 10:
Creating Abundance
Pra
ctic
e 1
0
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40
The HR Value Proposition
So HR should: govern transactions more efficiently
and transformation more effectively
Principle 11:
HR is being divided into transaction and transformation
Pri
nci
ple
11
Transaction work
Transformation work
Time andresources
Work
Past Present Future
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41
The HR Value Proposition
Practice 11:
HR work: first transaction, then transformation
Pra
ctic
e 1
1
Transaction work Service centers e-HR outsource
Transformation work Define roles
(corporate, centers of expertise, embedded HR) Deliver value in each role Deliver capabilities required to win
Actions:build transformation team, have integrated model, start small
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42
The HR Value Proposition
Practice 11:
HR work: first transaction, then transformation
Pra
ctic
e 1
1
© 2006. The RBL Group. All rights reserved
43
The HR Value Proposition
Principle 12:
HR Professionals deliver value
Pri
nci
ple
12
Actions: what we do(coach, architect, facilitate, deliver)
Roles: 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)
For HR professionals to deliver value:
So every HR professional should make personalcommitments to upgrade actions, roles,
and competences
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44
The HR Value Proposition
Practice 12:
Become a valued contributor
Pra
ctic
e 1
2
Personal action plan for HR professional improvement
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
45
The HR Value Proposition
Summary for the session:
The HR Value Proposition
Principles(things we know)
Practices(things we do)
1 Strategic clarity Facilitate strategic clarity
2 Organization capability Do capability audits
3 Change disciplines Profile change disciplines
4 Culture as shared mindset Create a culture change plan
5 Leadership brand Inspire a leadership brand
6 Learning: ideas with impact Encourage learning processes
7 Collaboration: W > P Ensure efficiency and leverage
8 Customer share Generate customer share
9 Intangibles Perform intangibles audit
10 Abundance Balance individual and organization needs
11 HR transaction then transformation Manage transactions; lead transformation
12 HR professionalism Become a valued contributor
© 2006. The RBL Group. All rights reserved
Dave Ulrich, Professor, University of MichiganPartner, The RBL Group (www.rbl.net)[email protected]
The HR Value Proposition:
A dozen things we know about organizations