Recently I wrote a positive review of HR from the Outside In, by Dave Ulrich and colleagues. Upon serious reflection, I want to offer a caveat to that review.
I began that blog by saying that this was the book I’d been dreaming about for years. Yes, it is an important book. But it doesn’t go far enough in highlighting the role of strategic business thinking as the core focus of company human resource management. Rather than framing the problem as six competency issues, the book would have generated a lot more insight about both the weakness and the solution to the typically secondary HR role in the contemporary corporation. Those of us who’ve consulted at numerous Fortune 100 and 500 companies are well aware that HR often, perhaps inrvitably, lacks significant political clout. That’s a terrible shame because the truth is that HR can make the difference between business success and failure for most any firm.
The future impact
The authors clearly state, in the first page, that the
purpose of their book is to support the alignment, integration and innovation
of HR practices in individual and organizational performance. A couple
paragraphs later they dissect their statement into three questions:
- What should HR professionals be, know, and do to be seen as personally effective?
- What should HR professionals be, know and do to improve business success?
- What should HR departments focus on to improve business performance?
They also make clear from the get-go that by business they refer to the company’s business, not merely the objectives of the HR department. They then proceed to examine six competencies to respond to those questions, emphasizing the role of “strategic positioner.” In that chapter they spend six pages discussing how to think and talk about the business’ strategic positioning. This is the richest part of the book, but there is much more to be learned about the strategic impact that HR can have upon the work force and the business.
What is to be
done?
HR from the Outside In purports to be a cutting-edge, strategic book, but the description of the strategic focus,
challenge and need is far more detailed than the brief chapter that addresses
strategic positioning. This disconnect goes to the very core of why the
discipline of HR exists in the first place. Until HR addresses that most basic
issue in laser-like focus, attitude surveys, case studies, abstract conclusions
and competency discussions will likely have marginal impact.
Sure, strategy has become an over-used buzzword and gotten lost in the business jargon. Many of us know that IBM’s former CEO, Lou Gerstner, pooh-poohed strategy and went for tactics. Gerstner was talking out of both sides of his mouth, for strategically, he completely changed the business—and its customer, enhancing his firm’s long-term success and profitability. From the very outset, that was a strategic move.
At bottom, the truth is that far too few understand strategy, and that’s a problem. Indeed, half-a-dozen years ago, Christian Mitreanu asked in an MIT Sloan Management Opinion whether it was a bad word? He didn’t get around to a rarified definition of strategy, but he made an important point: strategy must include an ongoing cultivation of understanding the business’ customer, which is at the heart of the matter.
The ever-astute Roger Martin detailed this customer focus in a brilliant blog on strategy, entitled The execution trap. But at the least every HR manager and exec needs to put Michael Porter’s article, What is strategy? on the permanent front lobes and make certain that every HR move ties either directly or indirectly into the firm’s business. Porter argues that strategy rests on a unique set of activities that delivers a unique mix of value to the chosen customer niche. But you can memorize the rest of his seminal article.
Now, why did I quickly summarize the meaning of strategy and point my readers to three articles? Very simple: over thirty years of consulting, I’ve become convinced that very few companies have a valued strategy—yeah, strategy is tough to create and execute—and it’s a rare bird in any company that really understands his firm’s customer and his firm’s business.
What this means is that everybody in HR needs to be able to talk, create, think and execute HR tactics that tie directly into his firm’s strategy. That’ll mean that HR folk argue, fuss, disagree, collaborate and contribute magnificently to every single damn business discipline, beginning with their CEO. So what Ulrich needs, desperately, is example after example after example where his readers are shown exactly how HR’s every move ties directly into the firm’s strategy. Ulrich and colleagues should know enough about adult learning to realize that two-or three examples ain’t enough—and that the strategic competency need to be drummed into every HR reader’s head. The other five competencies should all be subsumed under strategy.
Until that happens, HR will continue to be a dead-end, talking about sets of HR competencies, and existing for its own sake, much like technology, glorying in its toys, existed for its own sake well into the ‘nineties.
The good news is that if HR reframes the challenge, it becomes an opportunity. HR can help build institutions that enable more of us to achieve our potential, differentiating us from machines, providing us with more job challenges and harnessing the people-power to set very big things in motion. And, oh yeah, then we’ll sit at the right hand of the CEO.
Flickr photo: Knowledge Capital