'Organisations need to be competitive to succeed'

Prof. Dave Ulrich an influential international thinker in HR and author of over 25 books talks about his proposed visit to Colombo on April 30 and the topics he will address in Colombo.

Prof. Dave Ulrich was interviewed by Dinesh Weerakkody

Excerpts of the interview:

Q: Dave you are due in Colombo on April 30 for 12 hours to address the HR community in the morning and the CEOs in the evening? What are the topics you plan to address?

A: Organisations today compete not just by having financial, strategy, and operational abilities, but by building competitive abilities. These abilities come from talent, leadership and culture. Business leaders are ultimately responsible for managing these abilities, and HR professionals should be thought partners to make this happen.

I will review the ideas and specific tools for building strong organisations as CEOs, business leaders, and HR professionals.

Q: Sri Lanka envisages the creation of a knowledge hub to attract and retain the best and the brightest talent in the region and to attract FDI. Could you share some experiences based on your recent work in Singapore?

A: A country wins in the global FDI marketplace by having a focus, or uniqueness, just like a company in the consumer marketplace. For example, Ireland focuses on manufacturing and operations, Dubai on tourism and financial services, Switzerland on pharmaceuticals and Singapore on human capital insight.

The Singapore government, industry, academia, and labour, pooled resources to create a human capital leadership institute that would provide knowledge about talent and leadership to the region.

Q: You have had exposure to M and A in the US , what are some of the Business challenges surrounding M and A's?

A: In the past most M and A's failed because culture was not taken into account and 30 to 40% of M and A's reached their expected cost of capital. When culture is taken into account before the M and A, success rates get into the 50% range.

These cultural audits look at the cultures of each of the merged companies and try to reconcile them. But to get to the 60 to 70% range, leaders need a new definition of culture.

Instead of looking at culture as values, norms, expectations inside a company, they should start the dialogue on culture from the outside. What do we want the new firm (post M and A) to be known for by those who will use its services? This new culture based on the resources of the newly merged companies then endures because it is tied to and drives customer value.

Q: The HR profession for many years has focused on the internal customer rather than delivering value to the external customer. Has this changed?

A: HR roles and expectations are changing. In recent years, HR has connected with business strategy. Strategy was a mirror which reflected what HR professionals should know and do. But the mirror focused inside the company, not outside.

Now, instead of a mirror, HR sees a window to the outside world and anticipates that world so that the organisation can respond.

Instead of being 'employer of choice' HR needs to be 'employer of choice of employees and customers'. An external perspective means that HR understands not only general business conditions (social, technological, political, economic, demographic trends) but also expectations of external stakeholders (customers, investors, communities and regulators).

Turning these external expectations into internal actions brings sustained value to a company.

Q: Talking of talent, what are leading global companies doing to tap distinctive talent contributions and deploy talent more effectively to create lasting value?

A: Instead of starting with key people, big companies are starting with needs of key positions. Once position needs are defined through an outside perspective, key people can be matched through staffing, training, or development.

In addition, organisations are looking for people who are fully engaged, not just by their behaviour but by their hearts and minds. This work is in our book The Why of Work.

Q: How can organisational culture play a vital role in shaping talent and also manage the identity of the organisation in the mind of their key stakeholders?

A: Culture has often been thought of as norms, values, expectations, and behaviour of employees in an organisation. We like to think of defining culture (and leadership) through external expectations. What does a company want to be 'known for' by customers, investors, and others? How does this external identity (or firm brand) become woven into the organisation. When this happens, the culture is not just a value set, but an incredibly valuable value set because customers will pay a premium for it.

Q: What will the HR profession look like in five years and what are your predictions regarding the future of HR in a Business?

A: A discussion of the future of HR does not start with the function of HR, but with the needs of businesses. Increasingly, businesses succeed or fail based less on access to capital, unique strategies, or operational excellence, but on how to create organisational abilities that enable these business outcomes to occur.

HR becomes the architect and anthropologist to identify and create these abilities. This shifts HR from an administrative function to a thought partner function.