Dave Ulrich: Harnessing the evolution of human capability to create value
- 8 Min Read
Dave Ulrich explores the evolution of human capability and how this will set the foundation for HR’s continued value creation.
Many thoughtful colleagues continue to evolve HR by building on the past to create a better future. Much of this evolution comes from responding to the changing context of business (Covid-19, political toxicity, technology, ESQ, social patterns) and is captured with emerging insights based on innovative theory, research, and practice.
We have suggested and empirically shown (with three recent significant research projects: HR Competence and Capability Study (HRC2S) with 28,000 respondents, Organization Guidance System (OGS) with a thousand organizations, and Governance and Governance for Growth (G3) with 5,700 organizations) that the vast array of “HR” related initiatives can be clustered into a “human capability” framework with four pathways.
- Talent (often called “human capital”) deals with individual competence, people, workforce, and employees
- Leadership focuses on individual leaders at all levels as well as leadership capability throughout an organization
- Organization refers to organization capability, culture, workplace, teams, and systems
- Human resources (HR) defines characteristics of the HR department, practice, and people
This framework itself is an evolution of “HR” thinking, which has historically focused on talent (or human capital) as the HR agenda. Our (and others’) work shows that organization has far more impact on results than talent and that HR can be the architect of creating organization capabilities.
Figure 1: Integrated Human Capability Framework
Exciting and emerging ideas are occurring in each pathway. Let me offer an overview of some of the evolving ideas in each pathway, building on the superb work done by so many.
Talent refers to the people (individuals, employees, workforce) in an organization and how they are continually acquiring competence (knowledge, skills, ability) and developing sentiment (commitment, engagement, experience) to do their work.
- Accessing Competence to Accomplish Work
Putting the right person in the right job at the right time with the right skills is the legacy of talent management. This delicate matching effort created workforce planning where full-time employees are matched to job assignments. Talent, or the resource to get work done, has since evolved to include contingent employees in a workforce ecosystem and a focus on work skills more than jobs. More recently, work-task planning has emerged, which includes getting work done without formal jobs but by delivering on tasks either with people or technology.
Figure 2: Accessing Talent Evolution
- Improving Employee Sentiment
Employee sentiment (attitude, perception, response to, and so forth) about work continues to evolve, with emerging thinking about the employee experience that deals with emotional well-being and mental health tied to being safe, believing, becoming, and belonging. Additionally, organizations around the world are increasingly framing their mission and their work in ways that makes it easier for employees to be safe, believe, become, and belong amidst global upheaval and challenges.
Figure 3: Employee Sentiment Evolution
- Sustaining Diversity Equity and Inclusion (DEI)
Both in practice and in our research, DEI has become a major agenda for business and HR. We found that HR professionals who championed DEI were able to have higher business impact. We posit four phases of DEI work that have moved from tracking affirmative action numbers, to action, to strategy, to implementing two sustainable DEI beliefs and actions: everyone has something to offer and leaders use their power to empower others. Implementing these beliefs moves DEI from an aspiration to a commitment.
Figure 4: DEI Evolution
Organizations shape how people (employees, customers, suppliers, investors) think, act, and feel. The study of how organizations operate has evolved both in defining the organization form and in creating an organization culture.
- Reinventing Organization Form
The logic and design of organizations has evolved. Organizations were originally conceived as bureaucracies, with hierarchy being the dominant logic. They have evolved to where organization is not the structure of a firm but the capabilities, which are focused on building market value.
Figure 5: Organization Logic and Form Evolution
- Reimagining Organization Culture
Culture is not a new concept: its beginnings focused in anthropology and sociology. And in the organization setting, culture is accepted as a critical factor for long-term success. The evolution of culture goes from a focus on internal values and behaviors to an external identity in the marketplace made real to everyone in the workplace.
Figure 6: Culture Evolution
Leadership is one of the most studied topics in the human capability field (google leader and you will get six billion results; five billion for leadership). Individual leaders engage talent (people and workforce) and create organizations (culture and capabilities) through the competencies they possess. Collective leadership is when a leadership brand exists at all levels of the organization and the actions of all leaders throughout the organization are consistent. In our review of leadership, we identified five general leadership competence domains that characterize what we call the ‘Leadership Code’. This code has evolved with new leadership competencies required for changing business conditions.
Figure 7: Leadership Code: Five Rules to Lead By
- Defining Skills of Effective Leaders
The five code domains are relatively constant over time and place, but the specific skills have evolved depending on the changing external context. Figure 8 lays out in some detail the emerging skills given the recent business context.
Figure 8: Emerging Leadership Skills
In the human capability logic, for talent, leadership, and organization to occur, HR work (the function of HR and the people of HR) needs to be continually upgraded. Let me highlight some of the evolutionary ideas that indicate HR’s progress.
- Redefining HR’s Agenda and Purpose
Why does HR exist in a company? What value does HR create and contribute to business success? The mindset and assumptions of HR’s agenda and purpose have evolved from the “administrative experts” to true “business partners” who deliver value through four waves of activity: administrative, function, strategy, and outside-in value.
Figure 9: Evolution of HR’s Agenda and Purpose
- Improving HR Information/Analytics
When human capability issues are discussed with the management team, what information does the HR profession contribute as a member of the management team? Most HR professionals are aware of the need for analytics and evidence-based decisions, but the focus of the information that underlies analytics has evolved. HR often brings benchmarking (how do we compare) or best practice (who is good that we can learn from) information to business discussions. In our work, we have built on these legacies to offer guidance, which prioritizes and informs which HR initiatives will help each specific organization deliver the results they care about.
Figure 10: Improve HR Information and Analytics
- Leveraging Technology for Digital HR
In every list of future trends for business in general and HR in particular, technology is a (the) dominant agenda. At its simplest level, technology innovations (e.g., internet of things, machine learning, artificial intelligence, meta verse, robotics, and so forth) provide digital information to make better decisions. HR clearly contributes to a strategic digital agenda for their organization, but HR should also deploy technology for better digital information and practice in human capability. In the four-phase model in figure 11, most of the HR digital innovations remain in wave 2 with thousands of new HR apps being released every year. Using technology to access information and shape the employee experience are likely emerging steps in the technology and digital HR space.
Figure 11: Leveraging Technology for Digital HR
- Defining HR Competencies
Ultimately, HR services are provided (or at least designed and facilitated) by HR professionals. The skills and quality of HR professionals have evolved dramatically over the last 35 years, as has the profile of an effective HR professional including the CHRO, generalists, and specialists. We have been directly involved in eight rounds of research over 35 years to evaluate not only the competencies of HR professionals but which competencies deliver personal effectiveness, business results, and stakeholder value.
Figure 12: Eight Rounds of Competency Models for HR
Figure 13: Evolution of HR Competencies 1988 to 2022
In the eighth round of data from over 28,000 respondents and in partnership with 19 HR associations, we saw a conceptual shift in defining the competencies for HR professionals. Legacy HR competencies were about a role described with an adjective and noun (trusted advisor, credible activist, change agent, strategy ally). In our latest research, we used verbs instead of nouns. Verbs denote action and what HR does to be effective more rather than what or where they play a role.
Figure 14: HR Competencies as Verbs, Round 8
- Additional Areas
I have also seen additional exciting evolutions in learning, career management, communication, performance management, total rewards, change/agility, HR structure, and so forth. Add areas of evolution that you have seen in the comments.
In our work at RBL, we are committed to building on the past to create a better future. We know that other areas are evolving in the human capability field. These ten evolutions are based on insights (theory, research, and practice) and they are the foundation for HR’s continued value creation. By building on the past, HR will create a better future, and the best is yet to come.