Ulrich: HR must engage more with the outside world

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It's not enough to understand your business; HR must increasingly look outside to add value

HR professionals must become better at engaging with the outside world to add more value to their organisations, the University of Michigan’s Ross School of Business professor Dave Ulrich has said.

Ulrich, who in 2012 received a lifetime achievement award from the HR Most Influential rankings, was speaking at the HR Director's Business Summit in Birmingham about the concept of “HR outside-in”.

“Don’t look at what your business is struggling with, look at what your market is struggling with,” he said. “Instead of strategy being a mirror, make it a window. Look through your strategy to the outside world.”

Ulrich added that rather than seeing employees as its customers, HR should also see the organisation’s external stakeholders as customers. “Are we [HR] connecting what we do to the key stakeholders of the company?” he asked.

He argued that the debate about HR having a seat at the table had evolved. He said: “Now we are at the table, but what are we talking about? What information are we bringing?”

What HR should be bringing to the table, according to Ulrich, is information around talent, culture and leadership.

“Talent is important, but it’s not the only thing; we need to go beyond talent,” he said. “You fight a war through people, but you win through the organisation that you put together.”

Culture must reflect what customers have been promised, Ulrich added, as “culture becomes a pattern and an identity”.

He advised HR professionals to work with their colleagues in marketing to engage customers in organisational value statements, to see if the inside idea matches outside perception and needs. “When your internal culture reflects your external promises, you get value,” he explained.

On leadership, Ulrich spoke of the leadership rating index he is developing, revealed in HR magazine a few months ago. He said leaders must reflect the identity of the organisation, and investors are becoming increasingly interested in good, sustainable leadership.

“What is the market value of leadership?” he asked. “Investors care about leadership but they don’t know how to measure it. HR can play [a role in] the market value of leadership.”

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