The current economic crisis could actually provide opportunities to be more strategic despite the challenges it poses, Dave Ulrich, professor of business administration at the University of Michigan, told top HR professionals. "A crisis is a terrible thing to waste," he joked.
Speaking to HR directors, academics and industry leaders at the HR Leaders Club, sponsored by Buck Consultants, at the Soho Hotel in London last month, Ulrich said: "In the current climate, HR is faced with a series of paradoxes. For example: should HR do nothing or do everything? These two co-existing extremes are dangerous.
"There are opportunities for growth through emerging markets and trying out new things," he added. "It is difficult to say which approach (all or nothing) will happen. But it is possible to take a middle ground."
Ulrich added: "Another paradox is the individual or organisational approach. HR could be making the mistake of focusing on talented individuals in organisations instead of looking at the talent of organisations as a whole."
Ulrich, famed for the HR business partner model and voted number one thinker in HR's Most Influential list for the past three years, also advised his audience to challenge investors to look at people when valuing organistions, as the real indicator of profit.
Commenting on where HR should be strategic, he added: "There are two sides to the job: transactions, which is about cost-cutting, and strategic transformation, which is about delivering real value. HR is all about the science of talent and capability." Instead of looking inward, he explained, HR needs to look outwards to the bigger picture. "The challenge now is to reduce cost but retain talent - to achieve greater growth at lower cost."
There was no shortage of comment from the audience. Helen Giles, HR director at homelessness charity Broadway, said: "Has HR shot itself in the foot? The quest to be strategic is like searching for the holy grail, but HR needs credibility. In my view the debate is all about what HR's strategic contribution is. The arguments over how HR can be more strategic are positively damaging to the credibility of the profession because they make it seem as though there is nothing intrinsically valuable about the core business of HR.
"We need to remember what our paymasters want," she added, "good people, engaged employees, to stay out of tribunals and so on, and strive to get better at these things. Being strategic means being clear about how these things are best planned for and implemented within the context in which the organisation operates and goals it has set itself. Nothing more, nothing less."
Commenting on Ulrich's views and the lively debate that followed, Anna Marie Detert, head of human capital and communications services at Buck Consultants, said: "In the US HR has offset a lot of transactional functions, which has freed it up. But in the UK HR still worries about delivering a business service to help and facilitate the line. HR will have to manage these series of paradoxes. HR leaders need to have a clear strategy as well as a clear operating function to bring them to the centre of business dialogue. It is not what they should do, but what they must do."
