Balanced ScoreCard

The HR Value Proposition:
A dozen things we know about organizations

Mexico City
October 2006
Dave Ulrich, Professor,
University of Michigan
Partner, The RBL Group (www.rbl.net)
dou@umich.edu
2006. The RBL Group. All rights reserved
The HR Value Proposition
Goals for HRLP and today
THINK:
About basic principles that affect people
and organizations
About practices that HR professionals and
leaders can use to implement these
principles
BEHAVE:
Do little things that make a difference
FUN:
Enjoy the experience together
Outline for the day
Challenges and trends for HR

The context
10 principles and practices
2 implications (HR organization and HR
professionals)
Implications for HR transformation
Overview of trends in HR
Context
Challenge/fundamental
message
Principles/practices
Context
Technology
Connectivity: always connected
Accessibility: no boundaries
Ambiguity: uncertain future
Industry/economic trends
Transparency: open book management
Adaptability: the need to change
Intensity: market conditions
Convergency: overlap of industries
Demographics
Mobility: movement of talent globally
Diversity: globalization of work force
Spirituality: a need for trust and values
G
L
O
B
A
L
I
Z
A
T
I
O
N
Fundamental Message:
value is defined by the receiver more than the giver
value is defined by the receiver
value is defined by the receiver
Human
Human resources
resources
Line
Line management
management
What we do?
Actions/behaviors
What we do?
Actions/behaviors
What we want
What we want
(values, beliefs, goals)
(values, beliefs, goals)
HR actions that deliver value
coach
facilitate
HR
professionals
architect
deliver and do
10
To provide value: principles and practices
Principles
(things we know)
Practices
(things we do)
1
2
3
4
5
6
7
8
9
10
11
12
11
Principle 1:
Competitiveness is not strategy, but strategy * organization
Challenges to strategic clarity
Principle 1
1. Focus: Formulation vs. execution/aspiration

vs. behavior
2. Specificity: Direction vs. destination
3. Referent: Customer vs. employee
So HR should:
Help create strategic clarity

with a focus on execution
12
Practice 1:
Facilitate strategic clarity
VISION: where we are headed
15 word exercise
"BULL'S EYE"
VISION
GOALS
Practice 1
GOALS: what we will track
ACTION
more of/less of exercise

ACTIONS:
what we will do
menu of actions and accountability

exercise
RESULTS:
how we will know
outcomes and behavior exercise
13
Practice 1
Practice 1:
14
Practice 1
Practice 1:
15
Principle 2:
Organization is not structure, but capability
Principle 2
Capability represents identity (reputation) of the firm

in the mind of the customer, investor, and
employee.
Do capability audit: given our strategy, what
capabilities
do we require?
Talent
Collaboration
Change/speed
Accountability
Efficiency
Customer service
-Shared mindset/culture
-Learning
-Strategic clarity
-Innovation
-Leadership brand
-
So HR should:
Do organizational audits that result

in 90 day action plans
16
Practice 2
Practice 2:
Do capability audits
CURRENT
CURRENT
STATE
STATE
FUTURE
FUTURE
STATE
STATE
STRATEGY
STRATEGY
CAPABILITY/
CAPABILITY/
ORGANIZATION
ORGANIZATION
ACTION
ACTION
RESULT
17
Practice 2
Practice 2:
18
Principle 3:
Change is not an event, but a process
Challenge of change: Turn what we know into
what we do.
Principle 3
Lessons of change (change disciplines)
Leading: establishing a leadership brand throughout the organization

consistent with the change
Creating a felt need: knowing why vs. what
Envisioning: having a clear sense of where we are going and seeing small
first steps to getting there (tipping point)
Engaging: getting buy in from everyone personal ownership
Decision making: translating visions into decisions
Institutionalizing: making change a natural act; a pattern not an event; a

part of the organization not an individual initiative
Monitoring and learning: tracking the right stuff and learning from it
So HR should:
Manage the process of making change happen
19
Practice 3:
Profile Change Disciplines
Applying change disciplines to a project or initiative
Practice 3
Very Good 10
Quality of process
Very Poor
0
Leading
change
Creating
need
Defining
direction
Engaging
stakeholders
Making
decisions
Dedicating
resources
Learning
adapting
monitoring
20
Principle 4:
Culture is not values, but a firm identity or shared mindset
PRODUCT BRAND:
Principle 4
unique attributes of product/service that elicit

customer response
FIRM BRAND:
identity of the firm in the mind of key
customers
(shared mindset)
So HR should:
Help define an identity or shared mindset

then make it real
21
Practice 4:
Create a culture change plan
What are the top three things we want to be
known for by our best customers in the future?
Practice 4
Top/down:
Top/down:
intellectual
intellectual agenda
agenda
Make identity
real
Firm
brand
Bottom/up:
Bottom/up:
behavioral
behavioral agenda
agenda
Side
Side to
to side/process
side/process agenda
agenda
90 day action plans
22
Practice 4
Practice 4:
23
Principle 5:
Leadership is not a person, but a brand
Evolution of leadership thinking
Brand: leadership is an identity throughout an organization
Results: leadership is about getting results in the right way
Principle 5
Universal principles/competencies: leaders possess

knowledge, skill, and ability
Situational: leaders vary style by situation
One best way: leaders have a style and physical attributes
So HR should:
Instill a process for leadership

brand development
24
Principle 5:
Leadership is not a person, but a brand
Declaration of leadership brand
Principle 5
Leadership
Brand
Leadership code
Leadership results
Leadership Brand Statement

Our leaders are known for.
25
Leadership as a Brand: leadership code
Human Capital developer

Developer
Delegator
Personal Tutor
FOCUS
People
TIME
Organizational strategist
Long term/strategic
Ambitious
Value Creator
Boundary spanner
Organizational architect
Personal
Proficiency
Organizations
Personal Proficiency:
Learner
Talent manager
Communicator
Motivator
Performer
Short term/operational
Energizer
Principled
Driven
Organization executor
Knowledgeable professional
Change disciplinarian
Decision maker
Team builder
26
Practice 5:
Inspire a leadership brand
1. NEED
Compelling case
for leadership
Practice 5
2. DECLARE
6. PUBLICIZE
Ensure
reputation
Declare leadership
needed for strategic
results
Leadership
Brand
3. ASSESS
5. MEASURE
Measure impact
of investment
Assess leaders
and leadership
4. INVEST
Invest in leadership
capability
27
Practice 5
Practice 5:
28
Principle 6:
Learning is not ideas, but ideas with impact
Learning is the ability to generate *

generalize ideas with impact
Principle 6
Individual learning:
Team learning:
teams
creativity, insight
high performing work
Organization learning: high performing

organization
So HR should:
Create learning disciplines
29
Practice 6:
Encourage learning processes
Learning Matrix
Ideas
1
Unit
Practice 6
C
D
E
F
Generate: rate 0 5 each cell

Generalize: move people and ideas
Reference: Steve Kerr
30
Practice 6
Practice 6:
31
Principle 7:
Principle 7
Collaboration is not democracy, but making the whole more than

the sum of the parts
1+1 = 1
1+1 = 3
Efficiency through:
Leverage through:
Technology
People
Facilities
Processes
Products
Customers
Services
Ideas
People
So HR should:
Help ensure both efficiency and

leverage
32
Practice 7:
Ensuring efficiency and leverage
Phase 2: Leverage
Practice 7
FOCUS: ideas, products, services, customers, people

Style: participative, engaging, sharing
Phase 1: Efficiency
FOCUS: technology, people, facilities, processes
Style: bold, decisive, quick
Actions: specific, measurable, time bound, accountable
33
Principle 8:
Customer service is not market share, but customer share
Principle 8
Principles of customer share
Customer not client.
While we all have internal clients,

but we must focus on external customers
(wallet or purse test)
Customer segmentation.
Some customers are more important

than others (key customers)
Customer value.
Define the desired outcome of key

customers
Customer connection.
Find ways to connect with key customers
So HR should:
Partner with target customers by engaging them
34
Practice 8:
Generate customer share
Steps to generating customer share:
Practice 8
1. Identify target customers (20/80)

2. Define their customer share and set goals
for desired customer share
3. Recognize customer value proposition
4. Build connections with targeted customers

Essence: the ideas from the customers

Presence: the involvement of the customers
35
Practice 8
Practice 8:
36
Principle 9:
Financial results are not cash, but market value (intangibles)
Principle 9
The correlation between earnings and market

value has dropped from about 85-90% to 50%
Two firms in the same industry with the same
earnings may have dramatically different market
value
Intangible: Anything in an organization that
generates value that you cannot drop on your

foot (The Economist)
So HR should:
Do an intangibles audit
37
Practice 9:
Perform intangibles audit
Organizational
Capabilities
Core
Competencies
Practice 9
Compelling
Strategy
INTANGIBLE VALUE
Keeps
Promises
Make and meet

commitments to
employees,
customers,
suppliers,
investors
Convincing
approach for
continuing to create
value and
extending that
ability into the
future
Clear ability to
realize value
creation potential
and to continue
track record of
keeping promises
Internal ability to
make things
happen efficiently
and effectively now
and in the future
38
Practice 9
Practice 9:
39
Principle 10:
Abundance
Principle 10
Employees have universal needs: meaning,

hope, learning, relationships, security, voice,
control, etc.
Organizations are a universal setting to meet
these needs
Abundant organizations exist when both
employees and organizations needs are met
So HR should:
Be the architects and stewards of

abundance
40
Practice 10:
Creating Abundance
Match individual needs with organizational

responses
Practice 10
Diagnose what individuals need and want

Create organization responses through
management actions, organization
processes, and enduring cultures
Define winning as the balance of caring and
compassion
with competitiveness
41
Practice 10:
Creating Abundance
Identity: who am I? What do I want to be
known for?
Practice 10
Purpose: what do I want? What are my

goals?
Meaning: what provides meaning to me?
What matters most to me?
Journey: how do I accomplish my goals?
Relationships: who do I work with? How do
I build a positive community?
Learning: what can I learn along the way?
42
Practice 10
Practice 10:
Creating Abundance
43
Principle 11:
HR is being divided into transaction and transformation
Principle 11
Past
Present
Future
Time and
resources
Transaction
work
Work
Transformation
work
So HR should:
govern transactions more efficiently
and transformation more effectively
44
Practice 11:
HR work: first transaction, then transformation
Transformation work
Practice 11
Define roles
(corporate, centers of expertise, embedded HR)
Deliver value in each role
Deliver capabilities required to win
Transaction work
Service centers
e-HR
outsource
Actions:
build transformation team, have integrated model, start small
45
Practice 11
Practice 11:
HR work: first transaction, then transformation
46
Principle 12:
HR Professionals deliver value
Principle 12
For HR professionals to deliver value:

Actions:
what we do
(coach, architect, facilitate, deliver)
Roles:
who we are
(employee advocate, human capital steward,
functional expert, strategic partner, and leader)
Competencies: what we know

(strategic contribution, personal credibility,
business, HR, and technology)
So every HR professional should make personal
commitments to upgrade actions, roles,
and competences
47
Practice 12:
Become a valued contributor
Personal action plan for HR professional

improvement
Practice 12
What do I want?
What are my options?
Who do I think?
What are the key decisions I need
to make?
What are the first steps?
How will I know if I am progressing?
48
Summary
Summary for the session:

Principles
Application
(things we know)
Practices
(things we do)
1 Strategic clarity
2 Organization capability
3 Change disciplines
Profile change disciplines
4 Culture as shared mindset
5 Leadership brand
6 Learning: ideas with impact
7 Collaboration: W > P
Ensure efficiency and leverage
8 Customer share
9 Intangibles
10 Abundance
Balance individual and organization needs
11 HR transaction then transformation
Manage transactions; lead transformation
12 HR professionalism
Become a valued contributor
49
The HR Value Proposition:

A dozen things we know
about organizations
Dave Ulrich, Professor, University of Michigan

Partner, The RBL Group (www.rbl.net)
dou@umich.edu
50
Caso de estudio - Swatch
Aprendizaje y
crecimiento
Procesos Internos
Clientes
Financiera
Garantizar la
Sustentabilidad
Financiera
Impedir la entrada
de la competencia
en los segmentos de
precio medio y superior
Lanzar nuevos modelos
Ser competitivo
en los costos
operacionales
Conquistar clientes
sensibles a
precios bajos
Desarrollar la imagen
de accesorio
de moda en Swatch
Garantizar alineamiento
interno
Alcanzar produccin
en masa con alta calidad
Desarrollar competencias
tcnicas

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The HR Value Proposition:

A dozen things we know about organizations

The HR Value Proposition

Goals for HRLP and today

The HR Value Proposition

Outline for the day

Challenges and trends for HR

Implications for HR transformation

2006. The RBL Group. All rights reserved

The HR Value Proposition

The HR Value Proposition

2006. The RBL Group. All rights reserved

The HR Value Proposition

2006. The RBL Group. All rights reserved

The HR Value Proposition

(values, beliefs, goals)

(values, beliefs, goals)

2006. The RBL Group. All rights reserved

The HR Value Proposition

HR actions that deliver value

The HR Value Proposition

To provide value: principles and practices

2006. The RBL Group. All rights reserved

The HR Value Proposition

Challenges to strategic clarity

1. Focus: Formulation vs. execution/aspiration

2006. The RBL Group. All rights reserved

Help create strategic clarity

The HR Value Proposition

VISION: where we are headed

GOALS: what we will track

more of/less of exercise

menu of actions and accountability

how we will know

outcomes and behavior exercise

2006. The RBL Group. All rights reserved

The HR Value Proposition

2006. The RBL Group. All rights reserved

The HR Value Proposition

2006. The RBL Group. All rights reserved

The HR Value Proposition

Capability represents identity (reputation) of the firm

2006. The RBL Group. All rights reserved

Do organizational audits that result

2006. The RBL Group. All rights reserved

2006. The RBL Group. All rights reserved

The HR Value Proposition

Lessons of change (change disciplines)

Leading: establishing a leadership brand throughout the organization

Creating a felt need: knowing why vs. what

Engaging: getting buy in from everyone personal ownership

Decision making: translating visions into decisions

Institutionalizing: making change a natural act; a pattern not an event; a

Manage the process of making change happen

2006. The RBL Group. All rights reserved

The HR Value Proposition

Applying change disciplines to a project or initiative

2006. The RBL Group. All rights reserved

The HR Value Proposition

unique attributes of product/service that elicit

Help define an identity or shared mindset

2006. The RBL Group. All rights reserved

The HR Value Proposition

2006. The RBL Group. All rights reserved