Conversation from a positive relationship has more impact on performance than the system or process

Dave Ulrich, the Rensis Likert Professor at the Ross School of Business, University of Michigan, wears multiple hats. He is also a partner at the RBL Group, a consulting firm dedicated to assisting organizations and leaders in delivering value. With an impressive track record, Dave has authored over 200 articles and book chapters, penned more than 30 books, edited ‘Human Resource Management’ during the 1990s, contributed to the editorial boards of four other journals, served on the Board of Directors for Herman Miller for 16 years, addressed audiences in 90 countries, conducted workshops for over half of the Fortune 200 companies, coached successful business leaders, and earned the distinction of being a Distinguished Fellow in the National Academy of Human Resources.

Ulrich’s hallmark lies in his unwavering commitment to learning, his ability to distill complex concepts into practical solutions, and his knack for creating tangible value for those he collaborates with. His vision centers around elevating human capability as the next critical agenda for both individuals and organizations. Ulrich shares his thoughts in an email interview with the HRM. Excerpts:

Q. Managing human resources is critical for any company/organization to deliver value to customers, investors and the society in which it is working in. What fundamentals would you like to suggest for human resources management?
HR 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. Thus in order for HR to continue successfully serving its key stakeholders, it needs to evolve from work on human capital to human capability (see figure Figure 4: Evolution of HR Agenda

The strategies and techniques in managing people by defining their roles and responsibilities within a result-based framework might require regular monitoring and inspection. Do you think these practices should be carried out independently or through some mechanism within companies/organizations?
Monitoring human capability requires a shared framework for what human capability means. Progress requires classification so that actions cumulate and build on each other. The human capability framework we have proposed offers four pathways and 38 initiatives that create an integrated system to categorize the myriad of people and organization actions. With this framework, we can integrate isolated actions and research studies into a holistic approach that improves human capability (figure).

Q. How best can companies/organizations deal with talents within their workforce?
Talent is also known as workforce, employee, people or individual competence. As noted in Figure 2, 10 talent initiatives may be pursued to upgrade the quality of the workforce.

What are the motivating factors in retaining human resources within companies/organizations and helping them deliver to the fullest of their potential?
HR is not about HR tools and processes, but about those tools and processes that can be used to create value for all stakeholders. See figure for stakeholders and the value they get from human capability.

Q. According to the Trait Theory, ‘leaders are born, not made’. Do you agree with this? How do people become leaders in companies/organizations?
Yes and no. We found that about 50% of leadership skills are ‘nature’ or something you are more likely to do by birth and heritage. The other 50% are ‘nurture’ and can be learned and adapted.

Q. How can leaders be groomed and made responsible/accountable to the company/organization as a whole and also with customers and the community?
Accountability has many dimensions: visions and actions; objective and subjective metrics; individual and organizational efforts; rewards and consequences; private and public efforts. An abundance of ideas describes how to improve performance management, set goals, measure results, manage rewards, give feedback, and so forth.

Let me synthesize (and overly simplify) this vast work on accountability into four steps (figure),

Step 1: Clarify expectations.
Accountability begins with clarity about desired outcomes, or expectations, which could be called vision, mission, strategy, objectives, intent or plans. These expectations result in goals that are not just SMART (specific, measurable, attainable, relevant and time bound) but that clarify expectations for all stakeholders.

Step 2: Establish metrics and standards.
Accountability turns expectations into measures (KPIs, OKRs) that can be tracked to ensure accountability. Measures rely on effective analytics to predict the impact of human capability efforts on desired outcomes and guide improvements by setting priorities.

Step 3: Allocate and ensure consequences.
Accountability requires consequences that matter. If someone meets or misses the desired metrics and standards, a good or bad consequence should follow.

Step 4: Have positive conversations.
In the figure, ‘have positive conversations’ is at the center of the four steps of accountability. Our work has consistently found that the conversation from a positive relationship has more impact on performance than the system or process. When leaders have skills to deliver both good news and bad in ways that engage, motivate and inspire others, accountability follows.

Q. In developing countries, human capital is given less priority in operations of companies/ organizations. How can HR professionals help change the orientation of the companies/organisations?
We have seen emerging markets go through four stages of development and HR plays a role in each stage.

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