Episode 231: How HR Can Shape Business Strategy and Prove Its Impact (with Dave Ulrich)
Is HR leading the business, or just keeping up with it? As complexity increases and resources tighten, the role of HR is under more pressure than ever. But within this challenge lies a powerful opportunity - for HR to become a driving force in delivering value to all stakeholders: employees, customers, and investors.
In this episode of the Digital HR Leaders podcast, David Green is joined once again by Dave Ulrich, Co-Founder of The RBL Group and widely recognised as the father of modern HR. Building on the success of his earlier episode with Stacia Garr, Dave returns for a reflective and practical conversation on how HR can step up to shape business strategy and deliver stakeholder value.
Join them as they dive deep into:
Why the HR role is becoming more complex
What stops HR from taking the lead, and how to overcome those barriers
What strategic HR looks like when it’s aligned to stakeholder value
The outcome-focused metrics that matter most to the business
How AI can support - or distract from - HR’s true purpose
The critical skills and mindsets HR leaders need for the future
Where work and employee experience might be headed next
If you're an HR leader looking to have more influence and impact, this episode, sponsored by Hibob, is definitely a conversation you’ll want to revisit and take notes on.
Hibob is a fast-growing new leader in the HCM market. In fact, according to HR tech guru Josh Bersin, HiBob is one of the few SaaS companies that have successfully cracked the code on user experience.
Josh Bersin says that Bob is not only feature-rich but genuinely enjoyable to use.
Read his review of Bob--as an HR tech analyst and user--at www.hibob.com/davidgreen2025.
[0:00:00] David Green: HR leaders are being asked to do more with less and in more complexity than ever before. But how do we shift from reacting to business needs to shaping them? I'm David Green and today on the Digital HR Leaders podcast, I'm joined once again by someone whose thinking has shaped the way we understand the role of HR in business, Dave Ulrich. Often referred to as the father of modern HR, Dave is the co-founder of the RBL Group, the author of more than 20 books that have shaped our field, as well as the author of the Human Capability Impact LinkedIn newsletter, which has over 200,000 avid subscribers. Following the very successful episode with Dave and Stacia Garr earlier this year, where we explored the top priorities for HR in 2025, it felt timely to bring Dave back for a deeper, more reflective conversation.
With decades of experience advising organisations around the world, Dave offers a unique perspective on how the HR function has evolved, why the challenges are intensifying, and what's needed to deliver real impact in the years ahead. So, in our discussion today, we explore how the role of HR has evolved, why it's become more challenging, and what needs to shift for HR to move from reacting to shaping the business agenda. We talk about what real strategic HR looks like, how to measure what truly matters, and how AI could help or hinder our ability to drive outcomes. And as always, Dave shares practical advice for HR leaders looking to build influence, lead with purpose, and prepare for what's coming next. This is definitely a conversation you'll want to save, revert back to, and take notes. So, without further ado, let's get the conversation started.
Dave you've been one of the leading visionaries in the field for as long as I can remember, and I'm sure you've seen how HR's role has changed over the years. When you reflect back on your career and how the field of HR has evolved, what do you think's changed and what's making the role of HR arguably even more challenging than ever today?
[0:02:19] David Ulrich: Well, first of all, thank you for having me back. I enjoyed the session with Stacia. It was a wonderful opportunity to share some ideas and to learn with and from her. If we think about change, we don't start from the inside, we start from the outside. The world around us is changing. If you go back ten years, and I was thinking about that, David, what's happened in the last ten years in the world around us? We've had military conflicts, we've had political elections, we've had social trends, we've had economic trends. All of those outside things create an incredible sense of uncertainty. Uncertainty is not new. VUCA was formed decades ago as a concept, but it seems like some of the pace of that has just picked up, especially around technology and political and social, because we have so much transparency. It's amazing how fast ideas will move, and I think back just ten years ago. And then we've had the jolts, the pandemic.
In all of that, what I think we've seen is in the world of uncertainty, HR matters more. There was some research done by a doctoral student a long time ago, and he said, "Does HR have more impact on business results?" And the answer was bifurcated, (a) in a world where the future is much the same as the present, not much, because we put in place a system and the system takes care of itself, it's self-sustaining; (b) in a world that's changing, that the future is not predicted based on the past, HR has a huge impact. I think that finding from a long time ago is even more relevant today. We're seeing a lot of uncertainty, we're seeing a lot of movement. And in that movement, what we're seeing is HR becomes centre stage. You know as well as I do, you talk to business leaders, not just HR leaders. This is not an HR issue. It's showing up at Davos, it's showing up at WOBI and the World Business Intelligence, it's showing up on regulation and government reports. People are paying attention to the human issues.
[0:04:17] David Green: Yeah. It does seem, and I'm not sure if it's because I'm getting older, that things do seem to be happening much faster than they did ten years ago, to your point, Dave. But you're right, when you actually think back ten years, so much has happened. Now, I suppose we could say the same between 2005 and 2015, but it seems a lot more has happened in the last decade than previously happened. I think probably technology speeds things along as well, of course. So, as you said, even if you want to avoid what's happening in the world around politics, for example, which we won't get into, of course, you can't avoid it because it's everywhere. Whereas, back in the day, you just didn't watch the television or read the newspapers and you'd be fine. But here, it's everywhere.
[0:05:02] David Ulrich: Yeah, it's pervasive. I mean, and technology is an access to information. And so, the information we've got, a tree falls in London and we hear about it in Buenos Aires. A tree falls in Buenos Aires, we hear about it in London. And suddenly, the world is smaller in terms of some of those issues. And as a result of that, I think we just have to learn to respond, that our ability to respond becomes even more critical. And the responsibility in a company is around the HR issues, no question.
[0:05:31] David Green: So, you've always been a strong advocate that the HR should be driving the business, not being driven by it. What do you feel stops HR from taking the lead? And maybe you can blend into that as well perhaps, Dave, how can HR help organisations manage through periods of uncertainty?
[0:05:52] David Ulrich: You know, I'm going to answer that in a funny way. I think that one of the biggest challenges for HR taking the lead and fulfilling their opportunity that we've just talked about is changing the mindset. Imagine meeting with a group of HR people. You do it, I do it, David, it's a privilege. "What's on your mind today?" I love to ask the question when I teach a class, "What's the biggest challenge you're facing in your job today?" And I don't let people name a person, that would not be very politically correct. And they often put down, "I'm trying to manage hybrid work, I'm trying to manage agility, I'm trying to manage mental health". And as I listen to those challenges, the thing that strikes me is the mindset of most of us in HR is, "What's on my plate today, and what do I have to do now?"
I think the biggest challenge is thinking broader about what we do. And so, it's not about doing mental health, hybrid work, employee relations, employee experience. It's about using those sets of ideas to create value. So, what I love to say to folks is, "Put a 'so that' behind it", "Today, I'm worried about employee experience, so that… Today, I'm worried about hybrid work, where people work, so that... Today, I'm worried about leadership, development, culture, agility". Whatever one of your hot topics is, "Today, I'm worried about analytics, so that…" And the 'so that' moves me to a dramatic place, because then the place is not about the HR activity, it's the outcome. And once we begin to get that mindset, I had a call recently with a group of HR people. All of their focus was on where they spend their time every day. Well, we need to look beyond that and to see more powerfully what we can be doing. I get excited about that. I get locked in as well to what's present, what's on my job today, rather than thinking outside-in, "What am I doing today that will create value for a stakeholder?" That's the question.
[0:07:50] David Green: It's just taking that step back sometimes, isn't it? I know when you kindly spoke to our Insight222 group of clients in Colorado, I think it was about 18 months ago now, and you started off with the 'so that', there were some extremely bright people in the room, they're Heads of People Analytics in big global Fortune 100 firms, many of them, but I think it had a lot of impact. And I've had several conversations with some of the people that were there since, and they said that that simple thing of saying 'so that', that you suggested people think about, has actually changed the way some of them work as well. Because it's so easy to get lost in the day-to-day, isn't it, that sometimes you need to put your head above the parapet and say, "Okay, well, why do I care about hybrid work? What's the impact I'm looking to have, the outcome I'm looking to affect for my organisation, or for our employees?" And if anything, that should help motivate you, if you can think of the right outcomes, that is, of course.
[0:08:48] David Ulrich: Yeah, it's so critical. And I get excited about our field. And, David, you are a thought-leader who I learn from, and I appreciate. I enjoyed being in Colorado with you. What a beautiful fall day we had. And even more fun was the session. I had an insight that, how does HR change its mindset? And it's where we think. For example, in HR for years, and your work is classic of that. I see that if you're watching this on video, there's your book on the shelf with Jonathan. It's such a great book, I strongly endorse it. We link HR with business results. So, I'm going to do employee experience, what's going to be the financial impact? Return on capital employed, profitability. Here's the insight I've had this year, and it really bugs me that I didn't have it five years ago, business results are a lag indicator. You don't report business results for next year, you report them for the last week, month, or quarter, or year. So, what we've been teaching us in HR is, be a lead indicator of a lag result. Well, that doesn't make sense.
So, it hit me this year, what's the lead indicator of business results? What drives business results, for the future, not the past? And it's not complicated, it's a customer. Will a customer buy more product? If yes, then the business result will follow. It's an investor, will an investor have more confidence in your cost of capital, in your intangible value? If yes, the business results will follow. So, where I think HR needs to change its mindset, become a lead indicator of the lead drivers of business results. Don't predict through HR what the business results should have been last year. Use HR to drive customer, investor, and community value, so the business results next year will be higher. That mindset changes. And here's an application. We have a business meeting, lots of business meetings, HR's got an agenda, "What are you focused on this year?" And think of a PowerPoint, and it could be what we listed, and we could list a lot of things, leadership, employee experience, hybrid work, wellbeing, a whole bunch of important things. I think those are not the first three slides. I think the first slide is, "Here's our customers, why they're buying from us. Here's our investors, why they're investing in us. Our cost of capital, our intangible value, our market value. Here's our community reputation. I'm in HR today, I'm here to drive those outcomes. I'm not here just to talk about work, and HR work, I'm here to create those outcomes".
So, for me, the conversation of HR has fundamentally shifted. I call that stakeholder value. And here's the final aha with that logic. And I've talked too long, and I know it, we may be off-script already. We call ourselves 'human resources'. It hit me also this year, which is a blinding obvious, who are the humans in human resources? And everybody says, "Well, I'm here to take care of employees". True, that's a human being. Here's an obvious insight. The executives are human beings, "I'm here to help them get their goals met, of reaching strategy and financial results". The board of directors are human beings, "I'm here to help them get their goals met, of guiding the company". Here's an insight, a customer is a human being, "I'm here to help that human being make a choice to use my product or service, not another". An investor is a human being. By the way, someday they may be agents and we could debate that, but an investor is a human being, "Why are they buying what I'm offering; and why are they giving us investments?"
The communities where we live and work are filled with citizens and human beings. So, for me, the 'human' in human resources are the stakeholders. And our job in HR is to be a lead promoter of the value they get. Now, that sounds really complicated because there's a whole bunch of lead and lag junk in there. The action item is 'so that'. The other action item is, in every conversation, don't start with HR. HR is not about HR, it's creating stakeholder value.
[0:12:54] David Green: A shout-out to our sponsor for this episode, HiBob, a fast-growing new leader in the HCM market. According to HR tech guru, Josh Bersin, HiBob is one of the few SaaS companies that have successfully cracked the code on user experience. Josh Bersin says that Bob is not only feature-rich but genuinely enjoyable to use. Read his review of Bob, as an HR tech analyst and a user, at www.hibob.com/davidgreen2025.
I know we've spoken about that in the last few weeks as well, Dave, and I think it's an agenda I think we can all get excited about. As you said, it's a change of mindset for most HR leaders and professionals, where maybe the stakeholders that we've focused on pretty much exclusively up to now are employees or leaders, those within the organisation. I think what you're saying there is, think broader and think about those outside the organisation, those stakeholders outside the organisation. So, if we think around maybe practical terms in how HR professionals can change that mindset and become maybe more of a truly strategic HR function, what guidance would you give to HR professionals and leaders listening, around how they can do that and how they can actively shape business strategy in that respect as well?
[0:14:46] David Ulrich: I'm going to go back to a word I used before, David. Change the conversation, who you talk with. Am I an HR person spending time with customers, with investors? I remember a Chief HR Officer. We asked her, "What do you share with investors?" In her comment, this was very recent, I won't name the company, it was a large company, "That's not my job. I don't meet with investors". And I'm going, "Then, why do you exist?" I mean, if the investor isn't getting value from what you're doing, that's a key stakeholder. So, conversation, who we meet with. Go to investors, go to investor calls, meet with investors, go visit with customers. I love to encourage HR professionals to go on customer visits, because what we say to the customer is, "We're not just selling you a product or a service. We're building with you a relationship. Now that I sit with you as a customer, I can get a sense of what you value from us as a company. I'm going to hire, train, pay, organise, communicate. I'm going to do the HR systems that give you what you need". Begin to spend time with new people. That's conversation.
Second, our conversations in HR, I think, are less about our activities and more about the outcomes. I said it before, we go to a meeting, we're going to talk about an HR leadership development programme. Wonderful idea. So, don't start with that. Customers are expecting us to be more innovative. Here's the evidence, as I've spent time with my marketing people, they need us to be a more innovative company. Therefore, here's what we're going to build into our leadership programme, because innovation matters. Or customers are saying right now in our marketplace, "It's cost, we've got to drive costs down. Therefore, this is what we're going to do". And I think when we begin to get that outside-in view, that's not just a strategic function, it's a value creation function.
Here's the metaphor again, and I keep going back to the same message, trying to find new ways to say it, strategy is a mirror. In the mirror of strategy, we do our job. Change the mirror to a window. Look through the strategy to the outside world and say, "So, who's the customer? Who's the investor? Who's the community? What's going on out there, and with competitor?" so that we can begin to build what we do inside? And I can give one very quick example. I meet with business leaders periodically, quite often, actually. And I say, "I'm here to talk about culture". And immediately, their eyes go, "Oh my gosh, here he is again. Bring a pet to work, have a good-friend day". Let me suggest to the business leaders three things. Take your cultural values that you've created to your best customers or your future customers. Ask them three questions.
Number one, "Are these the values you want us to be known for: we value collaboration, we value innovation, we value integrity, we value service?" Almost always the customer will say, "Yeah, those are good". Question two, "What do we have to do in your eyes, as the customer, to show that we live them? What does service mean for you; what is collaboration; what is efficiency; what is innovation?" And the customer defines the behaviour, not an offsite with a management team. Question one, "Are these the values you want us to be known for? What does that mean to you? And question three, "When we do those things, will you buy more from us?" The business leaders in question one, they go, "That's interesting"; question two, "That's interesting"; question three, "You mean there's value in values?" "Yeah. If our values don't translate to you buying more from us, why do we have them?" That's the mindset of HR outside-in, of creating stakeholder value.
What I just described, an HR person could engage in that process and really begin to say, "I'm now part of the business agenda. I'm not an afterthought, I'm not going to follow strategy, I'm going to shape the business with you". Will the customer buy more from us?
[0:18:48] David Green: You'd think so, wouldn't you?
[0:18:50] David Ulrich: You'd hope so. By the way, if not -- one of the funniest ones, I did this a number of years ago, their number one value was to be the most profitable in the industry. Take that to a customer, "Hi, my biggest goal is to be the most profitable in my industry", and the customer is going to go, "Not on my watch. I mean, you're going to overcharge me every time you can". It also validates what we've got. And then, it's the value of values, it's the 'so that', it's the conversation. All of those themes are around, our job in HR is to deliver stakeholder value, to make our stakeholders better. And that will lead to the financial results that so many of us have written about.
[0:19:28] David Green: What are some of the lead indicators that HR should focus on to demonstrate its impact on customer satisfaction and investor confidence?
[0:19:36] David Ulrich: For me, the first question is prioritisation. I think we see a host of HR initiatives coming out. And I'm going to reinforce again, because I think if somebody listens to this, what I hope they get the most is your mindset. I've listened to your podcast, and I was going to go back and listen to a lot of your podcasts with brilliant folks, you interview the best of the best, and do a little bit of a content analysis. If I had it, I'd have AI do it, "What percent of time did the people you interviewed talk about their customer as the outside customer, their investor, their ability to form strategy?" When I listen to some of your podcasts, I'm just listening and going, "Well, that was interesting. They're doing some great work on performance review. They're doing great work on accountability. I don't see us making that bridge as much as we can.
So, what does that mean for analytics? Where I think analytics are going to go is in correlations and predictions. I'm focused today on employee engagement. That leads to mental health, that leads to flexible work. We've written lately about the importance of hope and how do you build hope into the organisation so that customer engagement goes up. So, here's the analytic I want to look at, not a mean, "How much did you provide hope to the employee?" but a correlation, "How much did the hope you provided to employee correlate with customer engagement in your company?" And so, I think some of the analytics are going to be much more around the impact of what we do on the outcomes for the customer. And when we begin to look and leave means alone for a minute, and focus on correlations and regressions and impact, the cause effect is always fuzzy, but there generally is some cause and effect. "If I do this with employees, here's what I'm going to see". That's the stuff I hope starts to show up in our analytics, that we're not just measuring activity.
Now, I have to say one other thing about the danger of analytics today, since you're the analytics expert. It's my passion. The other insight that was flashingly obvious, we love to report means. Here's our mean score on performance appraisal, employee engagement, leadership development. We get a mean of three. Well, what does that mean? "The mean is a mean thing", that's a quote from one of my friends. Here's the danger. It's a mean of three. What were the respondents? Three, three, three, three, three. A mean of three. What were the respondents? One, two, three, four, five. A mean of three. One of the things I want to see in analytics is looking at variation, because if we only look at the mean, we don't really understand what's going on. The first mean of three with all threes says, "My job in HR is to be as good as everybody else", there's no variation in the field. The mean of three with one, two, three, four, five says, "I want to be a five and I have a variance higher than somebody else". That's called differentiation. In business, we win by differentiating our products. In HR, we should win by differentiating our HR practices. So, the measures I look at, regressions, correlations, and predict outcomes, variance, where I can differentiate.
Now, the other measure of activity, if I would now, "So what does that do with my calendar participation, or how much time do I spend with customers, either with them personally or with marketing people? How much time do I spend with investors? Am I spending my calendar with the people that will be the lead drivers of the outcomes I care about?" So, I think we'll continue to have benchmarks around turnover, benchmarks around diversity. For example, I think sometimes the diversity agenda, and I may get in trouble with this, but I'll walk into it, gets misplaced. Diversity is variance. We want diversity, we want variance. Why? So, that we can create better products for our customers. And if we start by saying, "My customers are all over the map, how do I begin to create products that all over that customer variance will work?" Well, I need people with different backgrounds, I need people who come from different geographies, different training, different schools, different races, different ages, so that collectively, our variance in diversity creates better products and the investors will see the benefit. That's the agenda that so excites me, that analytics is not about means and scorecards, it's about prioritisation, regressions, predictions, and differentiation.
[0:24:59] David Green: I want to take a short break from this episode to introduce the Insight222 People Analytics Programme, designed for senior leaders to connect, grow, and lead in the evolving world of people analytics. The programme brings together top HR professionals with extensive experience from global companies, offering a unique platform to expand your influence, gain invaluable industry insight and tackle real-world business challenges. As a member, you'll gain access to over 40 in-person and virtual events a year, advisory sessions with seasoned practitioners, as well as insights, ideas and learning to stay up-to-date with best practices and new thinking. Every connection made brings new possibilities to elevate your impact and drive meaningful change. To learn more, head over to insight222.com/programme and join our group of global leaders.
And everything you've said there, Dave, particularly thinking about the outcomes, the business outcomes that you want to impact, whether they're for customers, whether they're investors, whether there are other business outcomes, what that suggests that we need to do as well in HR is we need to collaborate more with our peers in the business. So, marketing is the example you gave around the customer. We need to work more closely with marketing, because it's all very well understanding what employee engagement is. But if we want to understand how it correlates with other business outcomes, like customer engagement, for example, let's just pick one that we all know about, you're going to have to get those two data sets together and you're going to need to understand what that is and you need to ask questions around that as well, with people who really understand that deeply. And that's where you potentially get executives excited, if you find a link. And suddenly, the impact that you can have as an HR professional is scaled significantly.
[0:26:01] David Ulrich: Oh, and I mean let's stay in the marketing domain advertising. A company spends 10 million on social media advertising and they're trying to build a brand. One of the things we've argued with the four largest ad agencies, and they've not all bought this yet -- by the way, what we're talking today is about what's next, not what's always here. You spend 10 million on advertising. You're building a brand, you're building an identity, why not spend 5% to 10% of that on leadership development, so that what you're promising the customer through your social media, your ads, your promotions, we're promising customers innovation, we're promising customers cost, we're promising a great experience. That's what we're going to train our leaders to do. So, if the advertising agency is connected with the learning and development team, our learning and development team and the ad agency go together. So, in the learning and development workshop, we bring in the ad agency. And they start saying, "Here's what we're getting customers to see about our products and services. You're going to build that into leadership behaviour". And you can take the next extension, "We're going to build it into talent acquisition, promotion, performance management". Suddenly, you get a line of sight between that external value and the internal actions in HR.
[0:27:14] David Green: I'd love to hear your thoughts on using and maybe not using AI in HR.
[0:27:20] David Ulrich: Let me tell a story that happened this week. I'm working with a company that does meat processing. So, they have meat processing plants around the world. They want to find out what are the skills of a manager of a meat processing plant in Brazil, in Sri Lanka, anywhere in the world. So, they go on AI and say, what are the skills? And we're getting better at queries, because we're asking better questions, and they get a list. And when I met with them, they said, "Look, these are the skills of a manager in a meat processing plant". I said, "What are you going to do with it?" and they said, "Well, we're going to build training around it, compensation". I said, "Don't go there". And here's a simple question, "What percent of your competitors have done the same thing? Every one of them".
What AI does is it gives us homogenous, similar data. That's the meme, three, three, three, three, three. You're not going to differentiate with AI because everybody's using AI. We all go to the workshops, and the winners in that argument are the people that build the AI tools. I said, "Use AI to get a benchmark of what everyone else has done". And then back to the variance, now you put human wisdom around it and differentiate, "What will the plant managers in our plants do that are different, so that he or she can differentiate in the marketplace with our customers in a unique way?" I think AI is an incredible tool for summarising what's been done. It's a risky tool when you base decisions on past, not on the future. And also, I think it makes us a little bit sometimes lazy.
I'm admitting I was lazy with you. I went online and said, "What are the most common tools for measuring HR?" I was a little lazy, I probably could have come up with some of them. But I look at those and I go, "Good. Everyone who does an AI query is going to get the same list". If I'm in a company wanting to differentiate with a customer or an investor, I've got to be able to figure out what's unique about me; what's my brand that's different? And then, AI becomes a very useful tool, it becomes a very useful tool. Now, there's other uses for AI. One example I think we're going to see, and again, I'm consumed with it, because I've been thinking about the theory of variance and I couldn't find one, so I was trying to create a theory of variance, the importance of variance, is we love to use AI to find the same, we love to use our skillset to find different.
Here's an example again, another example. A professor friend of mine teaches sociology. She now has students turn in two papers. Paper one is the AI paper, "What are the social demographics that affect marriage rates in Europe? What are the political consequences of a conservative movement around the world? Turn in your AI paper, and then turn in your paper. If your paper doesn't add to what the AI paper had, there's no variance and you haven't succeeded". I kind of get excited about that. AI is an incredible provider of information that tells me what's been done. It doesn't give me insights about what we should be doing as we go forward.
[0:30:19] David Green: So, as we move to the last few questions, Dave, again, you've talked to this a little bit, but for us maybe again, a lot of the people listening to this episode, they're not HR leaders today, but maybe they aspire to be an HR leader, maybe a Chief People Officer in the future, what do you believe are the most critical skills and mindsets they need to develop to play a strategic role in shaping the business?
[0:30:46] David Ulrich: I love this question, because on LinkedIn sometimes you have people say, "Here's the skills, what do you think?" and we get a survey of 50 people. That, by the way, is also a danger of AI because AI will see that survey. We actually have done research. Now, it's survey-based research and we've done it for 30 years, 120,000 people. We've changed our mindset. We used to have an adjective and a noun. You need to be a credible actress, business partner, change agent, paradox navigator. Now, what we found is you have to have a verb. For you to succeed as an HR professional, doing the things we've talked about, you have to be able to accelerate the business. That's interesting, by thinking outside in. You've got to advance human capability, we haven't talked enough about that. Human capability is not only talent, it's also organisation and leadership. You've got to advance the knowledge about that. You've got to mobilise information, that's using AI to make better decisions. You've got to foster collaboration, become a partner, collaborate, foster that. And you've got to simplify complexity.
Our research, last time we had 28,000 people, that was what we found. Those five factors had impact, not just on how you were seen as an HR professional, but how your skills as an HR professional drove business results, financial, and customer and investor results. So, you don't have to remember those five. Here's the headline, it's a verb, not a noun. When you say, "What's the skill for a good HR professional?" say, "What's the verb?" Accelerate business, advance human capability, foster collaboration. Now we put those together, but think of verbs. I'd love to ask you, if you had to say, "This is the set of verbs I want my HR people to know", you knew I was going to ask you a question, what are the verbs that come to your mind?
[0:32:33] David Green: I mean, I can take a really easy way out and say you've just described them, Dave, but I think it's basically connecting what we do to the business.
[0:32:43] David Ulrich: I love the verb.
[0:32:45] David Green: What are the big business priorities that our organisation's got? And let's make sure we spend our time, or most of our time, back to your prioritisation point, let's focus the work that we're doing, or certainly the big investments that we're making in HR, let's focus on trying to impact those outcomes positively.
[0:33:02] David Ulrich: I love it.
[0:33:03] David Green: And you mentioned guidance. I know you and your colleagues at the RBL Group have done a lot of work around this. For those listeners that don't maybe know that work well, I don't know if you just want to give a quick synopsis of what you mean by guidance and what you found as well?
[0:33:20] David Ulrich: Assume you go into a grocery store, large store. There's often 30,000 items. I could probably tell a personal story that's kind of sad, but you don't just walk up and down the aisle saying, "Well, what strikes me today? Is it bleach; is it bread?" You've got a menu. You've got something in your mind that's saying, "This is what I want to get". I'll tell the story. It's kind of sad, but it's more personal. My mom had, as she aged, dementia. So, I'd take her to a store, and she'd get a basket, and she'd walk up and down the aisles and just put random things in the basket. And then, I'd put them back. And I thought, sometimes that's what we do in HR. We just put random things in the basket because they look appealing for whatever reason. What guidance says is, what's the menu that's going to guide what I get in the store? What a simple metaphor. And it applies everywhere. It applies in investment, it applies in school, it applies in restaurants. How do I figure out where to prioritise my focus? That's guidance. And the common guidance is, "Well, it feels right. I get this warm feeling". That's not a very good measure. And we even try to measure that, "How much do you feel committed to this?" Why?
I think the guidance mechanism, the North Star, if you use Steve Covey's word, is value to the stakeholders, "Will this investment create value for my executives who want to deliver strategy, my customers who want to get products, my investors who want financial returns, my communities who want reputation?" And when I use the North Star of guidance as the mix of stakeholders, then I know what to pick from the HR supermarket.
[0:34:53] David Green: And it's back to what you said earlier. If you're a Chief People Officer who's being given a billion dollars to invest in people over the next year, if you can get some good guidance on where to invest that money, you're far more likely to produce a return.
[0:35:9] David Ulrich: Well, and that's why she said, "Why am I investing this money to get basket size from 40 to 48?" The next year she comes in and says, "The average basket size is now 42". "Oh, we're going to now give you more because you've proven it. You've demonstrated that you can get a, whatever that is, 5% increase in basket size. Boy, that's a pretty good investment". And I think that's the mindset that if we play, that it gets me excited about what HR has to contribute.
[0:35:36] David Green: So, Dave, a couple more questions before we get to the question of the series. I know you and me could probably talk for two hours, but our producers might not be so happy! If I could ask you to peer into your crystal ball for a moment, where do you think HR and the world of work will be in the next ten years? We started with looking back, let's look forward.
[0:35:55] David Ulrich: You know, I wish I knew, because I go back ten years, I could not have predicted. Think back where you were. Somebody just sent me a picture of myself at 2015, my younger brother. You look the same, I look so different. My weight's gone up and down and a whole bunch of stuff. But I think there are some meta themes. Let me just say a couple of them. One, I think we're going to get focused on performance. I'm going to do four Ps. Let me do four Ps, top of my head. Performance, it's not what we do, it's the value we get from what we do. A second P is prioritisation. I think we're going to continue to see a wealth of opportunity, where we can invest. I look at your shows, I look at others who produce research. It's just overwhelming, consulting firms, research. So, how do you prioritise based on performance?
A third P for me is paradox. I think people love to say we're going 'from to', from operational to strategic. The answer is we're operational and strategic. Every time I see a from-to chart, I go, "It's 'and also'". And I think we're going to see some amazing paradoxes, AI technology, and also human insight. You are going to see both, long term and short term, top down, bottom up, inside out, and outside in. I think we're going to learn to live and navigate this incredible paradox, which isn't a new idea. That's Chinese, yin yang. Great teacher, Jesus, if you believe in teaching. Most of what he taught was paradox, "The meek shall inherit the Earth". And so, it's not new, but I think we're going to see an incredible amount of paradox.
The final P for me, performance, prioritisation, paradox, is personalisation. And it's a paradox. I think in a world of rich information, we can personalise decisions and at the same time, scale them. So, how do I personalise what works for you at this time in your life? If you have teenagers, you've got a different lifestyle. When they're gone, you still personalise. And I think we're going to see technology enable us to personalise. So, those are four kind of generic trends that I see.
[0:38:01] David Green: And, Dave, I know you're always working on new initiatives. You talked about your aha moment this year, around looking at spending more time with customers as HR professionals. Is there anything exciting that you're working on at the moment that you'd like to share with listeners?
[0:38:19] David Ulrich: Let me just list a couple. I think that issue of prioritisation, we see a preponderance of new products. Every human capital firm is creating new AI solutions, consulting firms, we're not doing a good enough job with prioritisation. We're trying to find a way to do that at scale through AI. We're taking the OGS we did, we're taking G3 we did, when we scaled Human Capital reports from the SEC, and we're trying to create an HR agent that will wander through your data and tell you where to focus. We have a bunch of knowledge warehouses. I'm sure you get asked all the time, "Can I take all of your content and put it into a warehouse so people can access it?" I'm sure everybody's asking you that, you're probably doing it. My question is not that, it's, "Of all the things David's done in your podcast and your writing, which one should I use to create the most value? Can we find an AI prioritisation app?" And the other is, "How do we reinvent the HR professionals?"
You're a part of it, I'll be transparent. We've got an incredible advisory board trying to say, "Where do HR professionals need to go?" I don't need to go to a training programme that gives me the six steps of succession, the four elements of performance review. I need to change how HR professionals think and do their work. We're in the process of manipulating that and creating that. And I have six words, "Can you deliver stakeholder value through human capability?" That's the development we're doing. And then define the analytics for that.
[0:39:48] David Green: Something else, you mentioned the word 'hope' earlier.
[0:39:52] David Ulrich: That's where I wanted to go.
[0:39:53] David Green: We all need a little bit of hope at the moment. And that actually is the question of the series. So, on this series of the podcast, we're asking this question, Dave, so I'm teeing you up here hopefully for that. How can HR use AI, and maybe it's not AI, maybe it's other things, how can HR improve employee experience and wellbeing? What should we be focused on?
[0:40:15] David Ulrich: Employee experience and wellbeing is not new. We used to call it motivation, we called it satisfaction, commitment, engagement. Our view is, I love the metaphor of hope, because hope is focused on the future. It's about what you can become, it's efficacy. If I work, I can achieve this. It's optimism. It's what's right, not what's wrong. And it can be generated. The work on this comes out of a brilliant psychologist, Martin Seligman. He's the father of positive psychology, all the 'looking at what's right' stuff. He did a lot of work on helplessness, learned helplessness, you learn how to be helpless. Now, he's writing a lot about hopefulness. How do you develop a sense of hope? Do you have efficacy? If you work, will you accomplish it? Do you have optimism about what the future holds? Are you feeling inspired to reach your goals?
I think what we're going to see with the AI is helping employees personalise their pathway to hope, "How do I find hope from my work?" and it may be a very different pathway. It may be working in an office, it may be working out of an office, where you work's not going to matter. What you work on may matter, how you work, and how do you help people find a sense of hope and flourishing, Seligman's words, in the work setting? I'm excited about that. And this is the translation, I love translations. Somebody said, "You don't just have seminaries, you have churches, but you have Sunday school". Here's the Sunday school simple lesson. When an employee leaves an interaction with you as a leader, do they feel better or worse about themselves? What a simple question. That's the hope question. I can do all the statistics, all the analytics, all the behaviours of leadership. When I leave an interaction with you, do I feel better or worse about myself? And that feeling better is hope. Do they make me hopeful? That's the agenda that I'm excited about. We're trying to understand that. What are the skills of hope? And how do you begin to embed that into organisations as well as leaders?
[0:42:13] David Green: I mean, hope is such a powerful word. I mean, I don't know, one of my favourite films of all time is the Shawshank Redemption, I'm not sure if you've seen it.
[0:42:41] David Ulrich: Oh, it's a great movie.
[0:42:23] David Green: Didn't do that well at the cinema when it first came out, but it was almost like it kept growing and kept growing, and it became a word-of-mouth film. And they did some analysis into, I don't know, I can't remember the whole story here, they did some analysis of, what is it about the Shawshank Redemption that made it just continue to grow and grow? And not many people who've watched it, that I've met at least, don't like it. And they said, "Because it's about hope". The whole film, when you actually strip it away, is about hope and it's basically the hope of Andy Dufresne to get out of prison and to be on that beach in Mexico. And it is a powerful film and hope is a powerful feeling.
[0:43:05] David Ulrich: Well, and those who are watching this, I have in my office pictures of people, Martin Luther King, Sheikh Zayed, my wife, my father. Why do I have those pictures? Because they give me hope. These are people who preached hope. I mean, I'll use another religious metaphor, "Some prophets tell people they're on their way to hell if they don't repent. Other prophets tell people what heaven looks like and help them get there". I think hope is the second one. By the way, the first one's fair too, but I'd rather Martin Luther King, Sheikh Zayed, my father taught me hope, that the future, the best is yet ahead. Build for that future and look forward. And I love that. Now, how do you get the skills of that? We could give everybody the movie to watch and they could all talk about what happened in getting out of prison and discovering innocence. But I think feeling inspired and inspiring hope in that future through efficacy, through optimism, through agency, through choice, that begins to be what I hope AI can do for the employee.
[0:44:06] David Green: Well, final question, Dave. And this is really on us, really, to see what we should have asked you. What is the question I should have asked you today, but didn't?
[0:44:18] David Ulrich: Let me tell you what I'm frustrated with, and I'm going to ask you, because why aren't we making more progress? Why aren't we making more progress? 'We' being the HR field. I read your work, I read Nicholas's work, I read volumes. We know what to do and we're still tweaking it. We're getting better to do it, I'm trying to do that, you are, in your work with Jonathan and others. So, why are ideas not having the impact they should? That's the one I'm struggling with a little bit. Do you have any thoughts?
[0:44:46] David Green: I wish I had the answer to that. I think we started off, I think the role of being the Chief People Officer, and then by extension, a senior HR leader, I think it's just getting tougher. I think you've got so much being thrown at you all the time inside the organisation, outside the organisation, particularly perhaps at the moment. And I think it comes down to a word that you mentioned actually, 'prioritisation'. It's hard to prioritise because everything is important. So, what do you decide not to do? I guess that's where your concept around guidance comes in. You need some help to work out what's not quite as important as the other things. And again, something else you mentioned at the start, Dave, things are happening so quickly. They seem to be happening so quickly that it's almost like every day, something new happens and we have to move the ship over here, and then something happens and we have to move it back. So, I do think that people are working, not everyone, but most people are working incredibly hard, incredibly long hours, and it's incredibly complex. Back to your paradox one as well. So, your P's I think are the right P's as well.
[0:46:00] David Ulrich: I just struggle, because I've been in the field for a while and I think, another P, we're making progress. I think if you look at a conference in 2015 and a conference today, I think we get better topics, I think we're seeing more, but I just wish we could move faster. I sometimes wonder -- and I love your stuff, prioritisation, we're overwhelmed. I might add to that. I see sometimes HR people being afraid. They're afraid to act, they're afraid to act with courage. One of the most talented senior HR leaders I've ever worked with, I asked her recently as part of the group you're a part of, what do we need to do to make HR progress? Her word was 'courage'. We need to imbue ourselves in HR with courage. That means replace fear with confidence. Step up to it, even if you don't have an answer, move forward. And anyway, I'm in the middle of thinking about that, "How do we help create HR professionals who will drive this forward?" And then you say, "So, why?" And this is why I continue to have passion about HR.
I did a talk recently, about 100 senior HR leaders that was through webinar. At the end of the talk, the host came on and said, "Do you realise that these 100 senior HR leaders represent 900,000 employees?" And sometimes people say, "Why do you stay active in HR when you're getting older?" obviously, "Why do you keep doing this?" Where else in the world could the ideas that we share affect 900,000 employees? I mean, this is the emotional hope that I come with, that the best is yet ahead, that what you do in your incredibly good monthly reviews, your podcast, your books, your articles, if we can move the needle even a little bit, the leverage is incredible. That was one group in a state, in Texas, in the US, across the world. If your work can help the HR people shape the employee experience, hope, personalisation, whatever you want to call it, just a little, I think we've made a difference.
So, that's what I'm trying to do, and I think you join me on that journey. I mean, I think that's a journey we care about. This isn't just, put in my time, how many hours till I retire? No, this is mission-driven in a very powerful way.
[0:48:15] David Green: If anyone on this podcast, listening to this podcast, isn't already following you on social media, how can they get in touch with you? And maybe tell them a little bit about your LinkedIn newsletter as well, and maybe how they can find out more about the work you're doing at the RBL Group.
[0:48:28] David Ulrich: When COVID hit, I'd been traveling 150 flights a year, well, 200 flights a year, every four or five flights a week. Not travelling, what am I going to do? And it hit me, I've got to learn to use social media. And that wasn't my preference. I mean, people used to tell me, "You have a face for radio". So, I started social media. I am finding LinkedIn a delightful platform. There are others. So, I started posting every Tuesday. That's not easy. You would appreciate that. You've got to write a 1,200 word essay every Tuesday that has something useful to say. I don't know how you review all of that stuff. And I started posting. And then, I found the comments are fantastic. Now, there's always a few outliers. I shouldn't confess this, there are a couple of people I've just deleted. They want to make political debates. If you want to debate politically, I'll do that, but not here. I really love the comments. I love the comments. This isn't about likes, it's about learning, it's about comments. And so, somebody said, "Do you really make all those comments?" The answer is, "Yes, look at the typos".
I spend probably an hour or two a day. LinkedIn is my forum for learning. And why I love it is I almost never look at who the responder is. I love that part of AI. This could be a 25-year-old student in Sri Lanka, this could be a CHRO in Germany. I care less about the title and more about the quality of thinking. And I'm amazed, David, as you've learned through your work, there are some great thinkers in this field around the world. And LinkedIn is my platform, so I hope you'll follow me. I can't believe the impact it's having. And I just think it's fascinating to see that platform.
[0:50:11] David Green: Dave, thank you so much for being a guest again on the show, and also for the kind words that you've expressed about the work that we're doing at Insight222 and about the work I'm doing as well. It's very kind of you, so thank you.
[0:50:23] David Ulrich: Thank you. What a marvellous thing. The best is yet ahead and we're on a shared journey. Thank you so much, David.