Episode 242: How to Build the Next Generation of HR Leaders (with Dick Beatty, Patrick Wright & Dave Ulrich)
HR is standing at a defining inflexion point. AI is transforming how work gets done, stakeholder capitalism is reshaping expectations, and the pressure to deliver tangible business value with less has never been higher.
So what does HR need to do now - not just to stay relevant, but to lead?
In this episode of the Digital HR Leaders podcast, host David Green sits down with three of the profession’s most respected thinkers to discuss this very topic: Dave Ulrich, Co-Founder of the RBL Group; Dick Beatty, Professor at Rutgers and the University of Michigan; and Patrick Wright, Chair in Strategic HR at the University of South Carolina.
In their conversation, you’ll learn:
Why HR is at a historic inflexion point, and what makes this moment different
How AI is forcing a rethink of jobs, value creation, and organisational design
What it really means to move from HR activity to business impact
How HR can better serve external stakeholders like customers, investors, and communities
Why CHROs must lead from the outside in - or risk being left behind
How a new leadership development initiative, the Global HR Leadership Experience, is preparing future-ready HR leaders
If you’re rethinking the role of HR in your organisation, navigating transformation, or preparing your team for what’s next, this is a must-listen conversation packed with wisdom, challenge, and practical insight.
This episode is sponsored by HiBob.
HiBob is the all-in-one HCM platform built for HR leaders who need connected data, flexible workflows, and a user experience people actually want to use.
Learn more by visiting hibob.com/davidgreen2025.
[0:00:11] David Green: Every so often, a conversation comes along that feels like a moment in time. Today is one of those moments, as I'm joined by three of the most influential voices in the field of HR, Dave Ulrich, Dick Beatty, and Patrick Wright. You'll know Dave Ulrich as the co-founder of the RBL Group, and the person many call the Father of Modern HR. Alongside him is Dick Beatty, a respected voice in leadership and workforce strategy with academic roots at both Rutgers and Michigan. And completing the trio is Patrick Wright, the Thomas C Vanderveer Bicentennial Chair at the University of South Carolina, and a leading advocate for research-driven HR that delivers value beyond the function itself.
Together, they've helped shape the profession's intellectual foundation, redefining what HR is, what it does, and why it matters. Their thinking has guided CHROs, inspired transformation across industries, and shifted the very language we use to talk about people, performance, and value. They are here today because they believe that right now, in this era of stakeholder capitalism, AI disruption, and relentless uncertainty, HR faces one of the most defining inflection points in its history. I won't give too much away, but this is a conversation that could change the way you think about the future of HR. So, let's get that conversation started.
Pat, Dick, Dave, it's a real pleasure to have you on the show, especially all three of you together. I'm going to start, Dave, you've been on the show a number of times, so hopefully our audience knows you well, but Pat and Dick, I'd like to come to you first and just say, please give an introduction to yourselves and your backgrounds for our listeners. Pat, I'll come to you first.
[0:02:05] Patrick Wright: All right. Well, first, David, thanks for having us on the show today. We appreciate it. Second, a little bit about me. I'm currently the Associate Dean for Corporate Relations in the Darla Moore School of Business at the University of South Carolina. Been here for about 13 years. While I was here, I founded the Centre for Executive Succession that focuses on C-suite succession. Prior to that, I spent 16 years on the faculty at Cornell in the Industrial and Labor Relations School. And, yeah, been kind of the typical academic researcher, but also an academic researcher who has an interest in practice as well.
[0:02:40] David Green: Perfect. Thanks, Pat. Great to have you on the show. Dick, I'll come to you.
[0:02:44] Dick Beatty: Well, I started teaching at the University of Colorado for a number of years, then I was asked to come do some executive ed stuff at the University of Michigan, where I ran into Dave, which changed my career in various ways, all positive. And then I went to Rutgers School of Management and Labor Relations to run a global programme that began in Brazil, went to China, went to India, and back to US over a 12-month period of time, an executive master's programme that I did with a guy named Charlie Tharp that some of you guys know, and spent a lot of time still with Dave at Michigan running the Advanced Executive HR programme.
[0:03:27] David Green: Thanks, Dick, great. Welcome to the show. And, Dave, I'll come to you. The three of you, I know, have been working together a number of times over the years, but what brought you together and what's your current exciting project that you're working on?
[0:03:41] Dave Ulrich: Well, it's interesting to give a personal story, and some of you may know some of this. When I went to Michigan a long time ago, I got put in charge of an executive programme as a very junior faculty, and I made some of the stupidest decisions ever made. I fired all of the senior faculty, except Dick Beatty. And by the way, that's a way not to get tenure at a university. So, for over 40 years, Dick and I have been in Michigan collaborating. And then our son, with some lunatic idea, decided to get a PhD in this field. And he said, "Dad, where should I study?" And the answer was, "Wherever Pat Wright is". Pat is the best scholar in the field, he has been for decades. And so our son, Mike, went to Pat, and Pat was gracious enough to teach him. And after Mike finished his PhD, he said, "Dad, you're right. So, it was better to work with Pat than you". And so, the three of us have collaborated on a number of things.
We're committed to the future. We're committed to the HR profession. We're committed to helping people and organisations be successful. That is a shared commitment that with you, David, and others that you talk to all the time, we share that in a very real way.
[0:04:51] David Green: Yeah, and certainly, on behalf of our listeners, we're grateful for everything the three of you have contributed to the field over the years, and you've really helped shape some of the pivotal shifts in HR and hopefully the stakeholders that HR serves as well. But in your recent joint article, Dave, What's Next for HR and How to Respond, you pointed to this particular time in history as being a real inflection point for the HR profession. So, from your perspective, what feels different about now, what's shifting, and why does it matter so much for the future of HR?
[0:05:28] Dave Ulrich: You know, when we when we think about inflection point, it comes from some great work at Intel by the Intel leaders a long time ago, Bob Noyce and others. Inflection point is when the outside world is changing, you've got to either respond or die. And the changes in our world, everybody knows them, AI driving and fuelling many of those changes, information is everywhere. On this podcast, if we don't say AI 20 times, we ought to be thrown out. Good news and bad news. We see political toxicity, we see wars and rumours of wars, we see economic uncertainty. We see so many changes, post-COVID especially, that HR is at the centre stage. It's material. Governments are saying, "You must report your human capital. It's part of regulation". Business leaders are saying, "People, AI, technology, that's the key to our success", boards are looking at it. Frankly, Human Resources are at the business table. That's an old issue that's irrelevant. The question is, can HR people join them? Because the human resource issues are central to what a business does. We see it, we live it. And so, we call that an inflection point.
Pat's done some amazing research about CHROs. And one of the scary things is if they don't rise to this opportunity, they're going to get moved. And to be really honest, and this is a scary thing I just saw this week, there's a lot of turnover among CHROs right now, especially in North America. Pat's seen it, we've seen it. I think the demand and expectations for next generation HR, not just CHROs, we think it's higher than it's ever been. It's time to build a whole pool of HR professionals who can respond to those opportunities.
[0:07:12] David Green: And, Pat, either of you might want to talk to this, and Pat particularly, Dave talked about the research you've done around CHROs, is it harder to be a CHRO now than it's ever been? And maybe, what are some of the findings that you have, Pat, from the research?
[0:07:28] Patrick Wright: Well, yeah, without a doubt, it's harder today than it's ever been before, and particularly the visibility of the board. So, if you go back 25, 30 years, nobody on the board cared about the CHRO for the most part. And then we have the scandals and the executive pay scandals that came out of the dot-com bust. Suddenly, the board was looking at, "Well, who's in charge of pay?" and that's HR. So, now the board is looking to the CHRO. Then you have the HP series of CEOs and the pointing to them not doing succession well. And so, all of a sudden, boards became focused on CEO succession. It's like, "Well, who does selection?" Well, that's HR. Then you get into the Wells Fargo and Uber scandals, and it's a cultural issue where it looks at, "Who's knowledgeable about culture?" and that's HR. Then we had COVID, and that was really the question of where work gets done. And then, as Dave mentioned, now you've got AI, and that is, what work gets done by people. And these are all the concerns that the board is trying to deal with in terms of how they govern the corporation. And all of it points to the CHRO, the role that the CHRO and HR plays in the organisation.
So, that's why I think it's a broader role than it's ever been, it's a higher visibility role than it's ever been, and it has the potential to have greater impact, either positive or negative, than it's ever done.
[0:08:51] David Green: Yeah, and certainly that's something that we see with the CHROs that we work with at Insight222. And obviously, there are some extraordinary CHROs out there. I'm sure the four of us could all create a list, but we're not going to do that in the episode now. And there's definitely more interest from CHROs, but also outside pressure coming in on transforming the way that the HR function operates. But there's still a tendency, I feel, not in every organisation, but in many organisations, that HR still focuses too much inwardly on what HR is doing rather than on the outcomes that they delivered. Dave, you've talked to this a number of times on the podcast about that. I don't know, Dick, maybe come to you on this one. Why do you think it's so hard for HR to move from activity to impact?
[0:09:45] Dick Beatty: Well, I think it's very hard. I mean, when I think of HR, I think of old SHRM and ASPA, the American Society for Personnel Administration, and we were defined as administrators. I think still we look at it that way. And I think now, the whole issue is about the workforce. Organisations are sort of forced to change more than ever in my lifetime. I talk about the external ecosystem in terms of what's changing in that ecosystem for all firms. And if you look at the elephant graveyard of firms, whether it's Fortune 500 or any index of market value, or whatever, sustainability is really challenged. And organisations don't change themselves, people change organisations. So, what work do we need? And I look at work in terms of three kinds: strategic, support, and surplus. And knowing the difference about that and aligning strategic work and investing in that is what's going to enable the survival of organisations.
Support work may outsource much of that, AI will enable you to do much more of that. And surplus, just like what we're doing with our federal government, trying to get rid of a lot of surplus work, things that we no longer need to do that cost us more. Plus, I think we're going to have to communicate that if people don't grow, they're going to have to go. And increases are going to be dictated by what people contribute, more so every year than getting an annual increase, just because they're still sitting in the same role. So, all those changes have profound impacts upon the human resource function and who leads that function.
[0:11:26] David Green: And maybe, Dave, coming to you now again, is there anything you'd add to that? Obviously, you're working with organisations and senior HR leaders every day pretty much. What are some of the things that you see that prevents them from just doing stuff to actually having an impact?
[0:11:45] Dave Ulrich: I'll tell two quick stories that capture this. And like you, David, and Pat and Dick, we all do talks, and in one of the talks I was scared to death. I'm not sure, David, you've ever been scared, but I was intimidated. It was one of the large technology companies, 100 people, 70 PhDs in physics and science and maths, and I thought, "What am I going to say?" And so, I started by saying, "What do these companies have in common?" And I started listing some, digital old computer company, Compaq, Eastman Kodak, Toys"R"Us. And one of them yelled out, "They all went broke". And I yelled back, "I consulted for every one of them". And there was just a half a moment of silence. And they said, "So, what's the point?" And I said, "I worked with digital from 120,000 people to 20 before they sold, and then Compaq and then Kodak. Every one of those companies were phenomenal, People Express Airlines, they were the case studies.
But they were internally focused, they all missed the marketplace, they didn't understand what was going on outside. And that's the challenge. It's not what we do inside, it's how what we do inside creates value outside. HR is not about HR. It's about creating value for stakeholders in that ecosystem Dick talked about. Our customer, our investor, if they don't get value from what we do, we're not going to be doing it very long. Without success in the marketplace, there is no workplace.
The second story, and people go, "Yeah, that's obvious", I love in a workshop to say, "Very quickly, write down the biggest challenge in your job. And you can't name a person". I mean, because that's always worrisome. Don't point at the biggest challenge; write down. And here's what they say, it's some of what Pat talked about, "We have a challenge of succession. Who's going to lead? We have a challenge of compensation. How do we pay? We have a challenge of development. We have a challenge of workforce engagement". And my comment is, "That's not the biggest challenge in your job. The biggest challenge in your job is to create an organisation that succeeds in the marketplace". And so, behind every one of those items, succession, compensation, employee engagement, so that a customer buys our product, an investor invests in our product, a community has a better reputation. And again, that's a pitch that I think we've been on. And that's an evolution.
I was reading something even today. They're saying, "Oh, HR is so good, it's going to reduce turnover. It's going to get higher employee engagement". And I'm going, "True, true, incomplete". Because turnover, retention, employee engagement should lead to value in the outside marketplace. That's the metaphor for us that I think is an inflection point. HR is not about HR. Well, that's not true. HR is less about HR. We still care about HR, but it's more about success in a changing marketplace.
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And actually, Dave, that 'so that', that you mentioned then, you kindly spoke to our Insight222 group of people analytics leaders in Colorado, I think it was a couple of years ago now, beautiful summer's day, beautiful location. And I think you were doing a workshop with them, and I think a number of them thought differently when you said, "Add the 'so that' to it", because as you said, they're all extremely smart people, all delivering value within their organisations. But it's just about connecting some of the activities they're doing to an outcome, isn't it, 'so that'; so that we drive, so that we increase sales, so that we execute on our strategy and deliver more value for our shareholders, etc. It's just that one extra step to take, isn't it?
[0:16:32] Dave Ulrich: It is, and I'll say one more thing, and then turn this to Pat and Dick, my mentors. We've said HR should drive business results. And so, we've done a lot of work, and all of us on the call have done work around business results, as have other colleagues, and I hate to start mentioning them. Well, here's an insight. Financial results are a lag indicator. I can't report my profits for next year. I'm reporting my profits for last month, last quarter, last year. So, in HR, our assumption has been, let's do HR work that drives last year's results. Well, that doesn't make any sense because the world's changing, and what it's going to take to get next year's results are different. HR is not about last year's results, it's about next year's results. And the only place you're going to get next year's results is a customer who's going to buy a product, an investor who's going to pay money, invest in my product, a community who's going to have a better reputation.
So, our take on HR, "Outside in", Dick and I did a piece on this, is changing the metaphor of HR. We believe in business results next year, which is customer, investor, and that will be the lead indicator or the lead driver of business results. That for us is an example of an inflection point. A quick story, and then I promise I will shut up. I said to a head of HR in a Fortune 50, "What do you say to your investors?" And her comment was, "What are you talking about? I don't meet with the investors, that's investment relations". Holy smokes. I felt like, sell short. By the way, it's a great company, sell short. Because if you're not meeting with investors, giving them confidence at your succession that Pat talks about, your executive comp that Pat and Dick talk about, your training, your employee engagement, if it's not giving investors more confidence in your intangible future, then you're not doing your job. Anyway, that's that for us. And I hope you feel from the three of us, David, and those listening, an excitement. And to be really fair, people say, "Okay, smart guy, how do you do that?" We don't know.
[0:18:33] David Green: That was going to be my next question, actually.
[0:18:34] Dave Ulrich: Well, that's when Pat and Dick are going to speak up! By the way, if we knew how to do it, that wouldn't be very helpful. I mean, I sent an article off to a leading journal once and they said, "Give us five companies who've done this". And I said, "When I have old news, I'll send it to you". We want to go create what's next. That's what inflection points do.
[0:18:52] David Green: And Dick maybe, Dave mentioned that you co-authored something on this about forward looking. Without giving the exact way on how to do it, what are some of maybe the different mindsets maybe that the HR leaders, HR professionals need to have?
[0:19:07] Dick Beatty: Well, I think we have to change the mindset, we have to bring the outside in. I mean, David mentioned some of the things, even bringing in the lead investor for a particular industry or your industry, and to talk to HR about it so they have an idea and an early window to where we're going with this. David and I wrote an article a long time ago, and I doubt if Dave even remembers this, really talking about sort of the history of HR. And I'm old enough to remember when HR were nice people. They were polite and they were so nice, we put them in HR. And then we got the police, so we were the enforcement people. We had all these laws and regs and everything else. And then, David wrote this brilliant article about being a partner. Well, we want HR to be a player on the field and with the ability to score on the only scorecard that really matters, and that's the scorecard of the business: customers, consumers, investors and so forth. And that's not the focus. Part of the focus is, how do we create cultures where organisations and the workforce really understands why we're here, where we're going, how we're doing, what markets are we in, how are we doing in those markets, what's really happening, what's really changing? And the best organisations are able to do that and onboard their workforce with the challenges of the marketplace.
But not many organisations do that well. That's why this sustainability issue is a huge kind of issue for firms.
[0:20:31] David Green: Again, Pat, maybe I'll come to you on this one. Just listening to Dave and Dick there, and Dave talked earlier on about AI obviously being a huge disruptor and potentially an opportunity for HR to lead on, is one of the ways that HR can really support the organisation and deliver value for its stakeholders to take the lead on the organisational transformation that will probably be relevant for pretty much every organisation because of AI? So, not just focus on making HR programmes better, but actually focus on how we're going to transform the organisation, who's going to do the work, whether that's humans or technology, and also maybe how work's going to be different as well? I mean, are these some of the things that you're seeing from some of the companies that you're working with?
[0:21:22] Patrick Wright: Oh, yeah, absolutely. I mean, certainly AI is the biggest kind of known unknown right now. And that is that we know it's coming, we know what people say it can do, we have no idea, or at least we're not admitting, what it's going to do to our workforces. But I'll go back to thinking, you know, this whole AI emphasis has got to be around, what's the value that it's creating for the customer? So, it could be creating value for the customer in that costs can be lower; it could be value for the customer because our products are more uniquely made for that particular customer; it could be that AI allows us to innovate and come out with new products that now make our customers willing to buy more from us as a result of that. But I think that's where starting with the customer is where I think there's a unique need in HR right now. And Dave and I were at a meeting of a number of CHROs a few weeks ago. And over the course of two days, I don't think we heard the word 'customer' more than a couple of times. And the emphasis is on, "What's going on in our workforce, and what is that doing for our shareholder?" But our shareholder only cares about financials that come from, as Dave said, the customer. We're delivering value to the customer.
So, that's where I think everything we do in HR has to be focused on not just what's it doing to our employees, or yes, we're expanding our lens over the last 15 or 20 years to say, and we also have to drive the financials. But if we don't understand how what we're doing in HR is driving the financials through creating value for customers, then we're going to miss the boat, we're going to miss everything that's going on in the external environment, and we're going to miss everything that we need to do internally to transform the organisation to create that value for our customers.
[0:23:12] David Green: And actually, on stakeholders, I think, because I know that you've all done a lot of work around this, traditionally HR's view its stakeholders as employees and the leaders of the organisation, and to a greater or lesser degree, most HR functions serve those two stakeholders well. Looking at a lot of the work that the three of you have done, you identify three other stakeholders and correct me if it's more than three, please tell me. One is obviously investors; two is customers, which is I think, listening to you, the most important stakeholder; and then the third one is communities. So, If we look at those, if we assume that most HR functions are serving their leaders and their employees well, although you would argue if they're not serving their customers well, maybe they're not, if you think of those other three stakeholders, how can HR be better at serving those three stakeholder groups? And maybe, where have you seen examples of organisations that are doing one or more of those three groups well?
[0:24:20] Patrick Wright: Well, let me address part of that, and that is that, again, we keep coming back to the AI transformation, and it'd be ignorant to say that this is not going to impact our workforce. I mean, we know that what AI is going to do is going to replace what a lot of people are doing. And so, if that happens, are we doing something to help those employees transform their skills so that they're still employable within the organisation? Because if we don't, we're going to be like when we outsourced all of our manufacturing overseas, and we'll have these dying cities where people have been laid off and there's nothing for them to do anymore. And I think AI has that same potential. And so, we need to be thinking about if we want to serve our communities, then that means we have to think about how AI is going to allow us to better serve our customers and our investors, but the transformational effect it's going to have on our workforce, and how do we help them transform themselves to be employable in the future? And it's not just worrying about employees, it's not just worrying about customers, just worrying about investors. It's understanding that the things that we're doing, particularly in HR, are going to have an impact on all four of those. And so, we've got to be able to play almost a balancing act of understanding the impact of all of these decisions on each one of those stakeholder groups. And yeah, short term, it may have a negative impact on somebody, but are there things we can do today to minimise that negative impact tomorrow?
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Dave, I know we've spoken before about the customer. What advice would you give to HR leaders, aspiring HR leaders listening about how to interact better with customers?
[0:27:23] Dave Ulrich: It's so amazing, it's so simple. Invite them in. We're going to do a compensation system, setting standards, allocating money. Invite in some customers as a focus group. Are our standards the things that will cause you to buy our product? We did that in an HR group once, and they had a day on compensation and standards and what's expected, behaviours, outcomes, long-term, short-term, individual, collective, all the standard-setting stuff. And then, we went to three or four customers and said, "Wow, look at what we've set. Would that cause you to buy our product?" And they said, "No". Well, then why are you doing it? If our standards don't cause you to buy our product, what are you doing? And you could do the same thing with training, you could do the same thing with leadership. Every company I know has a competence model.
One of the coolest things we did in Michigan, and Dick remembers this, we had companies send in their competence model for leadership. We put them on the wall without a name. And we said, "Can you name that company?" Nobody could, but they could name the consulting firm that created it because one had a circle and one had these. And well, that's stupid. Our leadership competency should be the things that customers buy. Our culture should not be our internal values, it should be how they create value for a customer. And so, it's really simple. If you're in HR, are you spending time with customers?
Very quick example. I love this case study. Go out with your best salesperson and say, "I want to visit a customer". And they'll say, "Why?" And say, "Trust me, I'm from HR". By the way, don't say that! But go out with your salesperson, and they sell a product. The customer looks at you, the HR person, and says, "Why are you here?" And here's what you say, "Our salesperson just sold you a product or a service. I in HR have information and access and I know how to hire people, train people, pay people, develop people, communicate, build engagement. I'm going to go look at every one of those processes against what you just did to buy a product. I'm going to take your buying criteria and weave them into everything we do. And here's why. Today, you buy 40% of product from us and 60% from someone else. In a year, we want it to be 60-40 us, and in two years, we want it to be 80-20 us, and the salesperson gets all the commission. They sold you a product, we're selling you a relationship. Join us".
By the way, if you're in HR, go try it. We almost guarantee you'll mess up the first time. That's good. Do it again, and do it again, because that's a mindset that, "I'm not here to do staffing, training, development. I'm here to do it so that a customer has a better experience". That's the mindset, that's the inflection point. If we could build that in the next generation of HR people, wouldn't that be cool? That's what we're trying to do.
[0:30:25] David Green: It's interesting. At one of our recent Insight222 customer meetings, we get a group of customers together and they'll talk about some of their work. The one company there, it's a retail company, and their people analytics team have been trying to understand what are the people factors that drive retail sales performance. They quickly understood that what drove in Asia Pacific was going to be different, what drove it in Europe, what drove it in the US. And again, it would be broken down further than that. So, what they did is one of the people from the people analytics team that was leading that particular piece of work went to all those regions, worked with the employees in each of those retail businesses, and actually went to the stores and observed. And they were able to obviously create, understand what was driving retail performance, generally speaking, across each of those three regions and come up with something with a little bit different for each of those three regions as well, which then the businesses in those regions were able to implement and actually use those insights to try and drive up retail sales.
I guess that's what it takes. It's thinking a little bit outside the box and not just trying to do it from your office in the head office, in whatever part of the world that's in. As you said, David, it's getting out there, it's meeting customers, and it's learning.
[0:31:47] Dave Ulrich: And you said retail, and Pat and I, Pat could tell the story, I'll tell it quickly. Large retail chain, Head of HR, she does her research with analytics. And David, your analytics work is so powerful. She finds out in stores with higher employee engagement, it's $48 a basket. In stores with average engagement, it's $40. So, she goes to the executive and said, "We're a $100 billion firm, and there's a 20% increase in basket size in stores with better engagement. That's $20 billion I want to give you". People were saying, "Would you create a leadership training programme?" And everybody said, "Oh, you've got to ask for $500,000 or euros or pounds". She said, "No. I'm trying to make $20 billion in revenue". And they said, "That's too much". She said, "Good, cut it in half". And they said, "What do you want?" She said, "I want $1 billion". And she got it, because she showed with analytics, "I can increase the basket size with an employee engagement agenda". Now, what's fascinating and what we need to do is say, "So, where do you spend the $1 billion?" Pat and I saw this colleague, and I think she'd be embarrassed if we mentioned her name, we saw her in November and said, "How did it go?" And she said, "It's great. This year, I got $2 billion".
By the way, that is the mindset. Can you imagine, David, if we could instil that within every analytics person, "You're not here to measure HR, you're here to measure revenue and market value and tangible value"? That just is so exciting as a way that just transforms the field of HR. We're not about HR. We're about results and an inflection point. Okay, I said too much. Pat, that's a story that you know well.
[0:33:32] Patrick Wright: Yeah, well, let me build on that as well, because in one of the executive programmes that I lead, I take them through business models and really understanding the basic financials, and in particularly looking at revenue and variable costs, fixed costs. And with regard to revenue, I'll go through, "What drives revenue?" right? This is ultimately your customer's willingness to pay. And so, why do companies want to innovate? Why does Apple come out with a new iPhone every year? Well, it's not because somebody needs it. It's because, well, we're going to offer new types of capabilities with that phone that makes you want to buy another one and lose money on your previous one, right? So, it's about that customer's willingness to pay that'll drive revenue. And so, at the end of the day, I'll say, "Okay, let's sit down as HR folks. What do we do that actually drives revenue?" And it's blank looks. I mean, they've never thought of it that way of, "Well, is it innovation that makes that customer willing to pay more? Is it the quality that makes that customer willing to pay more? Is it the brand that we've created that makes that customer willing to pay more?" But they're not thinking in those terms.
Dave is exactly right. We should be thinking, the metrics for us in HR should be the same metrics as in the business. What are our revenues? Are they increasing or are they decreasing? What's our customer share? What does our profitability look like in terms of fixed costs and variable costs? Those should be our metrics that we're focused on primarily, and the HR metrics only so much as we can see that those actually drive those financial metrics.
[0:35:05] David Green: And, Dick, turning to you, because I know this is a particular area of expertise for you, maybe building a little bit on what Pat just said then, when we think about metrics and we think about the metrics that we typically measure in HR, what are the new metrics that we really need to be thinking about in HR if we're going to get really serious about delivering stakeholder value?
[0:35:28] Dick Beatty: Well, I don't know if they're entirely new, but my biggest enemy in metrics is means. So, David knows, I feel like the mean is a mean thing, because we use averages for all this stuff, and I don't think averages tell us very much. Like, even engagement, we move the average. I want to know who's engaged, and our best performers engage and our worst performers disengage and anonymise the data and you can cut the data that way. You could also take the same set of concepts to customers, because a customer is not a customer is not a customer. So, I ask firms to divide customers into three groups. Who are your stretch customers? Who's going to be in business in the future? What kind of information do they have? Where are they going? Where are they investing? Who are their new customers and consumers? Because I believe you get more information from consumers than you necessarily might get from customers. Who are our steady-eddy customers, those that we know we're going to be in business with, we want to invest with, and who are our problem customers? And if they're problem customers, you're probably better off getting rid of them rather than carrying them on just because they may contribute something to your revenues, but not much. And helping your workforce even to understand some of those things, to me is a pretty important kind of thing as you begin to think about bringing the transition.
I think in metrics, we focus way too much on the 'how' things to measure how we do things rather than what we deliver. And I believe anytime we start any kind of metrics things, what are the destination metrics? What are we going to measure? What difference is it going to make? And how do we back away from that and talk about how we're going to get there? This thing, in fact, does make a difference in terms of what we're trying to do. And if we do that right, then we can do things like build strategic talent inventories and other kinds of stuff that really helps us make better decisions, because we have better data that really is more indicative and more predictive about what we're trying to achieve as an organisation, both on the 'how' side and the 'what' side.
[0:37:27] Dave Ulrich: Can I give an example of that, David?
[0:37:28] David Green: Yeah, please do.
[0:37:29] Dave Ulrich: I gave an example of this retail company. She got a lot of money, whatever the number was. So, then the question is, where do you invest? And for those of your colleagues, David, and you're the thought leader with your colleague, Jonathan, and others at Insight222 on analytics, that's an analytics question. Look at all the HR initiatives we could invest in, compensation, communication, diversity, training, staffing. There are dozens. Culture change, innovation. Analytics colleagues, how do you decide? Given that we've got commitment to invest that will build value and revenue in the marketplace, where do we invest? And that's where I think the analytics of the future will be so helpful. Can you give me guidance? And it's going to probably not be flawless, but it's going to be some form of regression, some form of variance decomposition -- I learned that word recently -- that you want to say, "What will cause more revenue? Is it A, B, or C?"
For example, in that retail example, she decided to invest disproportionately in first-line supervisor training because she said, "Employee engagement will drive customer basket size and first-line supervisor, not the store manager, not the executives, that's where the employee engagement comes". So, that's where our analytic folks need to begin to see some cause and effect. And AI becomes an enabler for that. AI allows us to look at that longitudinal data in a great way.
[0:38:54] David Green: And actually, building on the AI point as well, we've talked about AI a reasonable amount through the conversation so far. Hey, it's 2025, we're going to be talking about AI! What roles do you see AI playing in helping HR deliver greater value? And where do you think it potentially hinders HR's progress? I'll throw that out and let one of you answer that.
[0:39:18] Patrick Wright: Sounds like a Dave question to me.
[0:39:20] Dick Beatty: It does to me, too.
[0:39:22] Dave Ulrich: Yeah, I love it when my friends are stumped.
[0:39:28] Dick Beatty: I think we all have an answer, but I want to hear Dave's answer.
[0:39:31] Dave Ulrich: I think AI gets complicated, and I think among the four of us, David, I'm going to include you, we like simplicity. AI is simple. It's about information that improves decision-making. That's what AI does, it improves decision-making. And so, how do we get better information? We do it through gen AI, we source information better. We do it through agentic AI, we get algorithms that predict stuff. And so, information is better. Our daughter, the one Pat did not train, was a professor, and she said, "Students no longer do papers, they do AI papers". So, she's a professor, and all you get is AI papers. So, she said, "That's an easy solution. Turn in two papers. Turn in your AI paper and now write your paper. And if your paper doesn't build on the information that's available, you're going to fail my course". I think that's what we've got to do in HR. AI can make you lazy. I post on LinkedIn quite a bit. People have said, "Do you use AI?" And I say, "No, because I'm scared to death. If I start using AI, I'll quit thinking". That's a real fear.
I believe the future of AI is AI times AI. AI, artificial intelligence, times authentic intimacy. The authentic intimacy is where you've got to have personal relationships, personal intimacy for the future. If you have AI information without the authentic intimacy, you're not going to get the future, you're going to recreate the past. And I'm really scared. One final story from me. A company said, "What are the skills of a plant manager in manufacturing around the world?" They had 40 plants. They did AI. They got their 10 skills. "We're going to go higher pay and train against it", and I said, "Don't you dare, because every competitor has done the same thing". AI sets a common benchmark. If we can't now have authentic intimacy and insight beyond what's common, you're going to just be me too, and you'll be out of business. AI is a table stake. It's not a differentiator.
[0:41:32] David Green: Yeah, it's interesting because as I'm in conversation this morning with a Chief People Officer on another episode that's going to be on the podcast, and we were talking about how AI guides but humans decide --
[0:41:46] Dave Ulrich: Nice line.
[0:41:47] David Green: -- which we were both quite proud of that one, I think, when we came out with that! But it's interesting, isn't it? Because I was talking to a Head of People Analytics the other day, and they were writing a paper that is going to be published, and they really knew the case. So, they could have gone and written it themselves, but it would have taken several hours to do it. But because they really knew the case, they were working with Copilots and AI to help shape the story. And because they were able to ask the right questions, give the right prompts, ask for the tweaking, what they told me they ended up with after a couple of hours was a fantastic piece of work, and much better than this person said that she would have been able to do if she'd done it herself. But I think that's what you said then, that's that AI plus AI rather than just AI. And maybe, again, who knows, it's just my idea really, or my synopsis, is that if we learn to work with AI, it's going to make someone who knows what they're doing even more successful, even more impactful perhaps. But if you just rely on AI, as you said, Dave, the danger is that you get lazy.
[0:43:11] Dave Ulrich: MIT just did a study that came out, I read it this weekend, of cognitive ability of those who use AI, and it dropped significantly. That, by the way, scares the heck out of me. Pat, you may have seen some of that. It scares me to death.
[0:43:26] Patrick Wright: Yeah. And I would add that in thinking about it, to Dave's point, is that to leverage AI effectively, you have to first understand what are the questions that you want to ask, because whatever prompts you put in, it's going to give you an output. And so, you have to be skilled at understanding how that output could be wrong, given the way you've set up the question. So, there's a skill in that. And then on the backside, as Dave's saying, this kind of intimacy, you have to look at the answer and does it pass the smell test? Do you know the field and the content well enough to look at something that's an output of an AI and say, "That's just not right?" So, I had a colleague who was playing with his data set. And he said he kept putting it in, and it was given the wrong answers; the AI programme he was using was given the wrong answers. And he kept playing with it and playing with it and finally realised that instead of reading the data as columns, it was reading the data as rows. Now, the only way he caught it was because he knew what the answer was, and was seeing that the AI was giving him the wrong answer.
So, you have to be smart enough to know, "This is just not right. Whatever AI is telling me right now is just not right. It doesn't fit with my experience, it doesn't fit with what I know. And so, let me go back and figure out what's wrong with what it's giving me. And then, when I get it right, or when the AI gets it right, I'll have a better answer and better able to extrapolate what are some of the implications of that". So, again, it's skilled on the front end of knowing how to ask a question, then skilled on the back end of knowing how to interpret the output.
[0:45:05] David Green: Which leads us now, so let's bring this all together now. You've recently, the three of you and some other colleagues, have launched the Global HR Leadership Experience. Can you share more about that for our listeners, about the Global HR Leadership Experience, what it entails, what's the core philosophy behind its design? And specifically --
[0:45:23] Dave Ulrich: Let me start.
[0:45:24] David Green: Okay.
[0:45:24] Dave Ulrich: Imagine everything we've just done for 45 minutes. And if you're listening to this going, "Wow, 60% of that I knew, 20% is stupid, 20%, that's kind of useful, how do you do the 20% percent useful?" Dick and I started and said, "Let's take a clean sheet of paper. Let's not rebuild an existing development experience. We've got to get HR people up to speed. If we had an absolute clean sheet of paper, what would we do?" And Dick and my first thought is, "We don't know. Let's go get smart people to tell us". So, we put together an advisory board of the best and the brightest. And the four of us and ten other people, who are just incredible, from around the world, from India, from China, from Malaysia, every organisation in the world, and we said to them, "Given what we've just said, what should HR people know and do?" And we have spent, the three of us, six months massaging that. And I'll stop with that. We've put together a programme and I'll let Dick and Pat talk about it. I just did some fascinating stuff.
By the way, I don't think we're going to train the current CHROs. There's folks out there who do that, they're really good, they're doing a good job. We'd love to build a trove, and I like that word, a big bench. When there's a CHRO succession, there's four to five people who can do the things we've said. We want to build a broad and deep pool of candidates. So, we put together a programme at South Carolina, Pat can talk about that. I was so excited to see that we've got a programme together. We've got CHROs presenting. The CHROs who present come from 30 different companies. Think about that, 30 of the major companies in the world. We've got the heads of the six major HR associations in the world, each presenting what's facing HR in the future. So, the six major HR associations. And then we've got some bozo faculty, and I only say bozo because that's some of us, but I add it up. The faculty in that programme have written over 100 books. This is not a shabby programme. We've got the six heads of the six largest associations globally, China, India, Malaysia, Europe, North America, we've got CHROs from 30 of the biggest companies in the world, and we've got authors who've done over 100 books.
I think we've got a set of ideas, tools that will change the HR field. That's our pivot. That's exciting to us. We guarantee we won't get it right the first round, and I'm not upset about that, but this is a long-term agenda with Pat and Dick to move that forward. Okay, that's the context and what we've done.
[0:48:08] Patrick Wright: Yeah, let me say what I think, because a lot of times we'll get asked this question about, "How's this programme different?" And I tend to focus on three things that differentiate this programme from most of the other programmes. One is what I'll say is kind of the cast of all-stars, which is what Dave was just talking about. I mean, these are the thought leaders in HR or in their respective fields, like Ram Charan in boards and governance, Rita McGrath in strategy. So, I mean, it's a cast of all-stars. So, you're getting, in one programme, getting to hear from just amazing, amazing folks. Second piece is it's global, global both in content, and as we hope, global in participation. So, again, the presenters are going to be from around the globe, we'll hopefully have participants from around the globe. And the content is going to be fit for not just what's going on in the US, but what's going on around the globe. And then, the third thing is, I would say it's going to be intensive, right? It's going to be eight days on campus, one morning off, Sunday morning off for people that want to worship, but the rest of the time it'll be an intensive experience with their colleagues, with the faculty, as a great opportunity to get away from work and to just totally think about what do they need to do to retool themselves, to make them have a greater impact on all the stakeholders to the organisation.
So, those three things I think are incredible. And the intensive, I mean, that's one of the things where we get a lot of pushback of, you know, "Well, HR people, can they spend eight days on something like this?" How many times do we send senior leaders to an eight-day or two-week programme, and we don't think about that, right, at all? Well, it's because they need that development and they need the intensive two weeks to do that. Why should it be any different for HR leaders? It is one of the things that you have to be willing to invest in your HR team to give them the time away, to have that intensive experience, to grow their skill base.
[0:50:15] David Green: When is this happening? How can people find out more about it? It sounds like this is the first of many programmes. I think it's taking place late October, early November, I think, the eight day in-person. But you're looking at doing this again as well, aren't you?
[0:50:28] Patrick Wright: Yeah, the in-person is going to be 28 October to 4 November. And it'll be on the South Carolina campus in our business school building, and the executive component or facility within there. And again, I talk about the global; South Carolina and the Moore School of Business is known. It's the number one master's programme in international MBA for something like 25 years, the number one undergraduate international business programme for 25 or 30 years. I mean, that's what we do, is international. And so, it'll be those eight days, but with about a month before, we'll have them be doing an organisational kind of diagnostic and a 360. They'll bring that in and get coaching during the programme around their organisation, a project they're going to be working on for the business, and their own kind of 360 assessment. And then, we'll be following up with the coaching for about 60 days after the programme as well. So, again, an intensive leadership experience.
[0:51:32] David Green: Thanks, Pat. And Dick, sorry, I interrupted you. You were going to say something.
[0:51:36] Dick Beatty: No, I think Pat said it. I mean, it isn't just this eight days. They have to do work before they get there, they have to have a project before they get there, and they're going to work on that. So, there is some real deliverable when they return. And we would like to follow up with them after that at the same time. Plus, we're asking them to come in pairs so they're not there alone. So, when they go back, there's at least more than one voice that knows what took place and why we're doing this and why it's important. And they've got somebody else to commiserate with when they run up against some obstacles and some folks that don't think some of these ideas are the greatest thing, because it's going to maybe diminish some of their own activities within the organisation.
So, the programme is really designed to bring about change in organisations and better prepare the HR function to tackle the kind of strategic changes that organisations are faced with. As David talks about the human capability, how do we build that capability to meet the challenges of the future? And how do we invest, where do we invest, where do we disinvest to make that happen? So, how are we going to grow the workforce? How are we going to acquire it? How do we make it do and deliver what is going to enable sustainability? To me, that's the exciting part of this whole deal.
[0:52:53] David Green: Very good. And I think if people want to find out more about it, I mean, I would definitely, if you're listening and think, "I'd really love to do that", or, "I'm a CHRO, I want to send some of my people we've identified as my potential successor to it", first of all, check Dave's Human Capability Impact newsletter on his LinkedIn because there's a number of articles about it. And then, if you go to the moreexeced.com site, I think you can find out about the GHRLE programme there as well. We'll put the links in the show notes.
[0:53:28] David Green: You knew I was going to do this. I can't let a show go by without asking you a question. And you knew I've been struggling with the question. And, David, you have one of the most unique perches in the world because you talk to so many people and you have a gift of curation that your monthly curations are just literally world-class. We used to do books like that. Now you do a book every month of incredible material.
[0:53:51] David Green: You're very kind, Dave.
[0:53:54] Dave Ulrich: I'm not kind, I'm overwhelmed with what you do. And I know incredibly difficult to do it. Zero to ten, how confident are you about HR's capacity to drive results in the future?
[0:54:06] David Green: Probably five or a six still, unfortunately. I'm optimistic, though, I think it could be higher. Okay, well, that's what I'm going to say. Are you optimistic that there are skills that can be acquired and, you know, think, behave and act; are there skills, are there mindsets, think, behaviours and actions that would move that from a five to an eight? We're not going to get to ten, but could we do?
[0:54:29] David Green: Yes, because I see it in in different organisations around the world. And you mentioned some of the CHROs that you've got participating in this programme. There are at least three or four of those CHROs that I know well enough and know the organisations well enough to know that they are at least an eight out of ten. So, yeah, it can be done?
[0:54:50] Dave Ulrich: Pat, who are the CHROs joining us? You have that in your head.
[0:54:54] Patrick Wright: Donna Morris, Nickle LaMoreaux, Walmart, IBM; Christy Pambianchi, Caterpillar; Tim Richmond, just retired at AbbVie.
[0:55:08] Dave Ulrich: I mean, brilliant. And, David, I'm where you are. Why do we continue to push this Sisyphus rock up a hill? Because we think we can get there. And, David, you've been helpful for us with the analytics piece and other pieces. And I'm kind of where you are. I'd probably give it a five, six today, and I think we can get to an eight. By the way, that's exciting if we can make that happen. And when people see this in September, get hold of us. If you can't get in in October, we'll get you next March. We're going to change the HR field.
[0:55:41] David Green: Well, I've got one more question, because you've put a question on me. So, this one's going to be, I don't know, any of you can answer this, or maybe you can all give a line on it. So, this is the question of the series, and I think it's perfect for the conversation that we've just had, actually. What's the single biggest shift in the future of work that you foresee by 2030, and how will HR lead it?
[0:56:03] Patrick Wright: Well, I think I already addressed the AI, and it is going to transform the way work gets done. It will, as much as companies want to say that it's not going to result in layoffs, it will result in jobs going away. And the question is, will organisations have the foresight to reskill people prior to their job going away so that they can maintain employment with the organisation?
[0:56:30] Dick Beatty: I think the big question about work is, why is this job here? What value does it add? What difference does it make? Because we've had all these old job descriptions that we just push them forward, keep people in those positions. I don't think there's going to be room or we're going to be able to afford that in a much more competitive kind of organisation. Startups are not burdened with the work of the past. And I think that firms are going to have to change far more rapidly. And I think it will change the social dynamics of the boardroom, where we're going to confront people over real issues about the workforce, what workforce we retain, what workforce we get, what workforce are you developing. And your responsibility as a leader is to lead and grow people that contribute value to the organisation. And if you're not doing that, you may need to go, just because the workforce is going to be even more valuable, but it's not everybody. It's the workforce that really makes a difference in driving those strategic outcomes that enable the sustainability of the firm.
[0:57:33] David Green: And, Dave, bring us home.
[0:57:35] Dave Ulrich: I think it's not new and it is new. There's a timeless principle, values defined by the receiver more than the giver. For 50 years of marriage, I've given my wife gifts, and every year she defines the value of the gift. That's a timeless principle. What's timely is the receivers of HR are new. The 'human' in human resource for me is the stakeholder. And it's not just the employer, the executive, or the board. It's also the customer, the investor, and the community. So, when people say, "I'm in Human Resources", I go, "Absolutely. Are you creating value for a customer, an investor, or community?" Those are all human beings. And the timeless value defined by the receiver is always there. But the 'human' in Human Resources has been moved to stakeholders. That's exciting.
[0:58:26] David Green: As ever, it's been a fascinating privilege to talk to the three of you, Dave, Pat, Dick. Thank you very, very much indeed. For those of you listening, if you don't already follow Dave, Pat and Dick on LinkedIn, then please do so. If you want to find out more about the Global HR Leadership Experience, go to mooreexeced.com/ghrle-program. And don't worry, that's a bit of a mouthful, I will put it in the show notes as well. Dave, Dick, Pat, thank you very much for joining the Digital HR Leaders podcast again.
[0:59:03] Patrick Wright: Thank you for the opportunity.
[0:59:05] David Green: It's not every day you get to hear three of the most influential voices in HR together, and I'm grateful for the wisdom and clarity they shared about the challenges and opportunities facing our profession. Thank you, Dave, Dick and Patrick, it was an honour. And thank you, as always, to you, our listeners, for tuning in each week and listening to the show. If today's episode sparked ideas, questions, or even a shift in perspective, don't forget to subscribe, rate, and share the episode with a colleague or friend. It really helps us reach more forward-thinking leaders like you.
To connect with us at Insight222, follow us on LinkedIn, check out our website at insight222.com, and don't forget to sign up for our bi-weekly newsletter at myHRfuture.com. That's all for now, thank you for tuning in and we'll be back next week with another episode of the Digital HR Leaders podcast. Until then, take care and stay well.