Dave Ulrich, often acknowledged as the ‘father of modern HR’ believes that the role of HR in organisations is now evolving in important, often-irreversible ways. In today’s ever-changing world, HR can no longer afford to stay in its traditional support role and work invisibly in the background. Here’s where he believes that HR must adopt an ‘outside-in’ orientation. According to Ulrich, people matter but organisations matter more and therefore, HR needs to move past a singular focus on employees to focus on delivering greater value to stakeholders outside the firm.
What are some of the elements of this ‘outside-in’ approach?
- Activities versus Value creation
What does today’s HR focus on? Completing activities on a to-do list or creating long-term value? The answer may determine the future of the organisation.
- Context of work
Do HR professionals understand the context of their work or are they suffering from a ‘frog in the well’ syndrome? HR needs to be aware of the myriad factors affecting (and affected by) modern organisations, including:
- Social
- Technological
- Environmental
- Political
- Economical
- Demographical
- Stakeholder connections
HR needs to be aware of stakeholders both inside (employees, management) and outside (customers, investors, community partners) the organisation. Moreover, they need to be connected with these stakeholders and find ways to develop mutually-beneficial relationships with them.
- Hiring employees versus creating talent
HR that follows the outside-in approach tends to focus on creating and nurturing great talent for the long term rather than on just hiring and on-boarding employees in the short term. This also echoes the ‘creating value’ versus ‘completing activities’ conundrum.
- Creating a high-performance organisation
HR now plays a critical role in creating and ensuring a high-performance organisation by hiring people that are open to collaboration and working in teams rather than soloists looking for individual glory. In addition, when oriented outside-in, HR can be the central pivot around which the organisation’s culture, structure, processes and systems are designed, implemented and promoted.
- Building great leadership
Leadership can make or break an organisation. An outside-in HR will be able to build a great leadership code and brand that can take the organisation into the future and allow it to flourish in a crowded, highly-competitive marketplace.
- The HR ‘Organisation’
HR’s understanding of itself and of the organisation needs to change. It must create the right processes and build the right HR administration and hierarchy – centralised, de-centralised or hybrid – to ensure growth and success for the organisation as a whole.
- Innovation in HR
Innovation must be an org-wide strategy and habit; encompassing every department, even ‘support’ departments like HR. In fact, there is a need to constantly design, integrate and innovate HR practises and make them more convenient, connected and personalised to ensure that the department and the organisation are running smoothly.
- Building HR capability
In addition to innovation, HR also needs to invest in building long-term HR capability through new tools and methodologies like Agile management, design thinking and analytics.
- Make HR measurable
The impact of an outside-in HR approach can only be understood if it is measured. Therefore HR analytics and metrics need to be identified to measure HR performance and consequently business performance.
What did you think of this article? Do you think an outside-in HR can add value to your organisation? Leave us a comment below!
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