There has been much debate about Dave Ulrich’s HR model, which has widely been adopted by organisations around the world and aims to enable HR teams to think strategically about their organisation’s human resources as a value-add to their business – and build a talent strategy accordingly.
An academic at Ross School of Business at the University of Michigan, Ulrich has been ranked the #1 Management Educator & Guru by BusinessWeek and selected by Fast Company as one of the 10 most innovative and creative leaders.
Today, debates still continue about how to organise HR departments. Should HR work be centralised (functionally driven across an enterprise), decentralised (uniquely applied to each business), or some combination (shared services)?
Do you think that HR is at different stages of evolution depending on where in the globe an organisation is based?
There are many HR practices that vary by geography, industry, size of company and competitive strategy. Sometimes legislation or regulation shapes how organisations treat people. But there are some universal HR principles that pervade all organisations and settings:
1. HR should be measured by the value it creates more than the activities it does
2. HR delivers value in talent, leadership and capability (culture)
3. HR’s value is increased when it offers integrated solutions of HR practices, rather than isolated or event-driven practices
4. HR is owned by line managers, with HR professionals being architects and anthropologists.
How do you think that HR departments are viewed specifically in the region?
Our research on global HR competencies shows that there are some unique HR challenges in the Gulf States region, including localisation of talent (versus over-reliance on expats), becoming less dependent on a single industry or product (eg: oil) and competing in global, not regional markets.
We found in our research that Middle East HR professionals tend to score lower in the six domains of HR competence, need to have a balance of HR competencies to be seen as effective, and that they have more impact on business results when they offer integrated solutions.
How does this compare with the global position of HR?
Looking at the 12 key foci of an HR department, overall we found that “has clear roles and responsibilities for each of the groups within HR (eg: service centres, centres of expertise, embedded HR)” ranks as among the best done but least impactful on business. On the other hand, “connects HR activities to external stakeholder expectations (eg: customers, investors)” and “tracks and measures the impact of HR” were the two activities with highest business impact and least well done.
Why do you think this is? Do you believe that HR teams lack the skills necessary for these value-adding activities or are perhaps short of confidence?
These findings suggest that a head of HR should make sure that his department focuses on creating value for external stakeholders such as customers. This outside-in HR focus is newer for many HR departments, so it differentiates the good from the bad ones. Many HR departments emphasise success as measured by things that happen inside the company (eg: cost per hire per employee) less than whether the employee hired has the skills that build customer confidence and revenue from key customers. We like to study and find future, not past, HR skills. These outside-in skills define the future.
So how might this play out in Middle Eastern culture?
Some HR leaders are constantly rearranging the boxes on an organisation chart to help the HR department be more effective. This is like assuming a family will get along better by buying new furniture or adding a new room to the house. Physical adjustments may be necessary, but relationships matter most. In the Middle East region, relationships seem to be at the heart of organisational governance. For HR, this means putting people into the function who have strong reputations and abilities to forge good relationships. Then, those in HR should work to highlight relationships as part of their stewardship.
For families to function better, they need to learn to belong, to focus on relationships more than roles. For HR operating models to deliver more value, once the basic roles are satisfied (eg: matching HR structure to business strategy and structure), maybe we should focus more on relationships than roles.
For the HR operating model to deliver real value, HR roles matter. Families need houses with rooms that reflect their lifestyle. But relationships matter even more. A nice house will not ensure a well-functioning family, nor will an elegant organisation chart guarantee an effective HR operating model.
Roles matter, but they matter less than relationships. Maybe it is time for our discussions of the HR operating model to focus more on relationships than roles.
What is your advice to HR leaders in the GCC wary of transferring Western practices?
We look to the past to learn and to the future to create. Even in short histories, senior HR leaders in the Middle East can discern what is more or less likely to work. But they should be very attuned to what will be required to be effective in the future. When learning from other settings, be wary of: best systems, not best practices…any isolated best practice works within a system; adapt, don’t adopt, which means do not just do what someone else did, but learn from what they did and see how it adapts; and leapfrog…don’t do what someone else has done, but go to the next generation of that activity.
What are your top tips for HR leaders operating in this region to win the respect of the people they are leading and develop credibility within their businesses?
Firstly, concentrate less on HR and more on the business. This means starting every conversation with the requirements of the business, not on the activity of HR. In addition, define outcomes of HR in terms of talent, leadership and capability. Make sure you can discern the required talent, leadership and culture for any specific business challenge. Also, create innovative and integrated HR solutions that will deliver these outcomes. Build an HR department that has clear roles and positive relationships. Finally, make sure that HR professionals demonstrate the competencies that deliver business results.