I have now read it, and still feel I’m right to argue that:
- Organisational capability should provide our initial focus, from which we can think think about impact on the business, not the other way around.
- Organisational capability that will in itself provide competitive advantage is best identified through an inside-out, not an outside-in perspective.
- Each organisation needs to develop an HCM strategy after having identified its organisational capabilities, but before it moves into planning to transform its HR function.
Actually, for me, my third point above came out even more strongly as I read the book, and particularly the case studies at the back:
- Flextronics’ organisational capabilities are leadership, customer connectivity and efficiency. And its HR strategy is design, discover and deliver.
- Pfizer’s organisational capabilities are organising the business for its best delivery and linking the outputs of the business units across the company to achieve results. Its HR strategy is not to be an enabler of business success but a driver of it (nice one, Pfizer!).
- Intel’s organisational capabilities are fast innovation, brilliant talent and proactive collaboration. It’s HR strategy is to reduce the cost and complexity of tactical delivery and to develop a strategic HR competency. (There is a nice link here in that Intel HR is also seeking to foster innovation and collaboration within its own organisation – I don’t like the way it labels itself as a support function though).
- Takeda’s organisational capabilities are talent, accountability and innovation. It’s HR strategy is to deliver talent, accountability and innovation (!).
For each of these, you need to understand the HCM strategy before being able to judge whether the HR strategy is appropriate. There’s just too tenuous a link between the organisational capability and the HR strategy otherwise.
Takeda’s HR redesign isn’t just about delivering talent, accountability and innovation (how would you organise your HR function to do this?). It’s understanding what HR needs to do in order to deliver these capabilities (HR actions, learning and OD interventions, perhaps a bit more use of of social media etc). And then organising to be able to do these things effectively.
The missing link is a critical one.
I wish I was able to a couple of case studies of my own. Perhaps I’ll have a chat to a couple of clients and come back to do this in a few weeks time.
One reason I wanted to revisit the book was that I do feel I gave Mr Ulrich a bit of a hard time in my last two posts (maybe in this one too). I’m not one of those bloggers who pour scorn on people for its’ own (or for SEO’s) sake. I just find that the more closely aligned I am with a particular author’s thinking, the easier I find it to criticise.
What I do like about ‘HR Transformation’ is the way it pulls together just about all of Ulrich’s previous books (probably just with the exception of his three leadership books). There are also a couple of useful corrections, for example that ‘there is no magic list of desired or ideal capabilities’ (a point I’ve made several times).
So if you’re new to Dave Ulrich, you really don’t need to read any of these other books now.
But then, you’d still be better off reading mine!