In his speech and interaction with Rita McGarth, Dave Ulrich talks about ways companies can create outside-in value for customers and shareholders.
The most important thing an organization can give an employee is an organization that wins in the marketplace. If we don’t win in the marketplace, there is no workplace. This is an outside-in point of view. If we are going to look at this value logic, the overall assumption is that the value is defined not by what we do but by what somebody gets, so we need to understand the content. Content is king, the context is the kingdom. It is where we do our work. The fundamental assumption, as we are in this coronavirus and as we emerge from it, is we have to create value outside-in. What we do inside our company should create value for those who are outside, namely the customers and the investors.
The context has changed since January when the coronavirus hit us. That virus is the context in which we live now, and so the question is, how do we respond to that virus as individuals, leaders, and organizations? On the one hand, when we respond to a threat, in the back of our heads is the Olympic system. We get threatened and focus on our weaknesses. At an individual level, we have fear, anxiety, hopelessness, etc. At an organizational level, we have psychological risks, low morale, a strategic case. We don’t know where to go, what our culture is, we are ambiguous about our brand and we have a financial free fall. Leaders often feel disoriented and frustrated. These are the threats, but we need to turn our threat into opportunities for people, individuals, leaders, and for the organization. In the middle of this context, we need to discover opportunities. It is because a crisis is a terrible thing to waste.
Rita McGrath: How do you see the role of HR evolving?
Dave Ulrich: “The more things change, the more they’re the same.” The fundamentals of HR continue. HR’s job is not HR, but to create value from the outside-in, to create value in the marketplace with customers, investors, and communities through innovations in talent, leadership, and organization. It never changes. HR is always going to have that same agenda. The specific tools we use will clearly change and the skills we have will change, but the fundamentals of HR will remain the same.
That virus is the context in which we live now, and so the question is, how do we respond to that virus as individuals, leaders, and organizations?
Rita McGrath: Do you have any tips on upskilling or example of any companies that are doing really well?
Dave Ulrich: A lot of companies are doing this brilliantly. But at a high level, we need to find upskilling cooperation between government, the industry, that is, the companies who have a commitment to getting employees with skills, and academia and education. The intersection of those three circles of government, industry, and academia, provides a pool where we can begin to reskill or upskill employees. However, the key to that intersection and the person ultimately responsible for upskilling is the employees themselves. We have to give the employee the self-responsibility, accountability, and opportunity. There are companies doing that during this crisis. They believe that in this crisis, employees have opportunities for increased training either through sabbaticals, online learning, virtual learning, reading, or self-directed learning.
Rita McGrath: Which skills do you think are the most important to be upskilled?
Dave Ulrich: The opportunities for discovery are about skills. Based on extensive research spanning 30 years and covering over 120,000 respondents, 450 companies for studying talent, 500 companies for studying leadership, and 1200 companies for studying organizations, I would suggest we need 10 skills. The first four are skills for how we think or the assumptions, and the last six are the skills for what to do, that is, the actions.
First, learn always, create learning agility. Look at your failures as opportunities to learn. Every one of us can recount our biggest failures or trials, and when we face those failures, we should ask ourselves, “What did I learn from it?”. Those discouragements create learning. In this opportunity of a crisis, we should learn, create learning agility for the people in our company, for ourselves, for our leaders, and for our organization.
Second, look back to be resilient, move forward to be successful. As we look at opportunities in this crisis, look back to be resilient, but look forward to success. Look back at what you tried, what worked and did not work, and then be resilient and have perseverance. When you look forward, ask yourself these four questions. One, what do you want as you go forward? If we don’t define our wants and what success means for us, somebody else will define it for us in ways that we do not find meaningful. Two, who do you serve? Unless and until we serve someone else out of our strengths, we do not strengthen others. We strengthen ourselves so that we can strengthen others. We live our values so that others get value. Three, how will you build? How can you create an institution that is bigger than you are? Four, where are you on the journey of your success? That opportunity is powerful because it moves us not looking backward to where we have been, but it moves us forward to where we can go.
Third, redefine the boundaries of work. The mindset we have shapes what we do. In this coronavirus, one of the opportunities that we should discover is that work is not a place. For decades work has been a place where we go to or where we are at. That definition of work boundaries is wrong. We need to move the definition of boundaries from place to value. Rather than the place where we do our work, what is more relevant is whether that work creates value for our customers or not. Today, the issue is not where we work or how we work, but how we work in ways that create value for our customers.
Fourth, navigate paradox, handle tension, and duality. We live in a world of paradox. It is like sailing; we cannot control the wind but we can adjust our sails. An airplane never follows a straight route but goes left and right. That is the tension in duality. In this coronavirus, these are the paradoxes we see. Should we care for the individual? Thinkers are speaking about it, that it is all about people, to care for people, but we also have to attend to the organization. We have to do both because if we don’t attend to the organization, there are no people. If we attend to people without the organization, we fail. We need to be bold and decisive in the short term and have long term enduring values. We need to navigate that paradox, converge focus, be direct, know what to do, prune, diverge, diversity, variety, seek new answers, think outside, be resilient, and aspire to the future. As leaders and HR professionals our job in this virus is to navigate that tension.
There are five skills of a paradox navigator for HR people, for marketing people, or for business leaders. First is, learning cognitive complexity; seeing from different perspectives, and learning. The second is, being socially enduring; having the ability to disagree without being disagreeable. The third is, being socially connected; getting out of our isolated social groups, and establishing connections outside our comfort zones. Fourth is, being personally aware; to be aware of our biases and predispositions. Lastly, if we are going to navigate paradox, we have got to have a strong set of core values.
Fifth, customize work. This coronavirus has shaped everybody differently. We are having to adjust ourselves to the current times. When we leave this coronavirus, take that lesson. Customize for customers, personalize for employees, and tailor the work.
Sixth, do not isolate. We have distanced ourselves socially but it does not mean isolating ourselves. Social isolation is the third leading cause of mortality. Research tells us that social isolation distances people and causes them to get dysfunctional, so we need to continue to build relationships and share ourselves.
Seventh, live the right values and culture. If we are going to build the right culture, we cannot just think about culture as a set of events. It is our rituals or symbols or a pattern. It is what we do inside the company. This virus is an opportunity to build a culture, not as an event or a pattern but as an identity. If we imagine companies as trees, many companies define culture as their roots. I prefer to start the culture with the leaves of the tree. When you take that external brand and you connect it to your internal values, that becomes your culture. So, it is hoped that out of this crisis, we build the right culture.
Eighth, we live in a world of uncertainty, and there is a lot of research that says 50% of what we are is biology, 40% are circumstances and 30% is what we control. Today, we simply live in a world where we don’t know what will happen. We should begin to harness that uncertainty. It is like harnessing a wild horse. To turn this into an opportunity, we need to face our fears and vulnerabilities, take simple steps and experiments not only in strategy but also in our own life, fail fast, fail forward, use humour, be calm, be curious and define success from within.
Ninth, seek guidance on talent, leadership, organization, and HR. Guidance is not just telling what to do but giving direction about what you should do. The time has come out of this virus to create a guidance system.
Tenth, always begin with “how are you?” and end with “take care of yourself”. Find meaning in your life and bring meaning to others’. So, the last opportunity in this crisis is to create your brand, your image, your mission, and your vision.
Rita McGrath: What do you think will happen to education now?
Dave Ulrich: We have all made transitions. Every time there is a transition in our life, we take two things, knowledge and relationships. Education is about sharing knowledge, and it does not have to be a place. Education can be sharing knowledge through technology, through distribution, and through ideas, and relationships are a part of the education experience. It is one of the reasons why simply doing purely virtual things is not as powerful as in person. We need blended learning because, in the university setting, we want to share knowledge and relationships that will transition post-university. Traditionally, most of the universities’ focus is on the ages between 19 and 24 or 25. Those four or five years are going to become 20% of our lifetime learning and 80% is going to be from 25 to 75 years. The real learning occurs after we leave, and I hope that is what we begin to create in education.
Today, the issue is not where we work or how we work, but how we work in ways that create value for our customers.
Rita McGrath: Is paradoxical friendly thinking similar to the both-and concept versus the either-or concept?
Dave Ulrich: It is exactly that. It is both short-term and long-term. Hence, one of the roles of a great HR professional or a great leader is to have point-counterpoint to engage in that dialogue, being respectful of each other, and disagree without being disagreeable, so that the duality in that discussion leads us to a better idea. This is one of the values of diversity because diversity allows us to get a divergence of ideas, but diversity alone is not good enough. At the end of diversity, we have to have unity because if all we have is diversity with no unity, we have chaos. Paradox has not to be managed but navigated. Managing paradox would mean to solve it but we have to tweak back and forth.
Rita McGrath: One of the things we have talked about recently is thinking of this crisis as an accident. Can you elaborate on that?
Dave Ulrich: When we come across an accident, phase one is first aid; stopping the bleeding and getting the victim out of the car. It was similar to the coronavirus when the dominoes in America started to fall and everything began shutting down. That was the first phase. Stage two is when the ambulance comes and we go to the hospital. You have a person that helps you, a person who serves you and they look deeper to see why you are bleeding. Stage three is the recovery in the hospital. That is where most of us are when we are learning to live with this virus and beginning to think about how we are going to rehabilitate and what we are going to take away from it.
Rita McGrath: I would request you to share your closing remarks.
Dave Ulrich: My final message is that the best is yet to come. Even though we are struggling through this pandemic, the best is always ahead. I hope that all of us will continue to look at some of those opportunities in a crisis and make next year the best.