Dave Ulrich - A New Mandate for HR

A New Mandate for Human Resources

by Dave Ulrich

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Harvard Business Review

hould we do away with HR? In recent years,a number of people who study and write aboutbusiness – along with many who run busi-

nesses – have been debating that question. The de-bate arises out of serious and widespread doubtsabout HR’s contribution to organizational perfor-mance. And as much as I like HR people – I havebeen working in the field as a researcher, professor,and consultant for 20 years – I must agree that thereis good reason for HR’s beleaguered reputation. It is often ineffective, incompetent, and costly; in aphrase, it is value sapping. Indeed, if HR were to remain configured as it is today in many companies,I would have to answer the question above with aresounding “Yes – abolish the thing!”

But the truth is, HR has never been more neces-sary. The competitive forces that managers face today and will continue to confront in the futuredemand organizational excellence. The efforts to

achieve such excellence – through a focus on learn-ing, quality, teamwork, and reengineering – are driven by the way organizations get things done andhow they treat their people. Those are fundamentalHR issues. To state it plainly: achieving organiza-tional excellence must be the work of HR.

The question for senior managers, then, is notShould we do away with HR? but What should wedo with HR? The answer is: create an entirely newrole and agenda for the field that focuses it not ontraditional HR activities, such as staffing and com-pensation, but on outcomes. HR should not be de-fined by what it does but by what it delivers –results that enrich the organization’s value to cus-tomers, investors, and employees.

More specifically, HR can help deliver organiza-tional excellence in the following four ways:! First, HR should become a partner with seniorand line managers in strategy execution, helping to

124 ARTWORK BY MICHAEL WOLOSCHINOW

S

move planning from the conference room to themarketplace.! Second, it should become an expert in the waywork is organized and executed, delivering admin-istrative efficiency to ensure that costs are reducedwhile quality is maintained.! Third, it should become a champion for employ-ees, vigorously representing their concerns to seniormanagement and at the same time working to in-crease employee contribution; that is, employees’commitment to the organization and their abilityto deliver results.! And finally, HR should become an agent of con-tinuous transformation, shaping processes and aculture that together improve an organization’s capacity for change.

Make no mistake: this new agenda for HR is aradical departure from the status quo. In most com-panies today, HR is sanctioned mainly to play

policy police and regulatory watchdog. It handlesthe paperwork involved in hiring and firing, man-ages the bureaucratic aspects of benefits, and ad-ministers compensation decisions made by others.When it is more empowered by senior manage-ment, it might oversee recruiting, manage trainingand development programs, or design initiatives toincrease workplace diversity. But the fact remains:the activities of HR appear to be – and often are –disconnected from the real work of the organiza-tion. The new agenda, however, would mean thatevery one of HR’s activities would in some concreteway help the company better serve its customers or otherwise increase shareholder value.

Can HR transform itself alone? Absolutely not.In fact, the primary responsibility for transformingthe role of HR belongs to the CEO and to every linemanager who must achieve business goals. The rea-son? Line managers have ultimate responsibility

Copyright © 1997 by the President and Fellows of Harvard College. All rights reserved. 125

A NewMandateforHumanResourcesby Dave Ulrich

HR should be defined not by whatit does but by what it delivers.

for both the processes and the outcomes of the com-pany. They are answerable to shareholders for cre-ating economic value, to customers for creatingproduct or service value, and to employees for cre-ating workplace value. It follows that they shouldlead the way in fully integrating HR into the com-pany’s real work. Indeed, to do so, they must becomeHR champions themselves. They must acknowl-edge that competitive success is a function of orga-nizational excellence. More important, they musthold HR accountable for delivering it.

Of course, the line should not impose the newagenda on the HR staff. Rather, operating managersand HR managers must form a partnership toquickly and completely reconceive and reconfigurethe function – to overhaul it from one devoted to ac-tivities to one committed to outcomes. The processwill be different in every organization, but the re-sult will be the same: a businessera in which the question Shouldwe do away with HR? will beconsidered utterly ridiculous.

Why HR Matters NowMore Than EverRegardless of their industry, size,or location, companies todayface five critical business chal-lenges. Collectively, these chal-lenges require organizations tobuild new capabilities. Who iscurrently responsible for devel-oping those capabilities? Every-one – and no one. That vacuumis HR’s opportunity to play a leadership role in en-abling organizations to meet the following compet-itive challenges:

Globalization. Gone are the days when compa-nies created products at home and shipped themabroad “as is.” With the rapid expansion of globalmarkets, managers are struggling to balance theparadoxical demand to think globally and act locally. That imperative requires them to movepeople, ideas, products, and information around theworld to meet local needs. They must add new andimportant ingredients to the mix when makingstrategy: volatile political situations, contentiousglobal trade issues, fluctuating exchange rates, andunfamiliar cultures. They must be more literate inthe ways of international customers, commerce,and competition than ever before. In short, global-ization requires that organizations increase theirability to learn and collaborate and to manage di-versity, complexity, and ambiguity.

Profitability Through Growth. During the pastdecade, most Western companies have been clear-ing debris, using downsizing, reengineering, de-layering, and consolidation to increase efficiencyand cut costs. The gains of such yard work, how-ever, have largely been realized, and executives willnow have to pay attention to the other part of theprofitability equation: revenue growth.

The drive for revenue growth, needless to say,puts unique demands on an organization. Compa-nies seeking to acquire new customers and developnew products must be creative and innovative, andmust encourage the free flow of information andshared learning among employees. They must alsobecome more market focused – more in touch withthe fast changing and disparate needs of their cus-tomers. And companies seeking growth throughmergers, acquisitions, or joint ventures require oth-

er capabilities, such as the finelyhoned skills needed to integratedifferent organizations’ workprocesses and cultures.

Technology. From videocon-ferencing to the Internet, tech-nology has made our worldsmaller and faster. Ideas andmassive amounts of informationare in constant movement. Thechallenge for managers is tomake sense and good use of whattechnology offers. Not all tech-nology adds value. But technol-ogy can and will affect how andwhere work gets done. In thecoming years, managers will

need to figure out how to make technology a viable,productive part of the work setting. They will needto stay ahead of the information curve and learn toleverage information for business results. Other-wise, they risk being swallowed by a tidal wave ofdata – not ideas.

Intellectual Capital. Knowledge has become a direct competitive advantage for companies sellingideas and relationships (think of professional ser-vice, software, and technology-driven companies)and an indirect competitive advantage for all com-panies attempting to differentiate themselves byhow they serve customers. From now on, success-ful companies will be the ones that are the most

a new mandate for human resources

HR’s activitiesappear to be–and often are–disconnected from the real

work of anorganization.

Dave Ulrich is a professor at the University of Michi-gan’s School of Business in Ann Arbor. He is the authorof Human Resource Champions: The Next Agenda forAdding Value and Delivering Results (Harvard BusinessSchool Press, 1997).

126 harvard business review January – February 1998

adept at attracting, developing, and retaining indi-viduals who can drive a global organization that isresponsive to both its customers and the burgeon-ing opportunities of technology. Thus the challengefor organizations is making sure they have the capa-bility to find, assimilate, develop, compensate, andretain such talented individuals.

Change, Change, and More Change. Perhaps thegreatest competitive challenge companies face isadjusting to – indeed, embracing – nonstop change.They must be able to learn rapidly and continu-ously, innovate ceaselessly, and takeon new strategic imperatives fasterand more comfortably. Constantchange means organizations mustcreate a healthy discomfort with thestatus quo, an ability to detect emerg-ing trends quicker than the competi-tion, an ability to make rapid deci-sions, and the agility to seek newways of doing business. To thrive, inother words, companies will need tobe in a never-ending state of transfor-mation, perpetually creating funda-mental, enduring change.

HR’s New RoleThe five challenges described abovehave one overarching implication forbusiness: the only competitiveweapon left is organization. Sooner orlater, traditional forms of competi-tiveness – cost, technology, distribu-tion, manufacturing, and product features – can be copied. They havebecome table stakes. You must havethem to be a player, but they do notguarantee you will be a winner.

In the new economy, winning willspring from organizational capabil-ities such as speed, responsiveness,agility, learning capacity, and employee compe-tence. Successful organizations will be those thatare able to quickly turn strategy into action; to man-age processes intelligently and efficiently; to maxi-mize employee contribution and commitment; andto create the conditions for seamless change. Theneed to develop those capabilities brings us back tothe mandate for HR set forth at the beginning ofthis article. Let’s take a closer look at each HR im-perative in turn.

Becoming a Partner in Strategy Execution. I’mnot going to argue that HR should make strategy.Strategy is the responsibility of a company’s execu-

tive team – of which HR is a member. To be full-fledged strategic partners with senior management,however, HR executives should impel and guide serious discussion of how the company should beorganized to carry out its strategy. Creating theconditions for this discussion involves four steps.

First, HR should be held responsible for definingan organizational architecture. In other words, itshould identify the underlying model of the com-pany’s way of doing business. Several well-estab-lished frameworks can be used in this process. Jay

Galbraith’s star model, for example, identifies fiveessential organizational components: strategy,structure, rewards, processes, and people. The well-known 7-S framework created by McKinsey &Company distinguishes seven components in acompany’s architecture: strategy, structure, sys-tems, staff, style, skills, and shared values.

It’s relatively unimportant which framework theHR staff uses to define the company’s architecture,as long as it’s robust. What matters more is that anarchitecture be articulated explicitly. Without suchclarity, managers can become myopic about howthe company runs – and thus about what drives


harvard business review January – February 1998 127

Many HR processes can be done better, faster, and cheaper. Finding and fixing them is part of the new HR’s work.

Shared mind-set

Competence

Consequence

Governance

Capacityfor change

Leadership

To what extent does our company havethe right culture to reach its goals?

To what extent does our company havethe required knowledge, skills, and abilities?

To what extent does our company havethe appropriate measures, rewards, and incentives?

To what extent does our company havethe right organizational structure, communications systems, and policies?

To what extent does our company havethe ability to improve work processes, to change, and to learn?

To what extent does our company havethe leadership to achieve its goals?

Rating(1-10)

Description of best practice

Gap between company’s currentpractice and bestpractice

From Architecture to AuditAfter HR has determined the company’s underlying architecture,it can use a framework like the one below to guide the organiza-tion through the discussion and debate of the audit process.

strategy implementation and what stands in itsway. They might think only of structure as the dri-ving force behind actions and decisions, and neglectsystems or skills. Or they might understand thecompany primarily in terms of its values and payinadequate attention to the influence of systems onhow work – that is, strategy execution – actuallygets accomplished.

Senior management should ask HR to play therole of an architect called into an already-con-structed building to draw up its plans. The architectmakes measurements; calculates dimensions;notes windows, doors, and staircases; and examinesthe plumbing and heating infrastructures. The re-sult is a comprehensive set of blueprints that con-tains all the building’s parts and shows how theywork together.

Next, HR must be accountable for conducting anorganizational audit. Blueprints can illuminate the

places in a house that require immediate improve-ment; organizational-architecture plans can besimilarly useful. They are critical in helping man-agers identify which components of the companymust change in order to facilitate strategy execu-tion. Again, HR’s role is to shepherd the dialogueabout the company’s blueprints.

Consider a company in which HR defined the organization’s architecture in terms of its culture,competencies, rewards, governance, work pro-cesses, and leadership. The HR staff was able to usethat model to guide management through a rigor-ous discussion of “fit” – did the company’s culturefit its strategic goals, did its competencies, and soforth. When the answer was no, HR was able toguide a discussion of how to obtain or develop whatwas missing. (For an example of the questionsasked in this discussion, see the chart “From Archi-tecture to Audit.”)



Question

The third role for HR as a strategic partner is toidentify methods for renovating the parts of the or-ganizational architecture that need it. In otherwords, HR managers should be assigned to take thelead in proposing, creating, and debating best prac-tices in culture change programs, for example, or inappraisal and reward systems. Similarly, if strategyimplementation requires, say, a team-based organi-zational structure, HR would be responsible forbringing state-of-the-art approaches for creatingthis structure to senior management’s attention.

Fourth and finally, HR must take stock of its ownwork and set clear priorities. At any given moment,the HR staff might have a dozen initiatives in itssights, such as pay-for-performance, global team-work, and action-learning development experi-ences. But to be truly tied to business outcomes,HR needs to join forces with operating managers tosystematically assess the impactand importance of each one ofthese initiatives. Which ones arereally aligned with strategy im-plementation? Which onesshould receive attention imme-diately, and which can wait?Which ones, in short, are trulylinked to business results?

Because becoming a strategicpartner means an entirely newrole for HR, it may have to ac-quire new skills and capabilities.Its staff may need more educa-tion in order to perform the kindof in-depth analysis an organiza-tional audit involves, for exam-ple. Ultimately, such new knowledge will allowHR to add value to the executive team with confi-dence. In time, the concept of HR as a strategic part-ner will make business sense.

Becoming an Administrative Expert. For decades,HR professionals have been tagged as administra-tors. In their new role as administrative experts,however, they will need to shed their traditionalimage of rule-making policy police, while stillmaking sure that all the required routine work incompanies is done well. In order to move from theirold role as administrators into their new role, HRstaff will have to improve the efficiency of boththeir own function and the entire organization.

Within the HR function are dozens of processesthat can be done better, faster, and cheaper. Findingand fixing those processes is part of the work of thenew HR. Some companies have already embracedthese tasks, and the results are impressive. Onecompany has created a fully automated and flexible

benefits program that employees can manage with-out paperwork; another has used technology toscreen résumés and reduce the cycle time for hiringnew candidates; and a third has created an elec-tronic bulletin board that allows employees tocommunicate with senior executives. In all threecases, the quality of HR work improved and costswere lowered, generally by removing steps or lever-aging technology.

But decreased costs aren’t the only benefit ofHR’s becoming the organization’s administrativeexpert. Improving efficiency will build HR’s credi-bility, which, in turn, will open the door for it to become a partner in executing strategy. Considerthe case of a CEO who held a very low opinion ofthe company’s HR staff after they sent a letter to ajob candidate offering a salary figure with the deci-mal point in the wrong place. (The candidate called

the CEO and joked that she didn’t realize the job would makeher a millionaire.) It was only after the HR staff proved theycould streamline the organiza-tion’s systems and proceduresand deliver flawless administra-tive service that the CEO finallyfelt comfortable giving HR a seatat the strategy table.

HR executives can also provetheir value as administrative ex-perts by rethinking how work isdone throughout the organiza-tion. For example, they can de-sign and implement a systemthat allows departments to share

administrative services. At Amoco, for instance,HR helped create a shared-service organization thatencompassed 14 business units. HR can also createcenters of expertise that gather, coordinate, and dis-seminate vital information about market trends,for instance, or organizational processes. Suchgroups can act as internal consultants, not only sav-ing the company money but also improving itscompetitive situation.

Becoming an Employee Champion. Work todayis more demanding than ever – employees are con-tinually being asked to do more with less. And ascompanies withdraw the old employment contract,which was based on security and predictable pro-motions, and replace it with faint promises of trust,employees respond in kind. Their relationship withthe organization becomes transactional. They givetheir time but not much more.

That kind of curtailed contribution is a recipe fororganizational failure. Companies cannot thrive


Decreasing costsand improvingefficiency will

help HR become a partner inexecutingstrategy.


unless their employees are engaged fully. Engagedemployees – that is, employees who believe theyare valued – share ideas, work harder than the nec-essary minimum, and relate better to customers, toname just three benefits.

In their new role, HR professionals must be heldaccountable for ensuring that employees are en-gaged – that they feel committed to the organiza-tion and contribute fully. In the past, HR soughtthat commitment by attending to the social needsof employees – picnics, parties, United Way cam-paigns, and so on. While those activities must stillbe organized, HR’s new agenda supersedes them.HR must now take responsibility for orienting andtraining line management about the importance ofhigh employee morale and how to achieve it. In addition, the new HR should be the employees’voice in management discussions; offer employeesopportunities for personal andprofessional growth; and provideresources that help employeesmeet the demands put on them.

Orienting and training linemanagement about how toachieve high employee moralecan be accomplished using sev-eral tools, such as workshops,written reports, and employeesurveys. Such tools can helpmanagers understand thesources of low morale within theorganization – not just specifi-cally, but conceptually. For in-stance, HR might inform theline that 82% of employees feeldemoralized because of a recent downsizing. That’suseful. But more than that, HR should be responsi-ble for educating the line about the causes of lowemployee morale. For instance, it is generallyagreed by organizational behavior experts that em-ployee morale decreases when people believe thedemands put upon them exceed the resources avail-able to meet those demands. Morale also dropswhen goals are unclear, priorities are unfocused, orperformance measurement is ambiguous. HRserves an important role in holding a mirror in frontof senior executives.

HR can play a critical role in recommendingways to ameliorate morale problems. Recommen-dations can be as simple as urging the hiring of addi-tional support staff or as complex as suggesting thatreengineering be considered for certain tasks. Thenew role for HR might also involve suggesting thatmore teams be used on some projects or that em-ployees be given more control over their own work

schedules. It may mean suggesting that line execu-tives pay attention to the possibility that some em-ployees are being asked to do boring or repetitivework. HR at Baxter Healthcare, for example, identi-fied boring work as a problem and then helped tosolve it by redesigning work processes to connectemployees more directly with customers.

Along with educating operating managers aboutmorale, HR staff must also be an advocate for em-ployees – they must represent the employees tomanagement and be their voice in management dis-cussions. Employees should have confidence thatwhen decisions are made that affect them (such as aplant closing), HR’s involvement in the decision-making process clearly represents employees’views and supports their rights. Such advocacy can-not be invisible. Employees must know that HR istheir voice before they will communicate their

opinions to HR managers.Becoming a Change Agent. To

adapt a phrase, Change happens.And the pace of change today,because of globalization, techno-logical innovation, and informa-tion access, is both dizzying anddazzling. That said, the primarydifference between winners andlosers in business will be theability to respond to the pace ofchange. Winners will be able toadapt, learn, and act quickly.Losers will spend time trying tocontrol and master change.

The new HR has as its fourthresponsibility the job of building

the organization’s capacity to embrace and capital-ize on change. It will make sure that change initia-tives that are focused on creating high-performingteams, reducing cycle time for innovation, or im-plementing new technology are defined, developed,and delivered in a timely way. The new HR can alsomake sure that broad vision statements (such as,We will be the global leader in our markets) gettransformed into specific behaviors by helping em-ployees figure out what work they can stop, start,and keep doing to make the vision real. At Hewlett-Packard, HR has helped make sure that the com-pany’s value of treating employees with trust, dig-nity, and respect translates into practices that, forexample, give employees more control over whenand where they work.

Change has a way of scaring people – scaringthem into inaction. HR’s role as a change agent is toreplace resistance with resolve, planning with re-sults, and fear of change with excitement about its


HR must now train line

management inmethods of

achieving highemployee

morale.


Change Begins by AskingWho, Why, What, and How



Key Success Factors for Change

Leading change (Who is responsible?)

Creating a shared need (Why do it?)

Shaping a vision (What will it look like when we are done?)

Mobilizing commitment(Who else needs to be involved?)

Modifying systems and structures (How will it be institutionalized?)

Monitoring progress(How will it be measured?)

Making it last(How will it get started and last?)

Questions to Assess and AccomplishThe Key Success Factors for Change

Do we have a leader…who owns and champions the change?who publicly commits to making it happen?who will garner the resources necessary to sustain it?who will put in the personal time and attention needed

to follow through?

Do employees…see the reason for the change?understand why it is important?see how it will help them and the business in the short

term and long term?

Do employees…see the outcomes of the change in behavioral terms

(that is, in terms of what they will do differently as a result of the change)?

get excited about the results of accomplishing the change?understand how it will benefit customers and other stakeholders?

Do the sponsors of the change…recognize who else needs to be committed to the change

to make it happen?know how to build a coalition of support for the change?have the ability to enlist support of key individuals in

the organization?have the ability to build a responsibility matrix to make

the change happen?

Do the sponsors of the change…understand how to link it to other HR systems such as

staffing,training, appraisal, rewards, structure, and communication?

recognize the systems implications of the change?

Do the sponsors of the change…have a means of measuring its success?plan to benchmark progress against both the results of the

change and the process of implementing it?

Do the sponsors of the change…recognize the first steps in getting started?have a short-term and long-term plan to keep attention

focused on the change?have a plan to adapt the change over time?

HR staff at GE used this change model to guide a transformation process at the company.

possibilities. How? The answer lies in the creationand use of a change model. (For an example of a veryeffective change model, developed with and usedextensively by GE, see the chart “Change Begins byAsking Who, Why, What, and How.”) HR profes-sionals must introduce such a model to their orga-nizations and guide executive teams through it –that is, steer the conversation and debate that an-swers the multitude of questions it raises. Themodel, in short, must be a managerial tool champi-oned by HR. It helps an organization identify thekey success factors for change and assess the orga-nization’s strengths and weaknesses regarding eachfactor. The process can be arduous, but it is one ofthe most valuable roles HR can play. As changeagents, HR professionals do not themselves executechange – but they make sure that it is carried out.

Consider the case of a company whose seniormanagement team announced that “valuing diver-sity” was a top priority in 1996. Six months into theyear, the team acknowledged that the diversity ini-tiative had received more rhetoric than action. Thecompany’s HR professionals asked the team tospend several hours profiling the diversity initia-tive using a change model. (See the graph “Profile ofa Change Initiative in Distress.”) The resultinganalysis revealed that the diversity initiative wouldfail unless the senior management team exploredseveral critical questions, among them: Why are weseeking diversity? What will be the benefit to thebusiness and its customers? What is the ideal formof diversity for this organization? Who needs to be

supportive and involved to make the initiativecome to life?

HR leaders spent several more hours with themanagement team guiding a conversation that an-swered those questions. Shortly afterward, theywere able to present the team with an action planfor moving the diversity initiative forward. ThusHR did not decide what changes the organizationwas going to embrace, but it did lead the process tomake them explicit.

Perhaps the hardest and most important chal-lenge facing many companies in this era of flux ischanging their culture. In helping to bring about anew culture, HR must follow a four-step process:! First, it must define and clarify the concept of cul-ture change.! Second, it must articulate why culture change iscentral to business success.! Third, it must define a process for assessing thecurrent culture and the desired new culture, as wellas for measuring the gap between the two.! And fourth, it must identify alternative approach-es to creating culture change.

HR played an important part in changing the cul-ture at Sears, which underwent a transformation ofits business beginning in 1994. In facilitating thatchange, HR first took on the task of getting the or-ganization to define and clarify the concept of cul-ture. It helped lead the top 100 managers throughdiscussions and debates of the questions, What arethe top three things we want to be known for by ourcustomers? and What do we do that is world class in



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Profile of a Change Initiative in Distress

leading change

creatingneed

shapingvision

mobilizingcommitment

changingsystems andstructures

monitoringprogress

making change

last

One company’s HR professionals used this chart to help senior management understand why a high-profile diversity initiative was going nowhere.

those things? Ultimately, those conversations ledto a consensus that Sears would define its culture as“the identity of the company in the minds of thebest customers.” In addition, HR at Sears took onthe responsibility of making the business case for atransformation of the company’s culture. It com-piled data showing that even a small increase inemployee commitment led to a measurable in-crease in customer commitment and store prof-itability. The data illustrate conclusively thatSears’s transformation affected employees, cus-tomers, and investors.

HR at Sears guided the company’s culture changein numerous other ways.1 The specific details, how-ever, are not nearly as important as their implica-tions. HR can be the architect of new cultures, butto do so, its purpose must be redefined. Virtuallyevery imperative of the new mandate for HR re-quires such a redefinition. Andfor it to happen, senior managersmust lead the way.

Four Changes for the LineThe new mandate for HR re-quires dramatic changes in howHR professionals think and be-have. But perhaps more impor-tant, it also requires that seniorexecutives change what they ex-pect from HR and how they be-have toward the HR staff. Thefollowing are four ways senioroperating managers can createan era in which HR is focused on outcomes insteadof activities:

Communicate to the organization that the “softstuff” matters. At Hewlett-Packard, managing peo-ple was one of the two hoshin (major objectives) ofthe CEO for 1997. At General Electric, CEO JackWelch claims he spends 40% of this time on peopleissues. At Southern Company, senior managers areworking to create an empowered organization toensure faster and better decision making. Thepoint? For HR to be taken seriously, senior man-agers must demonstrate that they believe typicalHR issues – the soft stuff like culture change and in-tellectual capital – are critical to business success.

Operating managers can signal this belief in sev-eral ways. They can talk seriously about how orga-nizational capabilities create value for investors,customers, and employees. They can invest thetime needed to make sure organizational changesare debated and implemented. They can include

HR professionals in strategy discussions and stateexplicitly that without the collaboration of HR,strategies are more hopes than realities, promisesthan acts, and concepts than results.

Explicitly define the deliverables from HR, andhold HR accountable for results. It is one thing totell HR that it is responsible for employee contribu-tion and quite another to set a specific goal – say, a10% increase in employee morale as measured by a survey. And once such specific goals are set, con-sequences must follow if they are missed.

The new mandate for HR is like any other busi-ness initiative in this way. A company has a muchbetter chance of achieving its goals if senior man-agers state specifically what they expect from HRand then track, measure, and reward performance.

Invest in innovative HR practices. Like everyother area of business, HR gets its share of new

technologies and practices, andsenior line executives should bealways on the lookout for suchpractices. Conferences and man-agement literature are alwaysgood places to hear of new waysof approaching HR, but seniormanagers should also be awareof innovative HR practices goingon at other companies and ofnew practices that are being ad-vocated by respected consultants.

Investing in new HR practicesis another way to signal to theorganization that HR is worthyof the company’s money and attention. It is also a way to

make sure that HR has the tools, information, andprocesses that it needs to execute its new mandate.

As new practices are identified, line managersshould expect HR to adapt to them, not adopt them.Too often, after learning about an innovative idea,HR immediately tries to copy it wholesale. Such efforts often fail, and at a high emotional cost. Instead, investment in new HR practices should focus on learning not only what works elsewherebut also how a new practice should work in thecompany’s unique competitive situation.

Upgrade HR professionals. Finally, the hardestbut perhaps most important thing senior managerscan do to drive forward the new mandate for HR isto improve the quality of the HR staff itself. Too often, HR departments are like computers made upof used parts. While the individual parts may work,they don’t work well together. When more is ex-pected of HR, a higher quality of HR professionalmust be found. Companies need people who know


When more isexpected of the HR function,

a higher quality of HR

professional must be found.


the business, understand the theory and practice ofHR, can manage culture and make change happen,and have personal credibility. Sometimes, such in-dividuals already exist within the HR function butneed additional training. Other times, they have tobe brought in from other parts of the company. Instill other cases, they must be hired from outside.

Regardless, HR cannot expand its role in an orga-nization without the requisite expertise. Becominga strategic partner demands a degree of knowledgeabout strategy, markets, and the economy. Becom-ing an administrative expert demands some knowl-edge of reengineering, as well as the intricacies ofwhat the line actually does. If HR is to effect realchange, it must be made up of people who have theskills they need to work from a base of confidenceand earn what too often it lacks – respect.

Hard Work AheadTo meet the increased expectations of their organi-zations, HR professionals must begin to act profes-sionally. They must focus more on the deliverables

of their work and less on just getting their workdone. They must articulate their role in terms ofthe value they create. They must create mecha-nisms so that business results quickly follow. Theymust measure their effectiveness in terms of busi-ness competitiveness rather than employee com-fort and lead cultural transformation rather thanconsolidate, reengineer, or downsize in order toturn a company around.

Senior executives who recognize the economicvalue and the benefit to their customers of intellec-tual capital and organizational capability need todemand more of the HR function. They need to in-vest in HR as if it were a business. And they mustget beyond the stereotype of HR professionals as incompetent value-sapping support staff. It’s timeto destroy that stereotype and unleash HR’s full potential.

1. For more on the transformation of Sears, see The Employee-Customer-Profit Chain at Sears, by Anthony J. Rucci, Steven P. Kirn, and Richard T.Quinn, in this issue of HBR.

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