Dave Ulrich's Tips During Tough Economic Times

Professor Dave Ulrich offers tips to protect human capital during tough economic times.

As the economic downturn rides roughshod over the nation's workforce, human resources professionals face a wide range of new challenges. Whether protecting a collective culture or protecting one's own morale, the work of the HR professional is particularly tough during tough times. Enter Dave Ulrich, named the "Most Influential HR Thinker" for the fourth year in a row by HR Magazine. Ulrich is widely published on the subject of leadership development and organizations; he has more than 100 articles and book chapters, as well as 20 books, to his credit. In addition, Ulrich has helped generate award-winning databases to better align corporate strategies and human resource practices. He is co-founder of The RBL Group, an advisory firm for the world's top HR leaders.

In the following Q&A, Ross Thought In Action's Terry Kosdrosky sheds some light on his this influential thinker's latest research in the field and asks Ulrich about ways in which the HR industry is dealing with the recession.

How is the human resources field evolving and adapting in this recessionary environment?

Ulrich: In tough times, business leaders have to make even more difficult decisions. Pruning products, reengineering processes, and increasing productivity from people are all part of cost cutting. HR issues are at the heart of this work. HR work frames and sustains a culture that will endure when the economy recovers. For example, talented employees may not leave the firm now because they have nowhere to go, but if they are treated poorly now they will remember the culture and leave when they have the opportunity. HR work increases productivity by attending to headcount, work processes, engagement, and compensation. HR work invests in employees so that they are ready for the future, not just the past. HR in good times and bad is an essential part of business results not because HR people clamor for it, but because line managers know that to build sustained success, they must invest in individual talent and organizational capabilities.

A lot of your work centers on matching corporate strategy with human resource practices. How far do you think corporations have come along those lines?

Ulrich: My sense is that in any innovation, there is a 20–60–20 rule. That means 20 percent of the companies, or people, are avant-garde and already doing it; 20 percent will never get there; and 60 percent can be moved. In doing HR more strategically, I would assume the same results. If one wants to find exceptional strategic HR linkages, we can. If one wants to find deplorable strategic HR linkages, we can. The most interesting group is the middle one. As business leaders recognize the importance of talent and organizations, they are raising the bar on HR departments, practices, and professionals. Most line managers are recognizing the importance of people and organization for sustained success. They are learning that HR investments today help them succeed tomorrow.

What are ways HR staffs can keep up with developing leaders and improving the company while at the same time having to take the painful (but necessary) steps of job cuts and outplacement?

Ulrich: We have written about the importance of leadership, which is building a depth of leaders throughout the organization, vs. leaders, which is having a qualified individual leader. Many have studied individual leaders and encouraged them to set a direction, execute strategy, manage talent, develop future talent, and demonstrate personal proficiency. That's in addition to having emotional intelligence, acting with integrity, exercising judgment, etc. We agree with this work, but believe that real leadership is building the organization's systems to make sure that leaders exist at all levels of a company. In tough economic times, a leader must continue to invest in future leaders and ensure that they have opportunities to learn and grow to meet the needs of today and tomorrow. Sometimes in tough economic times, a crisis is a terrible thing to waste. Being able to use the crisis as a rationale for removing low performers or making other tough changes is a benefit of the crisis.

Speaking of that tough job, we always talk about the morale of employees, but what about the morale of human resources professionals during a time like this when there are job cuts and more resumes for fewer openings? How do HR professionals prepare and deal with that situation?

Ulrich: We have written about the importance of HR professionals taking care of the caregivers, as well as the leaders and employees they coach. We have suggested that taking care of oneself involves five domains: The first is physical — attending to nutrition, exercise, sleep, and physical space. The second is emotional — managing energy, being resilient, and building on strengths and personal identity. Third is social — having friends both at work and not at work. Fourth is intellectual — having learning agility where one is curious and always learning from successes and failures. The fifth is spiritual — acting based on a strong moral code that anchors decisions in values. When HR professionals do these five things, they take care of themselves. By so doing, they can then take care of others as well.

Any research in progress now?

Ulrich: We are working on three projects that are very exciting.

1. Talent has become a catchall term lately, with innumerable slogans, workshops, and solutions. We are working to capture the top 10 to 12 things that a general manager should know about talent. We call this the talent menu and it can help leaders make informed talent decisions (with Jon Younger, Wayne Brockbank, Allan Freed).

2. Abundance. The economic recession has mirrored a psychological recession where people have lost a sense of meaning in their personal lives. We believe that leaders can help employees find meaning through building abundant organizations. We have identified eight things that leaders do to create abundant organizations to replace deficit thinking and action (with Wendy Ulrich).

3. Leadership through the lens of the investor. Most approach the improvement of leadership through HR — learning, development, and coaching — or through line managers who build leaders. We are working to figure out what investors should look for in assessing quality of leadership in a firm. We believe that leadership explains a sizeable portion of shareholder value and, if we can codify and track quality of leadership, this becomes an important investor tool (with Norm Smallwood).

In each of these cases, we are seeing how what happens in an organization creates value for key stakeholders — employees, customers, communities, and investors.