S HOULD WE do away with HR? In recent years,a number of people wbo study and write aboutbusiness-along witb many wbo run busi-

nesses-bave been debating that question. Tbe de-bate arises out of serious and widespread doubtsabout HR's contribution to organizational perfor-mance. And as mucb as I like HR people-I bavebeen working in tbe field as a researcher, professor,and consultant for 20 years -1 must agree that tbereis good reason for HR's beleaguered reputation. Itis often ineffective, incompetent, and costly; in aphrase, it is value sapping. Indeed, if HR were toremain configured as it is today in many companies,I would have to answer tbe question above with aresounding "Yes - abolish the tbing!"

But the trutb is, HR bas never been more neces-sary. The competitive forces tbat managers facetoday and will continue to confront in the futuredemand organizational excellence. Tbe efforts to

achieve such excellence - tbrougb a focus on learn-ing, quality, teamwork, and reengineering-aredriven by tbe way organizations get tbings done andbow they treat tbeir people. Tbose are fundamentalHR issues. To state it plainly: achieving organiza-tional excellence must be tbe work of HR.

Tbe question for senior managers, then, is notShould we do away with HR? but Wbat sbould wedo with HR? The answer is: create an entirely newrole and agenda for the field that focuses it not ontraditional HR activities, sucb as staffing and com-pensation, but on outcomes. HR should not be de-fined by wbat it does but by what it delivers-results that enrich tbe 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 sbould become a partner with seniorand line managers in strategy execution, belping to

124 ARTWORK BY MICHAEL WOLOSCHINOW

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

A NewMandateforHumanResources

move planning from the conference room to tbemarketplace.• Second, it should become an expert in the waywork is organized and executed, delivering admin-istrative efficiency to ensure tbat costs are reducedwhile quality is maintained.• Tbird, 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 tbeir abilityto deliver results.• And finally, HR sbould become an agent of con-tinuous transformation, shaping processes and aculture tbat togetber improve an organization'scapacity for change.

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

HARVARD BUSINESS REVIEW January-February 1998

by Dave Ulrich

policy police and regulatory watchdog. It handlestbe paperwork involved in hiring and firing, man-ages tbe bureaucratic aspects of benefits, and ad-ministers compensation decisions made by otbers.When it is more empowered by senior manage-ment, it migbt oversee recruiting, manage trainingand development programs, or design initiatives toincrease workplace diversity. But the fact remains:tbe activities of HR appear to be-and often are-disconnected from tbe real work of tbe organiza-tion. Tbe new agenda, however, would mean tbatevery one of HR's activities would in some concreteway belp the company better serve its customersor otherwise increase sbarebolder value.

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

125

A NEW MANDATE FOR HUMAN RESOURCES

for botb 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 tbat tbey shouldlead the way in fully integrating HR into tbe com-pany's real work. Indeed, to do so, tbey must becomeHR champions tbemselves. Tbey must acknowl-edge tbat competitive success is a function of orga-nizational excellence. More important, tbey musthold HR accountable for delivering it.

Of course, the line sbould not impose tbe newagenda on tbe HR staff. Rather, operating managersand HR managers must form a partnership toquickly and completely reconceive and reconfiguretbe 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 tbe same: a businessera in wbicb tbe question Shouldwe do away witb HR? will heconsidered utterly ridiculous.

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

Globalization. Gone are the days wben compa-nies created products at home and shipped themabroad "as is." Witb tbe rapid expansion of globalmarkets, managers are struggling to balance tbeparadoxical demand to think globally and actlocally. Tbat imperative requires them to movepeople, ideas, products, and information around tbeworld to meet local needs. Tbey must add new andimportant ingredients to the mix wben makingstrategy: volatile political situations, contentiousglobal trade issues, fluctuating exchange rates, andunfamiliar cultures. Tbey must be more literate inthe ways of international customers, commerce,and competition tban ever before. In short, global-ization requires tbat organizations increase tbeirability to learn and collaborate and to manage di-versity, complexity, and ambiguity.

activitiesappear I o be-and often are-disconnectedfrom tlie realwork of an

ori];anization.

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 sucb yard work, bow-ever, bave largely been realized, and executives willnow have to pay attention to tbe otber part of theprofitability equation: revenue growth.

Tbe drive for revenue growtb, 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. Tbey must alsobecome more market focused-more in touch witbtbe fast cbanging and disparate needs of tbeir cus-tomers. And companies seeking growtb throughmergers, acquisitions, or joint ventures require otb-

er capabilities, sucb as tbe finelyhoned skills needed to integratedifferent organizations' workprocesses and cultures.

Technology. From videocon-ferencing to tbe Internet, tecb-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 wbattechnology offers. Not all tecb-nology adds value. But technol-ogy can and will affect how andwbere work gets done. In thecoming years, managers will

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

Intelleetual Capital. Knowledge bas become adirect competitive advantage for companies sellingideas and relationsbips (think of professional ser-vice, software, and tecbnology-driven companies)and an indirect competitive advantage for all com-panies attempting to differentiate tbemselves byhow they serve customers. Prom now on, success-ful companies will be tbe ones that are tbe most

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

A NEW MANDATE FOR HUMAN RESOURCES

adept at attracting, developing, and retaining indi-viduals who can drive a global organization that isresponsive to hoth 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, manufaeturing, and productfeatures-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 he 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. Tmnot going to argue that HR should make strategy.Strategy is the responsibility of a company's execu-

tive team-of wbich HR is a member. To be full-fledged strategic partners with senior management,bowever, HR executives should impel and guideserious 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

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

Galbraith's star model, for example, identifies fiveessential organizational components: strategy,structure, rewards, processes, and people. The well-known 7-S framework created by MeKinsey 61Company 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

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A NEW MANDATE FOR HUMAN RESOURCES

Strategy implementation and what stands in itsway. They might think only of structure as the dri-ving force hehind actions and decisions, and negleetsystems 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 aceomplished.

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 plumhing and heating infrastructures. The re-sult is a comprehensive set of blueprints that con-tains all the huilding's parts and shows how theywork together.

Next, HR must he accountahle 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 dialogueahout the company's blueprints.

Consider a eompany in which HR defined theorganization'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 ahle toguide a discussion of how to ohtain or develop whatwas missing. [For an example of the questionsasked in this discussion, see the chart "From Archi-tecture to Audit.")

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.

SHARED MIND-SET

COMPETENCE

CONSEQUENCE

GOVERNANCE

CAPACITY

FOR CHANGE

LEADERSHIP

Question

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

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

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)

Descriptionof best practice

Gap betweencompany's curientpractice and bestpractice

128 HARVARD BUSINESS REVIEW January - February 1998

A NEW MANDATE FOR HUMAN RESOURCES

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-performanee, glohal 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 eaeh one ofthese initiatives. Which ones arereally aligned with strategy im-plementation? Which onesshould receive attention imme-diately, and whieh ean wait?Which ones, in short, are trulylinked to business results?

Because beeoming 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 exeeutive 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

Decreasing costsand improvingefficiencvvvill

belp HR becomea partner inexecutini'strategy.

benefits program that employees can manage with-out paperwork; another has used technology toscreen resumes and reduce the cycle time for hiringnew candidates; and a third has created an elec-tronic huUetin 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 tobecome 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 ajoh candidate offering a salary figure with the deci-mal point in the wrong place. (The candidate called

the CEO and joked that shedidn't realize the job would makeher a millionaire.) It was onlyafter 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 aseompanies 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

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A NEW MANDATE FOR HUMAN RESOURCES

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 hetter to customers, toname just three henefits.

In their new role, HR professionals-must he heldaecountahle for ensuring that employees are en-gaged-that they feel committed to the organiza-tion and contrihute 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 stillhe organized, HR's new agenda supersedes them.HR must now take responsibility for orienting andtraining line management ahout the importance ofhigh employee morale and how to achieve it. Inaddition, the new HP, should be the employees'voice in management discussions^ offer employeesopportunities for personal andprofessional growth; and provideresources that help einployeesmeet the demands put on them.

(Orienting and training linemanagement ahout how toachieve high employee moralecan he 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, hut conceptually. For in-stance, HR might inform theline that 82% of employees feeldemoralized hecause of a recent downsizing. That'suseful. But more than that, HR should he responsi-ble for educating the line about the causes of lowemployee morale. For instance, it is generallyagreed hy 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 he considered for certain tasks. Thenew role for HR migbt also involve suggesting thatmore teams be used on some projects or that em-ployees be given more control over their own work

HR must nowtrain line

management inmethods of

achieving highemployeemorale.

schedules. It may mean suggesting that line execu-tives pay attention to the possihility that some em-ployees are being asked to do boring or repetitivework. HR at Baxter Healthcare, for example, identi-fied horing work as a problem and then helped tosolve it hy 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 he 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. Sueb advocacy can-not he invisible. Employees must know that HR istheir voice hefore they will communicate their

opinions to HR managers.Becoming a Change Agent. To

adapt a phrase. Change happens.And the pace of change today,hecause of glohalization, techno-logical innovation, and informa-tion access, is hoth 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 fourthresponsihility the joh 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 glohal 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, dignity, 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

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A NEW MANDATE FOR HUMAN RESOURCES

CHANGE BEGINS BY ASKINGWHO, WHY, WHAT, AND HOW

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

Key Success Factorsfor Change

Leading change(Who is responsible?)

Creating a shared need(Why do it?)

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

Mobilizing commitment(^^0 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 knd 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 differentlyas a result of the change)?

get excited about the results of accomplishing the change?understand how it will henefit 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 miatrix 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, andcommunication?

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?

HARVARD BUSINESS REVIEW January-February 1998 131

A NEW MANDATE FOR HUMAN RESOURCES

PROFILE OF A CHANGE INITIATIVE IN DISTRESSOne company's HR professionals used this chart to help senior managementunderstand why a high-profile diversity initiative was going nowhere.

IOO

LEADINGCHANGE

CREATINGNEED

SHAPINGVISION

MOBILIZINGCOMMITMENT

CHANGINGSYSTEMS ANDSTRUCTURES

MONITORINGPROGRESS

MAKINGCHANGE

LAST

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 sueh a model to their orga-nizations and guide executive teams through i t -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 he arduous, hut it is one ofthe most valuable roles HR can play. As changeagents, HR professionals do not themselves exeeutechange-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 tbe 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 heginning 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 he known for by ourcustomers? and What do we do that is world class in

132 HARVARD BUSINESS REVIEW January-February 1998

A NEW MANDATE FOR HUMAN RESOURCES

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 tbe company's culture changein numerous other ways.' The specific details, how-ever, are not nearly as important as their implica-tions. HR can he the architect of new cultures, hutto 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 forthe Line

The 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 bow 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 Eleetric, 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 ahout 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

When more isexpededoftlieHRfunclion,

a higher qualilv

professionalniiisl be found.

HR professionals in strategy discussions and stateexplicitly that without the coUahoration 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 bya 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 eompanies and ofnew practices that are heing ad-vocated by respected consultants.

Investing in new HR practicesis another way to signal to theorganization that HR is worthyof the company's money andattention. 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. Suchefforts often fail, and at a high emotional cost.Instead, investment in new HR practices shouldfoeus on learning not only what works elsewherehut 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. Toooften, HR departments arc 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

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A NEW MANDATE FOR HUMAN RESOURCES

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 hutneed additional training. Other times, they have tobe brought in from other parts of the company. Instill other cases, they must he 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 husi-ness competitiveness rather than employee com-fort and lead cultural transformation rather than

'consolidate, 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 asincompetent value-sapping support staff. It's timeto destroy that stereotype and unleash HR's fullpotential.

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

Reprint 98111 To order reprints, see the last page of this issue.

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'The difference between the four dollar hunch and the three dollar bunch isthat with the four dollar bunch I make an extra dollar."

134 CARTOON BY P.C. VEY