This stage of HR’s evolution is about how HR works with other functions to create value.
Dave Ulrich is a household name in HR circles. Back in 1995, he recognized that HR leaders could use the nascent commercial internet to transform their role from recordkeepers and enforcers of corporate policies into something far more strategic: developers of human capital. His work, which became widely known as the Ulrich Model, helped establish talent, culture, and other areas within HR’s bailiwick as central to a company’s’ strategic success, and elevated HR professionals from departmental administrators to important business partners.
Now, Ulrich says AI is ushering in a human-capability revolution. Rather than focus on recruiting, developing, and retaining the right mix of people for today’s jobs, HR’s role will shift to something even more strategic: making sure the workforce, both individuals and as a whole, is always developing the skills, knowledge, and abilities to learn and adapt to a faster-changing world. By cultivating the capabilities that align with a company’s evolving business strategy, HR can have a more direct impact on its performance.
This shift will require a broader, more integrated definition of HR that Ulrich calls “talent + leadership + organization + HR function.” By properly deploying AI, companies will be able to manage those four key aspects of HR as an integrated whole, leading to far more direct and measurable business benefits. By using such a human-capability framework, companies can replace the usual smorgasbord of disconnected programs with an integrated HR strategy that has a significant impact across the enterprise. Whether it’s upskilling employees, training executives in AI, or streamlining organizations to encourage more collaboration, the results will be felt by the stakeholders who matter most, such as customers and investors. Someday, Ulrich has suggested, investors will be able to compare companies by their human-capability metrics, just as they look at financial data, brand rankings, or Net Promoter Scores today.
In a broad-ranging conversation, Ulrich, a longtime professor at the University of Michigan's Ross School of Business and a partner at the consulting firm RBL Group, explains the shift.
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