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.