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Future of Work:� Emerging Value-Added Assumptions

Dave Ulrich

Rensis Likert Professor, Ross School of Business

University of Michigan; Partner at The RBL Group

dou@umich.edu

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May 14, 2024

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Question for this session

How can I and/or my organization “script the frontier of work” (add value to stakeholders) through human capability?

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Now is the time for human capability

  1. Studies of CEO, senior business leader priorities: Economic uncertainty, technology, people
  2. Conference topics: Agility, culture, mental health, hybrid, leadership
  3. Government reporting as materiality: Requirements to disclose report “human capital”
  4. Board agenda: technology, driving value through values, creating unity, innovation in change
  5. Intangible value: average is 80% of market value or cost of capital (debt)
  6. ESG attention: social citizenship, planet
  7. Employees: burnout, engagement, mental health, productivity

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People, paradox, and possibilities: Human Capability

Environment

Assumptions

  • Technological advances
  • Intangible value
  • Regulatory agenda
  • Economic cycles
  • Demographic changes
  • Emotional malaise
  • ESG attention
  • ??

Future of work

  1. Connect inside to outside
  2. Harness uncertainty
  3. Personalize work
  4. Navigate paradox
  5. Analytics through AI

Human Capability

How to build people and organization (human capability) to respond to environment and assumptions?

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People, paradox, and possibilities: Human Capability

hhh

Environment

Assumptions

  • Technological advances
  • Intangible value
  • Regulatory agenda
  • Economic cycles
  • Demographic changes
  • Emotional malaise
  • ESG attention
  • ??

Future of work

  1. Connect inside to outside
  2. Harness uncertainty
  3. Personalize work
  4. Navigate paradox
  5. Analytics through AI

​

Human Capability

How to build people and organization (human capability) to respond to environment and assumptions?

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Future of Work: Environment Changes

Civil Unrest

Social Change

Political Toxicity

Emotional/Mental Health

Digital Revolution

Economic Conditions

ESG: Climate Change

Context is kingdom:

Content is king (assumptions and

human capability)

Intangibles

Regulation reporting

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People, paradox, and possibilities: Human Capability

hhh

Environment

Assumptions

  • Technological advances
  • Intangible value
  • Regulatory agenda
  • Economic cycles
  • Demographic changes
  • Emotional malaise
  • ESG attention
  • ??

Future of work

  1. Connect inside to outside
  2. Harness uncertainty
  3. Personalize work
  4. Navigate paradox
  5. Analytics through AI

Human Capability

How to build people and organization (human capability) to respond to environment and assumptions?

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Assumption 1: Outside/in

Please select one:

  1. Physical and psychological safety
  2. A sense of belief (meaning, purpose)
  3. An ability to become better (learn, grow)
  4. A feeling of belonging (community, relationships)
  5. All the above
  6. None of the above

What is the most important “thing” that business or HR leaders can give an employee?

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Assumption 1: Outside/in

An organization succeeds in the marketplace

so that

Please select one:

  1. Physical and psychological safety
  2. A sense of belief (meaning, purpose)
  3. An ability to become better (learn, grow)
  4. A feeling of belonging (community, relationships)
  5. All the above
  6. None of the above

What is the most important “thing” that business or HR leaders can give an employee??

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Assumption about Talent/People

Our people are our most important asset

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Assumption about Talent/People

Our people are our most important asset

Our people are our customers’ most important asset

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HR outside in: Evolution of HR

HR Evolution

Time

HR Administrative Utility: Efficiency

HR Strategy: Strategic business success

HR Outside/In: Market results (customer, investor)

HR Functional Expertise: Best practice

so that …

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Human capability and stakeholder value

HR

Professionals

Oversee human capability agenda with primary accountability for leadership

Ensure employee experience through human capability work

Approve and be accountable for human capability efforts

Architect, design, and deliver a human capability agenda that creates value

Human Capability

Initiatives

Improve community reputation

Boards of

Directors

Investors

Customers

Communities

Employees

Senior

Executives

Ensure a long-term positive relationship that leads to share

Intentionally disclose what we do to build confidence

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Assumption 2: Harness uncertainty by finding certainty

False hope

Give up hope

Harness

Uncertainty

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  • Discover certainty in uncertainty
  • Use uncertainty as an inflection point for reinvention, transformation or reimagination

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Finding certainty in uncertainty

What is something you are uncertain about that is causing you stress or anxiety?

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  1. Regardless of what happens, what values are you certain you want to live?

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  • Regardless of what happens, who can you rely on? Who can rely on you?

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  • Regardless of what happens, what are you confident you can/will do?

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  • Regardless of what happens, what are you grateful for that you have experienced already?

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Assumption 3: Identify paradoxes required for success�

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Assumption 3: Identify paradoxes required for success�

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Assumption 4: Personalization

Personalize: Care for each person respecting their individual wants and needs

Personalize: Tailor work setting to the unique needs of each individual (flexibility in who, where, what, and how work is done)

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Assumption 5: Analytics through AI

Intervention (predictive analytics)

Having information about why the best

practices are the best

Impact (guidance)

Having tailored information about stakeholder impact and predicting what will drive results

Insight ( best practice)

Having information about who is going the perceived best work

My organization

0

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Scorecard/Dashboard (benchmark)

Having information to compare to others based in HR scorecards

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Recent Research Human Capability and Stakeholder Value

Study Name

Sample

Focus and Findings

Survey Over 120,000 global respondents over 35 years

  • Organization/business capabilities
  • HR department characteristics
  • HR competencies

Leadership

Code,

Brand,

Capital ,

Sustainability

Survey

  • 9,807 subjects
  • 109,665 raters
  • 100’s of organizations
  • Leadership skills in five domains by level with global norms
  • Leadership brand actions in six steps
  • Changes in leadership behaviors that lead to outcomes over time, pre- and post-COVID

Survey

Over 1,000 organizations

38 human capability initiatives in Talent, Leadership, Organization, and HR and impact on stakeholder value

AI/MP/NLP 5,700 firms reporting SEC data analyzed using machine learning / NLP analysis

Four human capability pathways and impact on financial, employee, and citizenship outcomes (double traditional results) see www.g3humancapability.com

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HC Assessment Flow : �Governance and Guidance for Growth through Human Capability (G3HC) �G3 Human Capability�

Download SEC 10-Ks

ML model to extract human capability text

Score text for 4 pathways

HC dataframe

Build ML models to fit HC data to business outcomes

Revenue per employee, R2=0.45

Tobin’s Q, R2=0.25

EBITDA, R2=0.26, acc=0.90

Social Resp, Fraud R2=0.36, Litigiousness R2=0.48

Human Capability has impact on business outcomes across the SEC

https://www.linkedin.com/pulse/making-progress-human-capability-valuation-dave-ulrich/?published=t

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Evolution of GenAI Applications

Gen AI applications

Time

Assist: AI serves as a reliable assistant, streamlining repetitive administrative tasks and enhancing efficiency through automation and smart recommendations.

Guide:, AI offers specific guidance for individuals and organizations on where to prioritize human capability investments to deliver stakeholder value

Deliver: AI delivers stakeholder value based on real-time analysis to implement, monitor, and improve human capability

Inform: Leveraging vast datasets and sophisticated algorithms, AI informs and offers advice by sourcing and synthesizing information from thought leaders and previous research.

Impact

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Wave 1 and 2: Assist and Inform

QUESTION

ACTIONABLE

INSIGHT

  • Podcasts
  • Interviews
  • Articles
  • Webinars
  • Presentations
  • Research reports

Thought Leadership

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Waves 3 and 4: Guide and Deliver

DIAGNOSTIC

Where to focus?

  • Individual
  • Organization

TAILORED GUIDANCE

How to act to reach my goal

  • Podcasts
  • Interviews
  • Articles
  • Webinars
  • Presentations
  • Research reports

Thought Leadership

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People, paradox, and possibilities: Human Capability

hhh

Environment

Assumptions

  • Technological advances
  • Intangible value
  • Regulatory agenda
  • Economic cycles
  • Demographic changes
  • Emotional malaise
  • ESG attention
  • ??

Future of work

  1. Connect inside to outside
  2. Harness uncertainty
  3. Personalize work
  4. Navigate paradox
  5. Analytics through AI

Human Capability

How to build people and organization (human capability) to respond to environment and assumptions?

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Evolution of HR to �Human Capability

  • Terms and conditions of work
  • Operational excellence
  • Terms and conditions of work
  • Operational excellence
  • Terms and conditions of work
  • Operational excellence
  • Terms and conditions of work
  • Operational excellence

​

  • Design and deliver HR practices
  • Functional excellence

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  • Design and deliver HR practices
  • Functional excellence
  • Design and deliver HR practices
  • Functional excellence
  • Align HR practices with business strategy
  • Deliver individual competence (talent)
  • Align HR practices with business strategy
  • Deliver individual competence (talent)
  1. Create marketplace value (outside-in)
  2. Deliver organization and leadership

PERSONNEL

HUMAN RESOURCES

HUMAN CAPITAL

HUMAN CAPABILITY

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Human Capability Initiatives

Leadership strategy

Assess and develop

Organization priorities

People priorities

Explore possibilities

Paradox of employee and business;

People v. profit

Transform for future of work

Leadership effectiveness

Leverage AI to support workforce; AI and people strategy

Organization Resilience

Using data for decisions

Constant disruption

Employee experience

and engagement

Remote work

Beyond shared services

Harnessing HR

Dynamic employee experience

Collaborative opportunities

Agile organization

Future of work and AI

What are some of the latest “HR initiatives” at WHRC 2024?

Talent Acquisition

ESG

Rebirth of HR function with AI

Revolutionizing DEI

Corporate stewardship

Next gen employees

Managing

incivility

Succession planning

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Science of taxonomy, typology, classification

Menu at restaurant

Visiting a library

Selecting a car

Enrolling in classes

Making investment

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Taxonomy Foundation of ALL Disciplines

Discipline

Taxonomy and Frameworks Used

Biology

Types of living organisms (domain, kingdom, phylum, class, order, family, genus, species: see figure 3)

Information Systems

Types of components (hardware, software, data bases, networks);

Types of information uses (transactions, decision support, enterprise resource planning (ERP))

Medicine or Health Care

Types of diseases, procedures, medications, and services that enable information retrieval, research, and patient care

Sociology

Groups by social stratification (economic, social class, occupation); Demographics (race, gender, education)

Psychology

Big five personality types, psychological disorders (DSM III); Types of therapy (cognitive, psychodynamic, behavioral)

Political science

Types of political systems (democracy, monarchy, totalitarianism); Ideologies (liberal, conservative)

Business

Types of risk (compliance, operations, operational, financial); Customer segmentation, income statement reporting (GAAP)

Human Resources

????

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Overview of Human Capability Taxonomy

HUMAN CAPABILITY

TALENT (HUMAN CAPITAL)

What should your company do to ensure the right individual competence, workforce, or skills?

LEADERSHIP

What should your company to do have the right leaders and shared leadership at all levels?

ORGANIZATION

What should your company do to the have right organization capability, workplace, or team?

    • Today: Most people and organization initiatives and assessments are piecemeal and haphazard
    • Tomorrow: A shared definition of human capability that enables measurable improvements and comparisons across companies

HUMAN RESOURCES (HR)

What should your company do to have the right HR department, practices, metrics, and people ?

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Human Capability 4 Pathways: 38 Initiatives

HUMAN RESOURCES (HR)

  1. Establishing HR reputation
  2. Serving HR customers
  3. Determining HR purpose
  4. Governing HR design
  5. Growing human capability
  6. Using HR analytics
  7. Refining HR practices
  8. Using digital/technology
  9. Advancing HR professionals
  10. Strengthening HR relationships

TALENT (HUMAN CAPITAL)

  1. Acquiring talent
  2. Managing employee performance
  3. Developing employees
  4. Managing employee careers & promotions
  5. Communicating with employees
  6. Encouraging diversity, equity, & inclusion
  7. Retaining the best employees
  8. Managing departing employees
  9. Tracking employee engagement
  10. Creating a positive employee experience

LEADERSHIP

  1. Clarifying the business case for leadership
  2. Defining what leaders know and do
  3. Assessing leaders and leadership
  4. Developing leaders and leadership
  5. Measuring leadership impact
  6. Ensuring reputation

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ORGANIZATION

  1. Hiring, developing, and managing people
  2. Acting with agility
  3. Establishing strategic clarity
  4. Delivering customer centricity
  5. Establishing the right culture
  6. Advancing collaboration
  7. Promoting social responsibility
  8. Expanding innovation
  9. Fostering efficiency
  10. Ensuring accountability
  11. Sharing information/analytics
  12. Leveraging technology

HUMAN CAPABILITY

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Classification of Human Capability Initiatives

Leadership strategy

Assess and develop

Organization priorities

People priorities

Explore possibilities

Paradox of employee and business;

People v. profit

Transform for future of work

Leadership effectiveness

Leverage AI to support workforce; AI and people strategy

Organization Resilience

Using data for decisions

Constant disruption

Employee experience

and engagement

Remote work

Beyond shared services

Harnessing HR

Dynamic employee experience

Collaborative opportunities

Agile organization

Future of work and AI

What are some of the latest “HR initiatives” at WHRC 2024?

Talent Acquisition

ESG

Rebirth of HR function with AI

Revolutionizing DEI

Corporate stewardship

Next gen employees

Managing

incivility

Succession planning

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Question/answer for this session

Environment

Assumptions

  • Understand context (social, technological, economic, political, environmental, demographic trends)
  • Anticipate and add value to external stakeholders

Master future of work assumptions

  1. Connect inside to outside
  2. Harness uncertainty
  3. Personalize work
  4. Navigate paradox
  5. Analytics through AI

Human Capability

  • Offer integrated solutions (human capability)
  • Innovate, invent, imagine possibilities
  • Prioritize actions based on value created

How can I and/or my organization “script the frontier of work” (add value to stakeholders) through human capability?

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HRC2S Round 8 Partner Associations

Round 8

Total # of

Respondents:

28,627

Organizations:

1,013

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HRC2S 2025: The next agenda for HR value creation

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Legacy HR Conversation

Begin with the request for HR process.

Present proposal with recommendations.

Ask for support to implement ideas.

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How HR value added conversation works

Human Capability for Stakeholder Value

Question

Account-ability

Action

Initiative

Domain

Explore how to deliver strategic goals, increase customer share, and improve investor confidence through people and organization

Given our focus on (stakeholder goal), research shows we should invest more to upgrade (name domain) to reach our goals.

Prioritize: Which of the initiatives in the domain has priority

Prepare action plan based on research, we should start by doing _____

Identify metrics to track improvements in action taken and how improvements deliver value to all stakeholders.

De- and pre-brief

Recognize that actions are one initiative with the domain and explore other domains and initiative

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Summary: Human Capability Solutions that Deliver Stakeholder Value

Talent

Why of Work

  • Employee engagement and experience
  • Retaining and removing employee

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Talent Advantage

  • Acquiring right people (S’s)
  • Training (learning solutions)
  • Career development (four stages)
  • Communication
  • Coaching

Leadership Brand

6 steps of building leader differentiators

Leadership Sustainability

7 dimensions of sustaining leadership

Leadership Capital Index

How leaders create market value by intangibles

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Results Based Leadership

Attributes * Results

(so that/because of)

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Leadership Code

5 characteristics of leaders at all levels with focus on front line

  • Acting with agility, change, and speed
  • Expanding innovation
  • Fostering efficiency
  • Ensuring accountability
  • Sharing information/ analytics
  • Leveraging technology
  • Market oriented ecosystem

10 books defining key capabilities

  • Establishing strategic clarity
  • Delivering customer centricity
  • Establishing right culture (outside/in)
  • Advancing collaboration

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6.. Using HR analytics

  1. Reinventing HR practices
  2. Using digital / technology for HR
  3. Upgrading HR professionals
  4. Strengthening HR professionals

14 books on 10 issues

  1. Establishing HR reputation
  2. Serving HR customers
  3. Determining HR purpose
  4. Governing HR design
  5. Growing human capability

Organization

Capability

Leadership

Human

Resources

RBL Thought Leadership

Ideas with Impact

  • Outside in / stakeholder value
  • Human capability

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Final Message

BEST

The

is yet

AHEAD

Human capability

for stakeholder value

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Please contact Darryl Wee�for a copy of the slides.

And follow Dave Ulrich on Linkedin where he posts every Tuesday

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