Creating Abundant Organizations

Interview with Dave and Wendy Ulrich

In “The Why of Work: How Great Leaders Build Abundant Organizations” (McGraw-Hill 2010), Dave and Wendy Ulrich set out to help leaders find an understanding of the meaning and purpose of work.

In their article in the November-December 2010 edition of The European Business Review, they discuss their definition and vision of abundant organizations-, which exist when leaders help employees find meaning from the work that they do.

Meaning becomes a multiplier of employee competence and commitment, a lead indicator of customer share, a source of investor confidence, and a factor in ensuring social responsibility in the community.

Their work is based on proven professional techniques and psychological insights, as well as questionnaires, checklists, interviews and case studies.

In this interview with The European Business Review, they focus on the key to establishing a positive work environment and how this impacts the role and functions of HR. It examines HR’s relationship with customer and stakeholders’ expectations and the future of organizational culture.

1. In your opinion, which company qualifies as an Abundant Organisation? Can you describe their dominant characteristics, and tell us how they manage to make money while creating meaning for their people?

Sometimes abundant organizations exist corporate wide; sometimes within divisions of larger companies. Herman Miller, for example, would be an abundant company because even in a down market (office furniture industry declined a lot in the recent recessions), leaders worked to help employees find meaning in the work they did. The purpose of the company is not just office furniture, but a great place to work and live. Employees are frequently involved in creating new ideas and in acting on their mantra of being a company with a caring heart. The best test of whether an organization is ‘abundant’ is to ask both customers and employees how they “feel” about the company. If the answer is about technical products and services, abundance may be low; if the answer is about the passion of the products and services, abundance may be high.

2. What is the key to establish and then sustain a “positive work environment”? Why is this important? What is HR’s role in this?

There are many names for it … culture, work process, DNA, dominant logic, and positive work environment. These are routines or actions people take because it is the ‘way we do things.’ Sometimes these routines are deficit focused and hoarding information, encouraging narcissism, low interactive environments; other routines share information, encourage consensus building and sharing credit, and have physical settings that communicate connection.

3. You talked about aligning HR functions with customer and stakeholder expectations. How to do that?

In recent years, HR has been aligned to business strategy. A strategy is a mirror that reflects how HR practices should be managed. So, we have learned to align HR with strategy. Today and going forward, we see HR shifting from a mirror to a window. The window focuses on what is happening outside the company … customers, investors, regulators, communities, etc. HR should shift from an internal to external focus … we want to be the employer of choice to the employer of choice of employees our customers would chose. Using the customer as the criteria for hiring shifts the game from inside to outside. Similar things could be done for training, compensation, communication, and organization design. When HR aligns with external customer expectations, HR wins.

4. What impact do you see the current financial crisis having on the HR function? How to prevent the next financial crisis, from a HR professional’s point of view?

First, the financial crisis was helpful in pruning badly conceived or delivered HR practices. Trees grow when they are pruned. A number of years ago, an American national park (Yellowstone) had a policy of putting out small fires to protect the park. Then, a major fire occurred because the underbrush was not cleared by small fires. This fire devastated the park and it has taken years to recover. Now, experts in natural resources suggest that small fires are healthy. Recessions can provide health by filtering out bad businesses.

Second, HR has learned that it has to do the basics as well as the strategic. Recession requires that HR does the basic processes well.

Third, the crisis has helped companies learn to build a culture that endures both good times and bad. This enduring culture requires that HR be adapted to the requirements of the company in both good times and bad.

Fourth, by HR looking outside, it can identify weak and leading signals about what might be coming. HR can anticipate the future and bring the future inside the company.

5. How do you see HR developing over the next few years; what are the main trends and challenges you see in play?

HR will continue to need to deliver value, this has not gone away. But the value will need to be connected to things outside the company, not just inside. To deliver this value, HR will need to invest in three areas: [1] individual ability or talent. HR should ensure that the organization has the right people with the right skills in the right jobs (competencies) who work hard (commitment) and who find meaning at work (contribution), [2] organization capability or culture. HR should help shape the organization routines or culture so that they are aligned with customer expectations. [3] leadership. HR work can ensure a supply of future leaders who will drive company success over time.

6. In your opinion, what is the one area of business education in which business schools are in greatest need of improvement? Why?

Business schools are often outstanding reservoirs of knowledge. I have called business schools incredible knowledge warehouses where information is stored and codified. But, knowledge warehouses are empty unless someone is using them. Business schools need to be knowledge networks where people turn knowledge into productivity. Having ideas with impact will make business schools more relevant to today’s economy.

About the authors

Dave Ulrich, PH.D., is a professor of business at the Ross School of Business, University of Michigan, and cofounder of The RBL Group. He has written 23 books that cover topics in HR, leadership, and organization; he serves on the Board of Directors for Herman Miller and the Board of Trustees of Southern Virginia University; and he is a Fellow of the National Academy of Human Resources.

Wendy Ulrich, PH.D., M.B.A., has been a practicing psychologist for over 20 years. She is the founder of Sixteen Stones Center for Growth, which offers seminar-retreats on creating abundance and meaning, and she has authored two books on personal change.

Dave and Wendy Ulrich are the authors of The Why of Work (2010, McGraw Hill).