Modi Institute of Management & Technology

Approved by AICTE, New Delhi & Affiliated to Rajasthan Technical University,

Kota

Book Review
HR FROM THE OUTSIDE IN
Six competencies for the future of human resources

Submitted in partial fulfillment of the requirements for the award of the degree of
Master of Business Administration
(Batch 2022-24)

Submitted By: Janvi Bajaj Submitted To: Mrs. Ramneet Kaur Ma’am
(MBA 3rd Semester)
 ABOUT AUTHOR
Dave Ulrich is a Professor at the University of
Michigan School of Business and a cofounder of
The RBL Group. He has published twelve books
and more than a hundred articles, and has
consulted and done research with over half of the
Fortune 200.
Jon Younger career has been a mix of consulting,
executive management and HR leadership.
Wayne Brockbank is a Clinical Professor of
Business of the Strategic Human Resource
Planning Program at the University of Michigan's
Ross School of Business.
Mike Ulrich

ABOUT THE WORK

Originally published: 26 June 2012
Subject: Business & Economics / Human
Resources & Personnel Management, Business &
HR FROM THE Economics / Management, Business & Economics
/ Training, Business & Economics / Workplace
Culture, Employees, Personnel management

OUTSIDE IN
SIX COMPETENCIES FOR THE FUTURE OF HR
INTRODUCTION

As the research, teaching and practice of HRM continues to respond to and be shaped by
contemporary business advances, Ulrich, Younger, Brockbank and Ulrich propose that a
competency approach provides a ‘leading logic for diagnosing, framing and improving’ the
resulting HR challenges (p. 30). Commencing in 1987, ‘HR from the Outside In’ is the result of
the sixth round of the authors’ Human Resource Competency Study; a global survey of HR
Professionals, Line Managers, Academics and Consultants. Though the authors note many
previous contributions to competency research, they believe this study’s unique 360° view will
enable HR professionals to significantly increase their levels of competence and contribution.
The authors’ ability to distil complex findings through years of experience and translate
compelling evidence into practical guidelines, usable tools and common-sense advice is what
makes this book both relevant and impactful.

Six core competencies have been identified; Strategic Positioner, Credible Activist, Change
Champion, HR Innovator and Integrator, Capability Builder and Technology Proponent. Some
competencies have carried through directly from previous models and others have evolved or
been reshaped. The central message however, as reflected in the book’s title, is that all six are
now strongly underpinned by an ‘Outside-In’ ethos. HRM has moved through three waves from
‘Administrative Excellence’ to ‘Innovative and Integrated Practice’ to the more contemporary
view of ‘Strategic HRM’ whereby direct contribution to organizational performance is achieved
through developing business acumen, enabling business strategy and aligning HRM activities
with the resulting strategic choices (p.19). Today, the authors argue, HRM must move through a
fourth wave - strengthening strategic contribution through more direct and active engagement
with external elements; customers, investors, communities and other stakeholders. As the book
progresses through an exploration of each competency, it provides ideas as to how this ‘outside’
might be brought ‘in’. How these ideas are interpreted will likely depend on the perspective and
experience of the reader; some appear very valuable, some quite manageable, some hugely
aspirational, some questionable. But all are interesting and thought-provoking.

The body of the book devotes a chapter to each competency following a clear and very readable
formula. Firstly, a story or two demonstrating the competency at work in an organization is
shared, secondly, the factors behind each competency and their impact on individual
effectiveness and business performance are explained in full, and finally, some practical tools to
initiate and develop ability in the competency are recommended. Common among all chapters is
the spectrum of potential activities in which HRM may engage. These activities range from the
simple, resource-effective and overtly valuable through to the complex, time-consuming,
expensive and potentially distracting.

A. THE STRATEGIC POSITIONER

No longer is it sufficient to initiate, steer and engage in strategic discussion, HRM should be
proactively positioning the organization to win by; interpreting the global context, decoding the
customer experience and co-crafting the strategic agenda. This can be achieved through simple
efforts such as ensuring financial reports, customer performance data and board meeting
presentations are distributed across the team, HR Business Partners master and share ‘the logic’
of their division, and HR is represented on cross-functional teams. In addition, however, it is
recommended that HRM engage more directly with customers, investors and sector communities
in order to be able to sense customer expectations, investor perceptions and sector futures. Five
per cent of HRM’s time (and, with HRM’s encouragement, 5% of all employees’ time) should be
devoted to direct customer engagement in some form; examples include attending customer
conferences and holding focus groups into customer expectations or investor expectations. In
turn, this insight positions HRM to more fully engage with organizational strategy by asking
more insightful questions, probing alternatives, interpreting potential outcomes and placing
greater emphasis on process and accountability.

B. THE CREDIBLE ACTIVIST

Having evolved from Personal Credibility to Activism, the view is that HR professionals need to
take greater personal initiative across the organization. HRM must earn trust through business
results, display integrity as a role model for the organization values, be more self-aware
regarding skills, approaches and feedback, and strengthen the HR profession. Furthermore, HR
professionals need to be influencers and relate to others by understanding, anticipating and
planning for stakeholder interests. They must be willing to take appropriate risks on behalf of the
organization by promoting discussion around the ‘grey zones’ of the business – some sound
advice is provided on the management of the middle-ground HR professionals inhabit between
corporate headquarters and local sites (p.96). Membership of professional organizations,
networking, sharing insights with colleagues and attendance at HR community events are all
recommended. Taking a SMART approach to HR activities and actively managing team
performance are also advised. However, the underlying message here is that business impact can
only be achieved with an equal focus on credibility and activism. Being a Strategic Positioner
can only be fully realized if those doing the positioning are doing the right thing in the right way
with the right people on board.

C. THE CAPABILITY BUILDER

In this chapter, HRM is presented with a basic outline and practical framework for tackling their
greatest task – ‘creating the right organisation’. The authors refer to previous waves in
organisational effectiveness; efficiencies, bureaucracy, systems thinking and more recently
capabilities. Capabilities are defined as the enduring elements of the organisation; culture, core
processes, competencies and human capital – the ‘distinct organisational atmosphere’ that not
only affects employees but also customers and investors. Once identified, HRM must capitalise
on these capabilities by ensuring a ‘line of sight’ between strategy, culture and individual
behaviours, and creating a meaningful work environment. A practical template for undertaking a
capability audit, a simple step-by-step to guide the process of alignment, and a questionnaire for
assessing ‘abundant organisations’ are provided. This is supported with some sound advice such
as the value of developing short, 90-day projects, always piloted first and then building around
‘virtuous cycles’ of return on investment to create benchmarks of tried and tested initiatives.
Placing the ‘why’ of work front and centre in all organisational capabilities with, of course, HRM
as the ‘role model for meaning’ is highlighted. There is a worthwhile word of warning on
securing leadership and management buy-in up front, the difference between ‘activities’ versus
the more meaningful ‘capabilities’, and the importance of finding measures to navigate and
develop intangible capabilities.
 D. THE CHANGE CHAMPION

As organisations today continue to grapple with continuous change, the consensus here is that
the pace of organisational change should match the pace of change on the outside. The shift in
this competency from previous research centres on HRM’s need to sustain change rather than
just supporting its initiation. Though much of this chapter merely synopsises the broader change
literature, the authors bring some focus to the individual, initiative and organisational levels of
change. At an initiative level the common change approaches are merely listed alongside the
acknowledgement that bridging the ‘know-do gap’ is HRM’s greatest challenge. The greatest
valueadd of this chapter is the focus on creating sustainable change at an institutional level where
it is advised that HRM efforts should be directed towards ‘exposing and confronting’ the hidden
patterns or ‘organisational viruses’ within change. The 36 common ‘viruses’ identified make for
amusing and though-provoking reading; crisis jumping, activity mania, dog and pony shows,
process mania, over measurement and false-positives are just a sample. This reviewer’s
favourite? Fire Hydrant Syndrome: where everyone has to leave their mark on an initiative
before anyone can move on it.

E. THE HR INNOVATOR AND INTEGRATOR

Having previously based competencies around particular HRM activities such as organisational
design or talent management, these elements are now combined into one competency central to
all HRM activities where innovative HR practices must be fully integrated across the
organisation to create a ‘synergistic whole’. It is argued that value is only created when ‘efficacy
meets alignment’ across work force planning, talent development, organisational and
communications practices, performance management and the leadership brand. Most of this
chapter is devoted to a high-level overview of what might be considered best-practice across
each of these HR practices – with of course due attention paid to the role of the ‘outside’ for
each, for example involving customers and investors in determining organisational competencies
or performance standards up to the point of including customer feedback in performance
reviews. The role of context and creating a strong link back to building capabilities is highlighted
with the usual word of warning to HR not to take the latest ‘solution’ and then go in search of a
problem. However, it is the authors insight into the importance of the leadership brand –
composed of a ‘code’ likely common to any organisational leader and then ‘differentiators’ which
are unique to the organisation – that provides for more interesting reading. The view is that
leadership is considered a core capability which should be developed in line with brand-
marketing principles. A template for development is provided with clear steps and a range of
actions for HR professionals and HR leaders.

F. THE TECHNOLOGY PROPONENT

According to the authors, technology today should be a ‘learning and knowledge platform’ which
connects HRM with the outside and assists innovation and integration on the inside. Technology
infrastructure has impacted HRM in many ways in recent years with the advent of employee
databases, work force planning tools, online performance management systems etc. However, the
role of ‘big data’ in HRM is only recently being realised and the challenge, according to the
authors, is HRM’s ability to take data-led insights and turn them into new and innovative
initiatives, for example, allowing employees manage their own rosters online. Interestingly, the
need for a guest author (M.S. Krishnan) on this chapter reinforces the authors’ view that HRM
technology lags behind that of other organisational functions. This chapter does not offer the
level of insight, advice or practice guidelines offered in previous chapters. Even more
interestingly, it is only with this competency that the authors question if it might take HRM
‘away from’ its core activities. The conclusion for this reviewer is that the authors themselves are
not yet wholly competent technology proponents. Ironically it might only be with this
competency that all others can be fully realised. Surely it is only through technology-enabled
access to market information, global-scale employee data, social media, and cost-effective
initiative implementations that we can really bring the outside-in and act on it appropriately?

Critically, HR from the Outside In barely addresses organisational context yet it has been found
to have a significant impact on HRM practices and standards (Belizon et al. 2013; Dainty, 2011).
Research has also highlighted that HR Professionals do not perceive a competency approach to
be as affective in developing or predicting the performance of HR business partners as we might
have been led to believe (Caldwell, 2010). The book however makes for very rewarding and
interesting reading for HR professionals and teachers of Strategic HRM. Though one could
criticize the vignettes on ‘competencies in practice’ which open each chapter for not providing
any rich insight, overall, the authors achieve their goal in providing a solid framework for
diagnosing and improving HRM competencies through their summaries of best-practice, sharing
of experience, advice and practical templates to aid implementation.

To conclude, it is worth reflecting on the authors’ suggestion that HRM should push its
boundaries, taking an even more assertive strategic role in the organisation through in-depth, up-
to-the-minute and even predictive business knowledge. Similarly, it is proposed that customers,
investors and other stakeholders play a formal role in shaping programmes around talent and
performance. For many HR professionals still grappling with existing competency models and
never-ending supplies of business data it begs the question: Is it too soon to physically bring the
outside-in? As each competency unfolds, though empirically founded and worthy each might be,
there is an increasing potential to become overwhelmed by the depth and breadth of behaviours
and activities which are expected from HRM. To heed the authors’ advice regarding the ‘know-
do’ gap, is it wise to further widen this gap before we have enabled those responsible for
successfully bridging it?

DEVELOPING YOURSELF AS AN HR PROFESSIONAL

Human resources skills help HR professionals develop their abilities and become more
competitive job candidates. There are hundreds of potential HR skills to learn, each with its own
purpose and advantage. Understanding how to learn and develop HR abilities can help
professionals advance in their career and gain more competitive skills. In this article, we explain
how to learn HR skills, review six common skills you might pursue and explore how to develop
those them.
5 HUMAN RESOURCE SKILLS TO LEARN

1. PAYROLL ADMINISTRATION: HR professionals with payroll administration skills can

be desirable job candidates. Payroll administration skills can include using payroll
software, understanding how to discuss wages, benefits and bonuses with employees and
releasing funds for payroll. Payroll is an important component of a business because
employee compensation can help ensure they remain productive and motivated.
2. EMPATHY: It can be crucial skill in any workplace because it can help people
understand one another more effectively, which may result in stronger relationships.
Creating professional relationships can help you advance in your career and create a
more positive work environment. Since HR professionals often handle issues like
harassment and payroll, empathy is a core skill for HR professionals to succeed.
3. SOFTWARE: HR professionals use basic software, like computer operating system and
spreadsheets, along with advanced HR software. Having a strong understanding of how
software functions, how to troubleshoot basic issues and what software programs work
for which task can be a crucial skill for HR professionals.
4. TIME MANAGEMENT: HR professionals have strong time management skills because
they often schedule meetings, payroll and other important task for the business.
Managing their time helps ensure each item receives the right amount of attention and
that they issue paychecks on time.
5. SQL: Structured Query Language, is a programming language many professionals
master to advance in their careers. SQL is used for maintaining databases, which is the
core function of many HR professionals. It also helps them to create better security for
employee records, which can provide great value for their employee.
EFFECTIVE HR DEPARTMENT

Tips and Steps for structuring an effective HR department includes:

1. ASSESS COMPANY NEEDS: Identify the unique HR requirements based on your

company’s industry, size, and growth trajectory. Consider short-term and long-term goals
to plan for scalability.
2. DETERMINE ROLES AND RESPONSIBILITIES: Define clear job descriptions for
each HR role, minimizing overlaps. Allocate responsibilities such as recruitment,
training, performance management, compliance, and HR technology management.
3. CENTRALIZATION VS DECENTRALIZATION: Decide whether to centralize HR
functions under a single department or decentralize them across various business units.
Centralization offers consistency and standardization, while decentralization ensures
tailored support.
4. SPECIALIZATION AND CROSS-FUNCTIONALITY: Balance specialized roles
(recruiters, HR business partners) with cross-functional capabilities. Encourage
collaboration between specialized HR teams to ensure a holistic approach.
5. HR TECHNOLOGY INTEGRATION: Leverage HR software and tools for streamlined
processes. Implement an integrated HR management system to handle various functions
like payroll, attendance, and performance management.
6. EMPLOYEE EXPERIENCE FOCUS: Prioritize employee experience by establishing an
HR structure that supports employee well-being, career growth, and work-life balance.
7. TRAINING AND DEVELOPMENT: Allocate resources for ongoing training and
development of HR professionals to keep up with industry trends.
8. FLEXIBILITY AND ADAPTABILITY: Design a structure that can adapt to changes in
the business environment. Allow for adjustments in response to growth, mergers, or shifts
in business strategy.