BAE Article at HRM

T
he business dynamics to which the

HR field must respond and con-
tribute are increasingly turbulent (Ul-
rich & Brockbank, 2005). HR depart-
ments that aspire to make unique
and valuable contributions within the con-
text of these changes must adapt their de-
partmental capabilities and the competen-
cies of their HR professionals to the
dynamics that influence the human side of
the business. Many companies are recogniz-
ing this trend and are undertaking initia-
tives to enhance the knowledge and abilities
of their HR professionals.
The purpose of this article is to analyze
a case of an HR developmental initiative
that sought to amplify HR professionals as-
pirations to add greater value, impart
knowledge of high-impact concepts and
tools, apply knowledge through real-world
projects, and measure results based on in-
ternal customer feedback. The case we pres-
ent comes from BAE Systems, which has
made an intensive and extensive effort to
build an HR function that delivers measur-
able and high-impact business results. This
case is useful because it illustrates how
those who wish to develop HR profession-
als can apply general criteria regarding
which competencies enable HR profession-
als to have the greatest impact on business
performance (Ulrich & Brockbank, 2003
THE DEVELOPMENT OF
STRATEGIC HUMAN RESOURCE
PROFESSIONALS AT BAE SYSTEMS
RYAN W. QUI NN AND WAYNE BROCKBANK
Dynamic trends in the external business environment, in the challenges that
companies face, and in the nature of HR itself demand that HR departments
develop new capabilities and that HR professionals develop new competen-
cies. This article examines BAE Systems (U.K.) as a detailed case study of a
company that understands the demand for greater HR contribution to busi-
ness value. BAE Systems acted on that understanding by providing a com-
prehensive HR professional development program to enhance the compe-
tencies of its HR professionals in order to encourage better business
performance. Pre- and postprogram measures and extensive qualitative in-
terviews about HRs impact on business performance evidences the effec-
tiveness of this comprehensive approach to the development of HR profes-
sional competencies. 2006 Wiley Periodicals, Inc.
Correspondence to: Ryan W. Quinn, Darden Graduate School of Business, University of Virginia, 100 Darden
Boulevard, P.O. Box 6550, Charlottesville, VA 22906-6500, E-mail: quinnr@darden.virginia.edu
Human Resource Management, Fall 2006, Vol. 45, No. 3, Pp. 477494
2006 Wiley Periodicals, Inc.
Published online in Wiley InterScience (www.interscience.wiley.com).
DOI: 10.1002/hrm.20120
478 HUMAN RESOURCE MANAGEMENT, Fall 2006
<ZAQ;1>) to the specific needs and circum-
stances of a particular organization.
Contextual Demands for HR
Development Investments
External business dynamics, internal business
dynamics, and trends in HR en-
courage HR professionals to add
greater value. For example, tech-
nological innovations, the growth
of global merchandise and service
trade relative to global GDP, em-
ployee-related regulations, broader
trends of deregulation, a growing
mandate for workforce productiv-
ity, increasing service-sector jobs,
an increased focus on intangibles
for judging value creation, and
shifting workforce demographics
continually change the nature of
the competitive landscape, requir-
ing HR professionals to adapt or-
ganizations and their members to
meet these competitive demands
(Americas Fortunes, 2004; Karoly
& Panis, 2004; Ulrich & Small-
wood, 2003; World Trade Organi-
zation, 2003).
Deregulation and globalization
expose companies to increased
competition from new market en-
tries that heretofore had been pro-
hibited from competing. HR pro-
fessionals need to ensure that their
companies are capable of respond-
ing both to their customers and to
the competition in order to per-
form effectively in increasingly
nontraditional geographical or
product markets. Frequent merger,
acquisition, restructuring, and out-
sourcing activities require HR pro-
fessionals to see <ZAQ;2> value-
creating opportunities and to
prepare for integration or separation before
contracts are finalized.
Technological imitability requires HR pro-
fessionals to ensure that the right people are in
the right places with the resources they need to
achieve sufficient innovation for continued or-
ganizational survival. Increasing turnover in
senior executive positions may result in new
directions for corporate portfolio composition,
a shifting emphasis on different portions of the
value chain (e.g., from manufacturing to serv-
ice), corporate agendas (e.g., Six Sigma), and
heightened performance expectations (e.g.,
high stock price). As owners demand greater re-
turn on their investments, companies are
under pressure to make the corporate whole
worth more than the sum of the parts (Ulrich,
Kerr, & Ashkenas, 2002). These changes each
require HR professionals to increase their per-
sonal aspirations and relevant skills.
HR has been shifting its locus of activity
and impact from transactional to transfor-
mational (Brockbank, 1999). Indications of
this shift can be found in the aspirational vo-
cabulary for the HR field. Seldom does a
major HR conference occur without a session
addressing the issue of HR as business part-
ner, business player, or business contributor.
This vocabulary shift is supported by empiri-
cal research that shows a decrease in HRs
focus on operational HR and an increase in
strategic HR work (Brockbank, 1999).
As with every business activity, HR is sub-
ject to the requirement of greater return for
capital invested. To provide greater return, the
HR field has moved aggressively to reduce low
value-added HR work through outsourcing,
automation, reengineering, elimination, and
deflection (i.e., to line management). When
low value-added work is reduced, major ques-
tions assert themselves: What are high value-
added agendas for the remaining HR profes-
sionals? Do HR professionals have the
personal competencies and collective capabil-
ities to design and implement increasingly
ambitious agendas around advocating for em-
ployees, developing human capital, providing
exceptional functional expertise, and strategic
partners, and intellectual leaders (Ulrich &
Brockbank, 2005)? How can these competen-
cies and capabilities be developed?
Criteria for HR Development
Investments
Given the general business and specific HR
trends prevalent today, we suggest that HR
What are high value-
added agendas for
HR professionals?
Do HR professionals
have the personal
competencies and
collective
capabilities to design
and implement
increasingly
ambitious agendas
around advocating
for employees,
developing human
capital, providing
exceptional
functional expertise,
and strategic
partners, and
intellectual leaders?
Human Resource Management DOI: 10.1002/hrm
The Development of Strategic Human Resource Professionals at BAE Systems 479
professional development interventions
should meet three criteria to be of optimal
value:
1. Raise the aspirations of HR professionals
to add greater value to the business;
2. Develop HR professional competencies
that have greatest impact on business
performance; and
3. Provide the opportunity to apply con-
cepts, research, and tools in the context
of raised aspirations.
Raise Aspirations of HR
Professionals
Organizations that have powerful visions of
their relevance for customers, shareholders,
and society are more likely to create sustain-
able and supernormal returns (Collins & Por-
ras, 1994). This includes HR departments
and HR professionals. In order to fully lever-
age the competencies of HR professionals, a
developmental initiative should provide a
powerful and credible vision of HR. The vi-
sion must convey the message that HR has
the potential to deliver clearly identifiable
business results and that HR professionals are
in a profession in which ones career may
grow and prosper (Huselid, Becker, & Beatty,
2005).
HR has the potential to add value in re-
sponse to every major business trend. A suc-
cessful HR development program should em-
phasize these trends, the ways in which
these trends affect business strategy develop-
ment, and the practices through which HR
professionals can equip their organizations
to adapt to these trends. Primacy should be
given to those practices that have been
shown, empirically, to enhance business per-
formance. HR professionals must always
keep in mind that to be full business con-
tributors, they must create value for key ex-
ternal stakeholders. Economic organizations
do not exist for their own sake; they must
create value for customers or customers will
put them out of business. A business-focused
development program for HR professionals
will emphasize these fundamental principles
and implications.
HR professional development should
focus HR professionals on business in gen-
eral, and in particular, on the human side of
business where HR has centralbut not
soleresponsibility. In the same way that fi-
nance has responsibility for the intellectual
agenda around finance, for translating that
agenda into the first draft of the financial
strategy, and for bringing that strategy to the
management team for approval and execu-
tion, HR has responsibility for the intellec-
tual agenda around people, for translating
that agenda into the first draft of the people
strategy, and for bringing that
strategy to management for ap-
proval and execution. That HR
professionals should be the clear-
est thinkers in the company
about current concepts, research,
and best practices about people
and organization is a central idea
that an HR development program
should convey.
HR professionals, then,
should envision themselves as
contributors to their firms com-
petitive advantage. If product development
professionals do not develop products and
services that customers will buy, their work is
irrelevant to the company. In a similar man-
ner, HR professionals should also know how
their activities contribute to customers buy-
ing products or services and shareholders
providing capital. An effective HR develop-
ment program will instill in its participants a
vision of HR professionals as creators of com-
petitive advantage that meets the value re-
quirements of customers and investors.
Develop HR Competencies That
Contribute Most to Business Results
There is more knowledge in the HR field
than can be effectively conveyed and inter-
nalized in a single HR development program.
A pervasive problem in HR development is
that many HR departments, consulting
firms, and academicians develop compe-
tency models based on the question What
are the competencies of HR professionals?
rather than What are the competencies of
HR has the potential
to add value in
response to every
major business
trend.
HR professionals that have greatest impact
on business performance? Given the limita-
tions of time and money, it is important to
focus HR developmental initiatives on creat-
ing the HR competencies that add greatest
value to short- and long-term business per-
formance. We can use the results of the
Human Resource Competency Study from
the Ross School of Business at the University
of Michigan (Brockbank & Ulrich, 2003) to
answer this latter question and to guide de-
cisions regarding what content should be in-
cluded in HR professional training.
1
The competencies identified in the
Human Resource Competency Study that con-
tribute most to business results (as illustrated
in Figure 1 and Table I) are strategic contribu-
tion (i.e., managing the culture, fast change,
involvement in business decision making, and
creating an organization that is unified around
market demands), personal credibility (i.e.,
keeping ones word, performing error-free
work, exhibiting effective interpersonal skills,
and communicating via written and verbal
media), HR delivery (i.e., staffing, training and
development, organization design, and per-
formance management), and business knowl-
edge (i.e., finance, marketing, supply-chain
management, manufacturing, logistics, cus-
tomers, competitors, capital markets, global-
ization, and information technology). The ef-
fect of HR technology (i.e., leveraging
knowledge-management technology, using
eHR to deliver services, designing Internet and
intranet HR services, and using rigorous data
analysis for HR decisions) on business per-
formance is not statistically significant.
The effectiveness with which HR profes-
sionals exhibit these competencies, however,
does not tend to mirror their importance to
business results. As Table I reveals, HR profes-
sionals are most effective at establishing cred-
ibility, but this competency has limited influ-
ence on business performance. On the other
hand, even though strategic contribution has
the greatest impact on business performance,
it is not the competency that HR profession-
als exhibit most effectivelysuggesting that
it may be the most important competency to
develop in HR professionals. The other four
competency factors have relatively less im-
pact on business performance. It may be the
case that these other competencies are foun-
dational to HRs strategic value-added. If HR
professionals do not have them, they will not
have the knowledge and legitimacy required
to make strategic contributions. But they do
not create strategic advantage; they simply
provide the foundation to do so.
Learning Through Application
Learning by doing has long been accepted as
an effective way to create, acquire, and inter-
nalize professional knowledge. Effective devel-
opment of HR professionals should provide
ample opportunity for participants to learn
through the processes of applying obtained
knowledge. It is possible to differentiate four
vehicles for learning through application.
First, classroom application can occur in the
context of case studies, role plays, planning
simulations, and planning for back-home ap-
plication. Second, team-based application ex-
periences are useful to help participants ad-
dress complex issues that require multiple
perspectives and multiple-stakeholder involve-
ment. Third, feedback from peers, coaches,
and consultants in the context of real-time ap-
plication can powerfully enhance the learning
process. Fourth, the capstone component of
an effective HR development program is the
provision for on-the-job application of specific
FIGURE 1. Competency Factors for HR Profession-
als Based on the Human Resource Competency
Study from the Ross School of Business at the
University of Michigan
learnings. Such application projects may focus
on HR-specific challenges (e.g., Define and
implement a new compensation system) or
on general business improvements (e.g., Cre-
ate a process for leveraging synergy across
business units).
Studying Professional HR
Development at BAE Systems
Our analysis of business trends along with
the HR competency research from the Uni-
versity of Michigan suggests that an effective
HR professional development program
should raise the aspirations of HR profes-
sionals, develop HR competencies that con-
tribute to business results, and give HR pro-
fessionals opportunities to apply the
competencies they have learned. However,
even though we can identify criteria that
should be included in HR professional devel-
opment by assessing global business trends
and reviewing current HR literature, the ef-
fective practice (Barnes, 2001) of designing
and delivering development programs re-
quires developers to craft programs that
focus explicitly on business outcomes.
HR leaders and consultants at BAE Sys-
tems developed and implemented an inten-
sive HR professional development program.
We conducted a case study (Eisenhardt,
1989; Yin, 1994) of this HR professional de-
velopment program to examine its design,
delivery, and results. The case method has
been applied in earlier descriptions of HR de-
velopment programs (e.g., Adler & Lawler,
1999; Brockbank, Ulrich, & Beatty, 1999;
Dyer, 1999; Heneman, 1999). This current
article examines how a company develops
HR professionals in-house, in ways that meet
the specific needs of both the company and
the companys HR professionals.
BAE Systems
BAE Systems is a global defense and aerospace
company whose stated mission is to develop
comprehensive defense systems for enabling
countries to establish peace and safety: the
business of protecting those who protect us.
Headquartered in the United Kingdom, it is
an international firm with operations in Eu-
rope, the United States, and throughout the
world. It has annual sales of over 12 billion,
profit before interest of over 1 billion, and
nearly 100,000 employees. There are three
reasons why BAE Systems is an excellent site
for examining the development of HR profes-
sionals: (1) BAE Systems set conscious and ex-
plicit goals to develop its HR professionals; (2)
BAE Systems framed its developmental initia-
tives in response to the external, internal, and
HR trends discussed previously; and (3) one of
the authors was involved in the design and
delivery of the initiative.
Data and Data Collection
To situate our case study in its cultural and
historical context, we used a collaborative
Competency Category HR Effectiveness Percent of Business
(1 = low; 5 = high) Performance
(Column 1) (Column 2)
Strategic Contribution 3.65 43%
Personal Credibility 4.13 23%
HR Delivery 3.69 18%
Business Knowledge 3.44 11%
HR Technology 3.02 5%
Source: Brockbank and Ulrich (2003).
T A B L E I Relationship of HR Competency Factors to HR Effectiveness and Business Performance
approach for collecting and interpreting
data. One author was an insidera consult-
ant-trainer who participated in the design
and delivery of the development program
and kept notes while doing so
(Lofland & Lofland, 1995)and
the other was an outsideran in-
dependent researcher who did
not participate in any of the
training or work of BAE Systems
but focused entirely on data col-
lection, analysis, and evaluation.
Such inside/outside approaches
generally yield a more complete
description of the intervention
(Bartunek, 1993, p. 1221).
The independent researcher
conducted over 20 semistructured
interviews with a cross-section of
BAE Systems corporate execu-
tives, program designers, and pro-
gram participants, and also col-
lected corporate archival data
concerning the design and deliv-
ery of the program. The goal of
these interviews was to under-
stand how business pressures af-
fected demands for and decisions
made in HR professional develop-
ment, how the program was de-
signed and delivered, and how
the developmental activities were
related to improving HR profes-
sional competencies and business
results.
Analysis
We reviewed hundreds of pages
of archived documents detailing
the development of the program
from its inception to its current status, in-
cluding proposals, requests for proposals, e-
mail exchanges, PowerPoint presentations,
internal documents, assessments of partici-
pants, descriptions of outsourcing arrange-
ments, and so forth. We created an outline
of key events in the background, design,
delivery, and results of the development
program. We then returned the outline
back to key people involved in the design
and development of the program so that it
could be checked for accuracy. Alternating
between our insider and outsider perspec-
tives, we developed an historical account
and explanation for how events unfolded
by comparing notes, inducing and cri-
tiquing concepts, and refining emerging
insights (Yin, 1994).
The Story of the BAE Systems
Strategic HR Program
Organizational and Functional
Redesign
The circumstances that gave impetus for BAE
Systems to train its HR professionals began
in the late 1990s. In November 1999, British
Aerospace and Marconi Electronic Systems
merged in order to create a more completely
integrated systems business for the defense
industry. In addition to the strategic and op-
erational synergies prompted by the merger,
executives at British Aerospace and Marconi
Electronic Systems believed that they could
achieve extensive cost savingsin part by
creating shared services and eliminating re-
dundant elements from the combined or-
ganization. BAE Systems created synergy de-
livery teams to achieve cost savings from the
merger. One synergy delivery team consisted
of HR professionals who were charged with
eliminating redundancy and decreasing lay-
ers of management through organizational
restructure. As they proceeded with this task,
the need to redesign the HR function itself
became apparent. The executives responsible
for redesigning HR decided that the HR re-
structuring should:
eliminate and streamline HR processes;
bring commonality to the diverse and
disparate HR policies, structures, and
processes throughout the organization;
create a single, unified information tech-
nology system for HR to replace the di-
verse and unrelated legacy systems; and
increase the value added by each HR em-
ployee (in part by bringing the existing
ratio of one HR staff member per 75 em-
ployees to the benchmark ratio of 1:125).
The executives
responsible for
redesigning HR
decided that the HR
restructuring should:
streamline HR
processes;
bring commonality
to the diverse and
disparate HR
policies, structures,
and processes;
create a single,
unified information
technology system
for HR; and
increase the value
added by each HR
employee.
To meet these goals, managers responsi-
ble for the HR function developed a model
to describe the restructuring of HR. This
model stipulated that approximately 80%
of the employees in HR should be assigned
to a shared services organization to do
transactional (or back office) HR work;
15% of the HR employees would do trans-
formational (or client-facing) HR work;
and 5% of the HR employees would provide
corporate-level expert services (e.g., corpo-
rate strategy development, defining HR
value, and assurance of global implementa-
tion). Managers assigned HR employees to
each of these categories and also began to
develop a way to organize the transactional
shared services organization. They decided
to create a joint venture with a firm called
Xchanging to provide transactional shared
services.
The Need for Higher Value-Added
HR in BAE Systems
During the creation of Xchanging, it became
apparent that many of the client-facing HR
professionals had not developed the knowl-
edge and skills that would be necessary to
meet the demands for the higher value-
added HR agendas. The knowledge and ex-
perience of the client-facing HR profession-
als were diverse. Some were able to deal
effectively with different business-unit chal-
lenges, but few were able to handle all of the
challenges well. Some professionals were ex-
perts in traditional HR processes but had
little or no experience in designing and de-
livering HR strategies that were integrated
with the business strategy. Others had train-
ing in organizational change but had little
training in business strategy development.
And others acquired most of their experience
in other business functions, knowing little
about HR. One HR director described the ex-
perience as follows:
. . . the job when I took it was massive;
it was huge . . . Id been doing an HR
role, but nothing like the role that I was
given. And in terms of creating that or-
ganization, I didnt have a clue . . . I
didnt have the tool kit; I didnt have a
skill set in it.
Developing a Competency-Based
Training Program
As corporate HR professionals finalized the
creation of Xchanging, they began to recog-
nize and articulate a need to train the client-
facing HR professionals. As one HR executive
described the situation:
We had some quite senior peo-
ple that when you looked at
their . . . competencies as a
business partner . . . their abil-
ity to fulfill or to meet the com-
petency levels for a rounded
business partner was actually
very narrow . . . And that, I
think, was one of the drivers to
saying, well, were going to
have to put in a significant
amount of development, be-
cause one option might be to
get rid of those people and re-
place them with alternatives.
But the issue is, because they
do have the history and the
knowledge of the organization
and their business, even if
theyre not really sure how the
value flows through it, if you
remove people like that theres
a danger that, you know, short-
term, youll have an adverse
impact. And it may be that, you know,
by developing them we can actually
broaden their horizons.
Leaders in the HR function, then, de-
cided to train the client-facing HR managers,
and BAE Systems HR Director of Resourcing
and Development John Whelan received the
responsibility for their development. Whe-
lan segmented the development needs to
focus specifically on client-facing HR work:
. . . when we moved to the [new HR]
model, we . . . defined what were trans-
actional, administrative-type HR activi-
During the creation
of Xchanging, it
became apparent
that many of the
client-facing HR
professionals had
not developed the
knowledge and
skills that would be
necessary to meet
the demands for the
higher value-added
HR agendas.
ties. And we were able to define fairly
well what were professional services.
But, in many ways, we didnt define as
well as we should have what we meant
[by the client-facing] box.
Whelan needed to define what the objec-
tives and activities of the client-facing HR
professionals would be, and what competen-
cies would need to be developed so that the
HR managers could meet their objectives.
Whelan formed a small team with both
young and experienced HR professionals and
an external consultant.
2
They opted for a
competency-based approach to development
for three primary reasons: (1) competencies
represent an effective link between having
knowledge and skills on one hand and ap-
plying knowledge and skills on the other; (2)
competencies have been found to provide ef-
fective frameworks for professional evalua-
tion and development in many different set-
tings; and (3) extensive work has been done
over the past 20 years in applying compe-
tency frameworks to the HR field.
Whelans team then identified the com-
petencies that client-facing HR professionals
would need, along with the methodologies
for assessing and developing the required
competencies. The team drew on academic
research, consultancy research, benchmark-
ing from other firms, and their own experi-
ence, an internal survey, and workshops
with the consultant to develop an HR com-
petency model that was customized for the
companys client-facing HR professionals. As
Figure 2 shows, these competencies first en-
tailed delivering organizational design and
development and consulting to businesses.
To support the delivery of design, develop-
ment, and consultation, HR professionals
would also need business knowledge,
knowledge of the basic HR functions, an
ability to establish personal credibility, and
the ability to move people and organiza-
tions toward results.
FIGURE 2. Original HR Competency Model for BAE Systems
To elicit their support and feedback, Whe-
lan explained the HR competency model to
key line and HR managers in one-on-one in-
terviews. He explained that the new HR role
was not limited to the traditional activities of
recruiting, disciplining, training, and so forth
in response to requests from line managers,
but also involved development and execu-
tion of the business and HR strategies.
Whelan and his team next began to look
for people to design and deliver the develop-
mental program. They sent out a request for
proposals to leading academicians and con-
sulting firms. They focused on finding pro-
gram providers who would develop a cus-
tomized program that fit the needs and the
desired competencies of BAE Systems, rather
than just deliver a packaged, off-the-shelf
program. Their primary goals for the training
were to:
develop the strategic, value-adding capa-
bilities of the client-facing HR profes-
sionals and
shift HR professionals from highly effec-
tive practitioners to strategic professionals.
Whelan and his team received a number
of proposals and had multiple consultants
present their proposals to the team. Whelan
gave two reasons for why they ended up
choosing the second authors consulting
firm. First, he said that the second author
seemed to understand the role that they
were trying to create for HR. The language
he spoke, Whelan explained, kind of res-
onated. He just seemed to talk our lan-
guage. Second, however, was that the sec-
ond authors consulting team challenged
them. Their consulting group convinced
Whelans team that they not only under-
stood the programmatic needs of the com-
pany but also were willing to deliver an ef-
fective customized program. They
challenged us in terms of what we wanted,
Whelan explained. We . . . thought this
would take quite a while and we thought itd
probably be several months over time. [But
they said] we can do it quicker than that and
we can deliver you something on a much
more punchy time scale.
The second author also challenged Whe-
lans team on their customized competency
model, using the empirical research from the
University of Michigan HR Competency Sur-
vey <ZAQ;3> and other relevant research.
This resulted in a modified and final version
of the BAE Systems HR competency model
(see Figure 3). The modified model breaks
the six broad competencies down into sub-
competencies that can be identified and
more easily trained.
In response to time constraints
and the HR Competency Survey
<ZAQ;3> results, the design team
focused the training program
largely on business knowledge,
cultural capabilitybased HR strat-
egy development (from organiza-
tional design and development),
change management, linking HR
to external market requirements,
and business and HR measure-
ment. They wove the other ele-
ments of the model into the pro-
gram where appropriate. Whelans
team then began thinking
through the . . . ways the [busi-
ness] projects [would] workas
the business projects were central
to the program and to participant
development. They decided that
they wanted participants to have
online support during their proj-
ects and requested the consultants
to develop and provide the tech-
nology they needed to give partic-
ipants that support.
All client-facing HR professionals partic-
ipated in the assessment that included a
360-degree assessment using the University
of Michigan HR Competency Survey
<ZAQ;3> and a detailed assessment inter-
view with a Q-Tab Consultant. The purpose
of the assessment was developmental. How-
ever, after reviewing assessment results, a
small number of professionals reached an
agreement with their supervisors that they
would be better off pursuing careers in
transactional HR. Several of these individu-
als decided that they were not a good fit
with the direction the company was headed
Whelan and his
team focused on
finding program
providers who
would develop a
customized program
that fit the needs
and the desired
competencies of
BAE Systems, rather
than just deliver a
packaged, off-the-
shelf program.
and decided to leave. This meant that most,
if not all, of the client-facing professionals
agreed with the decision to focus HR on
strategic issues and had the desire to con-
tribute to HR in a strategic fashion.
The BAE Systems Strategic HR
Program
Whelans team assigned 63 senior HR profes-
sionals into two different tracks of a six-
month training program. A third track was
subsequently added with an additional 22
participants.
Following their assessment, participants
proceeded through the Strategic HR Pro-
gram. This program consisted of six mod-
ules: prework, business and HR strategy de-
velopment, an HR strategy development
application project, organizational capabili-
ties, an HR capability application project,
and HR in the leadership role. Each module
was supported by an e-learning environment
that provided online summaries of program
materials, tools for application, and a chat
room for continual peer support.
Prework
The client-facing HR professionals who
came to the development program were re-
quired to read a set of documents that pro-
vided an overview of the strategic direction
of the company and the defense industry,
including the companys annual report, a re-
cent speech by the companys COO, and
three analysts reports on the defense indus-
try. Participants were also required to engage
in a dialogue with at least three internal line
clients about current and future directions
for their respective businesses, specific
changes they anticipated for their business
units, the capabilities required for future
success, the capabilities needing the most
improvement, and the ways in which the
HR function could add greater value to the
FIGURE 3. BAE Systems HR Competency Model, Updated with Information from the
Michigan Business School HR Competency Survey <ZAQ;3>
business. These activities were required of
participants in order to send them a signal
about what HR professionals would be ex-
pected to know in the future and to help
them begin to understand how HR could be
used to add greater value to their respective
businesses.
Business and HR Strategy Development
With the reading and interviewing complete,
participants arrived for the first four-day
classroom module to learn about business
and HR strategy. The purpose of this module
was to lay the groundwork of strategic
knowledge and practices that HR profession-
als need in order to create and deliver more
powerful, business-driven HR strategies
within BAE Systems unique environment.
Leading thinkers on business strategy, as well
as the BAE Systems director of corporate
strategy, examined current trends in strategy
formulation.
These sessions were followed with train-
ing on topics such as the relevance of human
resource management in todays business en-
vironment; the deliverables, channels, and
competencies of HR in high-performing
companies; the logic and process for inte-
grating HR with the business strategy
through competitive cultural capabilities;
and organizational development consulting
skills. These topics were selected on the basis
of the empirical work on HR competencies
from the University of Michigan (Brockbank
& Ulrich, 2003).
During this first four-day module, partic-
ipants were given extensive exposure to the
process and logic of (a) defining key cultural
capabilities that are required in BAE Sys-
tems specific market and business contexts
and (b) designing and delivering HR prac-
tices that focus on creating business-based
cultural capabilities. As one HR manager
who participated in the program said, this
part of the program was a bit mind-bog-
gling to start off, because it is complex, but
as it developed he began to understand the
business to a much greater extent, and it
challenged him to think and maybe test
your original thinking. Another reported
that the strategy consultants training on
identifying, measuring, and creating value
and tying it to HR was interesting and re-
freshing, but that it became practical for
her when the HR consultant gave them the
logic and language for discussing HRs busi-
ness relevance with line managers and the
specific tools for impacting business strategy
through HR.
Cultural CapabilityBased HR Strategy
Development Application Project
The core of the first classroom
module covered the logic and
process of integrating HR strategy
into the business strategy by cre-
ating and sustaining competitive
cultural capabilities. Following
the first classroom module, par-
ticipants had ten weeks in busi-
ness-unit-based teams to apply an
eight-step process for linking HR
into the business strategy
through the mechanism of cul-
tural capabilities (Brockbank &
Ulrich, 2003, pp. 343344):
1. Define the business unit for
which the HR practices are
being designed.
2. Specify the key trends in the
external business environ-
ment for that business unit.
3. Identify and prioritize the re-
quired sources of competitive
advantage for that unit and determine
the defining metrics for each source of
competitive advantage.
4. Define the required culture (including
specific behaviors) and technical capabil-
ities that are required to create and sup-
port the sources of competitive advan-
tage that were identified in Step 3.
5. Identify the cultural characteristics that
the firm should reduce or eliminate if it
is to optimize its sources of competitive
advantage.
6. Design the HR practices that will have
the greatest impact on creating the de-
sired cultural capabilities.
The core of the first
classroom module
covered the logic
and process of
integrating HR
strategy into the
business strategy by
creating and
sustaining
competitive cultural
capabilities.
7. Establish a detailed action plan for im-
plementing the logic from the preceding
six steps.
8. Specify the means by which the entire
process is to be measured.
By applying these steps in their own or-
ganizations, participants began to develop
the related HR strategy development skills in
a disciplined way. For example,
one participant described the
process for learning how to frame
and communicate management
values and translate these values
into leadership behaviors. As par-
ticipants applied these steps, they
were supported with access to
program files, tools, handouts,
Web links, and discussion boards
in the e-learning space that had
been created for the program. Ad-
ditionally, during the ten weeks
of the first application project,
participant teams received con-
sulting telephone calls from the
program faculty.
Organizational Capabilities
After completing the on-the-job HR strategy
application project, participants reconvened
for the second four-day classroom module.
This module focused on the identification
and creation of key organizational capabili-
ties. The senior HR leadership team selected
key organizational capabilities, which in-
cluded customer-focused organizational
learning, cost-based competitiveness, high-
performance accountability, innovation, col-
laboration and synergy, fast change, and
leveraging talent. In a traditional HR devel-
opment program, the focus would have been
on what HR does (i.e., staffing, performance
management, training and development,
etc.). But, in this case, the BAE Systems pro-
gram focused on what HR delivers (i.e., key
organizational capabilities). This portion of
the program emphasized how each part of
the HR function integrates with other busi-
ness functions (such as marketing, product
design, finance, information systems, and
production) to create and sustain key organi-
zational capabilities. These sessions con-
cluded with an additional session on meas-
uring performance of the human resource
function. These sessions prepared partici-
pants for the second action-learning project.
HR Application Learning Project
Project teams built on what they learned
from their first application project and the
second classroom content module by identi-
fying and executing a second ten-week proj-
ect designed to:
impact business results;
be framed within the context of the busi-
ness strategy;
qualify as a real-time and important HR
challenge that requires short-term atten-
tion;
apply key elements learned in the devel-
opment program; and
be actionable within five months.
Examples of these projects included:
aligning business strategies and talent
management in the Sea Systems busi-
ness;
measuring the impact of HR strategic in-
terventions in Customer Solutions and
Support; and
defining and agreeing on a merger-and-
acquisition process that includes capabil-
ity, culture, people, structure, and leader-
ship qualities; and
measuring the impact of North American
HR processes on collaboration and
change management.
Once again, support was given through
e-learning and consulting calls, but project
teams also had an internal BAE Systems
project sponsor from the senior HR leader-
ship team to help them with this second as-
signment. The sponsor helped them to
learn from the project. For example, one
HR manager described learning the lead
measures rather than the lag measures that
were optimal for her application project
By applying these
steps in their own
organizations,
participants began
to develop the
related HR strategy
development skills
in a disciplined way.
and the competencies that her people
would require to effectively complete the
project.
HR in a Leadership Role
The Strategic HR Development Program
ended with a two-day session on HR profes-
sionals in their role as business leaders. Tra-
ditional HR emphasizes HR in a support role.
The HR professional development interven-
tion at BAE Systems emphasized HR in a
business partner role. This last module ad-
dressed the ways in which HR professionals
could be business leaders, moving beyond
the roles of supporter or partner. A synthesis
of these models was used to develop personal
HR leadership agendas for their respective in-
dividual areas of responsibility.
Program Results
3
Survey and interview data indicate that BAE
Systems HR professional development pro-
gram had a positive and significant effect on
the competencies of HR professionals.
External HR Evaluation Survey
BAE Systems hired an external auditor, Porter
Novelli, to administer a survey on the satis-
faction of internal HR customers at the be-
ginning and end of the HR development pro-
gram. The survey was designed to reflect the
ability of the HR department to add value to
BAE Systems business results. Over the time
span of the HR development intervention,
the results showed marked improvement in
each of the five areas that were examined.
4
(See Table II.)
HRs influence on business decisions and
strategy increased 120%. The early stages
of the intervention focused heavily on
current thinking in business strategy that
was supported by in-depth exposure to
key individuals in the companys strategy
department. The cultural capability HR
strategy development process was the
foundation of the first half of the pro-
gram. This key element of the interven-
tion required a rigorous analysis of the
BAE Systems business environment and
business strategy. It also emphasized the
mandate for HR to focus on a highly con-
densed and core set of business priorities.
This logic was emphasized both in the
classroom and during the first applica-
tion project.
HRs provision of innovative business so-
lutions increased 85%. The program fo-
cused heavily on improving business per-
formance by addressing the issue, What
are the key cultural and technical capa-
bilities required to improve business per-
formance? For six months, the client-
facing HR professionals intensely
examined the alternative paths through
which HR would encourage innovative
business improvements. In addition, in-
novation was one of the key cultural ca-
pabilities that received substantial atten-
tion from several of the HR strategy
application project teams.
HR 2003 HR 2004 Percent Increase
Influencing business decisions and strategy 30% 66% +120%
Providing good general HR advice and support 51% 85% +67%
Understanding key performance indicators 47% 79% +68%
Providing innovative business solutions 33% 61% +85%
Understanding my business and its needs 55% 80% +45%
T A B L E I I
Internal HR Customer Satisfaction Survey Results and Improvement Scores Between 2003
and 2004
HRs understanding of key performance
indicators increased 68%. The eight-step
HR strategy development process re-
quired the specification of key perform-
ance indicators for each source of com-
petitive advantage, followed by
specification of the cultural and techni-
cal capabilities required to impact the
key performance indicators. The HR
strategy sessions carried out as part of the
first application projects involved senior
line executives in examining how HR can
directly influence key performance indi-
cators.
HRs provision of good general HR ad-
vice and support increased 67%.
State-of-the-art HR functional
practices received substantial at-
tention. The program examined
these practices in the context of
the key organizational capabili-
ties that these practices were de-
signed to deliver. Both applica-
tion projects required that the
HR application teams answer
two questions: Which HR prac-
tices are out of alignment with
the targeted organizational ca-
pabilities? and Which of those
HR practices that are out of
alignment would have the great-
est impact if we brought them
into alignment? This exercise
encouraged HR professionals to
examine all HR advice and sup-
port in the context of the capa-
bility deliverables required by
their respective businesses.
HRs understanding of the business and
its needs increased 45%. Every step of the
program reinforced the requirement for
HR professionals to understand and
focus on the business and its needs. Pre-
work required familiarity with analysts
and customers perspectives of the com-
pany as well as those of line manage-
ment. The presenters and faculty concen-
trated on research and best practices
related to the business knowledge that is
most necessary for HR to add the greatest
value to top-line growth. The application
projects were completed in the context
of full understanding of the business and
its needs.
Interviews with Program Participants and
Their Supervisors
1. Virtually all of the interviewed HR pro-
fessionals and their supervisors dis-
cussed the importance of the develop-
mental interventions emphasis on
business strategy, HR strategy, and the
linkages between the two. Their com-
ments mentioned six specific benefits
from the program.
2. It codified their tacit knowledge about
the role of HR into explicit frameworks,
which made their knowledge valid, de-
fensible, and useable. For example, in
one classroom exercise, the instructor
asked participants to imagine a com-
pany gathering in which a bright, in-
formed, and results-oriented senior line
executive or finance professional ap-
proaches them and says, So you are in
HR. We keep giving you folks lots of
money. I just dont get it. I dont know
why we should invest another cent in
HR. The instructor then helped team
members develop a script for what they
would say. This exercise forced them to
make explicit HRs value added in terms
of business logic and language, empiri-
cal research, and state-of the-art HR
concepts.
Participants gained the ability and
desire to discipline themselves to think,
speak, and act more strategically. They
indicated that the program reinforced
their roles in formulating strategy and
thinking of the business first and how
to apply HR expertise within that con-
text. Without this clarity and rein-
forcement, HR professionals had a ten-
dency to drift in and out of doing HR
work in traditional ways, rather than
focusing on work that adds strategic
value.
As one participant stated, We now
constantly remind ourselves, What is it
that were here to do? To make sure that
The presenters and
faculty
concentrated on
research and best
practices related to
the business
knowledge that is
most necessary for
HR to add the
greatest value to
top-line growth.
the HR services . . . improve the perform-
ance of the business. We have to keep re-
membering that. Thats the challenge, to
keep that in front of us all the time. And
another said, I bring myself back all the
time to say, What is it that the [external]
customer wants? What do we need to do
to identify where the customers going?
. . . How do we have to behave to deliver
to that end goal?
Finally, one HR director described a
situation in which business was down
and in which the traditional HR re-
sponse would have been to start plan-
ning for a redundancy program. Partly
because of perspectives gained in the
Strategic HR Program, he instead concen-
trated on creating an organization with
the support of the trade unions to lobby
the government in support of two major
contracts. As a result, his business ob-
tained two contracts worth over 2 bil-
lion. He concluded, And thats what I
think . . . I have brought over the last 12
to 14 months from the [strategic HR] pro-
gram.
3. The program demonstrated a balance be-
tween conceptual richness and tools for
application. Participants frequently ref-
erenced the value of the HR strategy de-
velopment process used in the first appli-
cation project. This tool provided a
disciplined process for enabling HR to
provide its highest value-added contribu-
tion to business performance. Almost all
participants said that they have used the
model since the program, and many
claim to have used it repeatedly.
4. The program made it possible for partici-
pants to enunciate and justify a more
powerful vision of HR in their individual
business units. One HR director shared
how the program helped him to create a
clear explanation of his vision for the HR
function in his business unitsome-
thing he had not been able to do before:
We had [the VP of HR] here last week.
We had . . . the sector-level HR vice
president the week before. I asked my
team members to explain to both of
them what each of them was doing.
And after both had gone, I sat down
with the team and said, Listen to you
guys. We didnt practice beforehand.
Every one of you talked about changes
that youre doing in terms of improv-
ing business performance and your part
of the business. A year ago, thats not
what we would have done.
5. Participants described the program as
having challenged their typical ways of
thinking. On participant explained, You
have ideas and you have be-
liefs and you have philoso-
phies about why things hap-
pen. But if you dont get
challenged, you believe what
you do is the right thing. If
you get the challenge, then
you [have to] sit back and
think about it.
Two aspects of the pro-
gram were frequently men-
tioned as being especially
challenging: (1) the logic and
process for encouraging BAE
Systems business units to
work together as a total sys-
tem so that the organizational
whole would be more valu-
able than the sum of the parts
and (2) the process for shift-
ing HR outcomes from HRs
doables to HRs strategic
value to the business.
6. The program enhanced the
participants ability to con-
tribute to their management
teams. Several managing di-
rectors told stories about their HR direc-
tors enhanced effectiveness as a result of
their participation in the Strategic HR
Development Program. One managing
director said that his HR director guided
the top management team through two
reorganizations involving restructuring,
training, reward/recognition structures,
and collective bargaining. As a result of
such HR interventions, the employees in
this managing directors business now
We now constantly
remind ourselves,
What is it that were
here to do? To make
sure that the HR
services . . . improve
the performance of
the business. We
have to keep
remembering that.
Thats the challenge,
to keep that in front
of us all the time.
ask him during his quarterly review
meetings in the plants, So how are we
doing against profit? This was a big
change from their previous com-
ments along the lines of Were
not very happy because toilets
dont work. The managing direc-
tor stated, We were able to raise
the level of conversation to where
we were engaged in the business.
It feels really good to be part of
that.
Another managing direc-
tor observed, Our HR director fa-
cilitated the integration of teams,
conditions, and working practices
across the business.. . . He was
able to rapidly go through those
issues, so that we had . . . a much
more stable outlook in terms of
the conditions that apply to our
workforce than many other busi-
nesses had. . . Having the HR di-
rector on board and understand-
ing the critical business issues
makes a material business differ-
ence.
Continued Development
Managers throughout BAE Systems consider
that the Strategic HR Development Program
has achieved its goals. As a result, the organ-
ization not only continues to train HR pro-
fessionals in strategic positions, but also is
beginning to implement a similar program
aimed at HR professionals in more junior
programs that target mid-level professionals
and recent college graduates. The intent is to
ensure that the entire HR community is forg-
ing ahead in the same business-focused di-
rection. As BAE Systems completes the train-
ing for its client-facing HR professionals and
begins to provide similar training for HR pro-
fessionals in lower-ranking positions, they
have identified areas for improvement in the
program as well. Four possible improve-
ments have been proposed:
1. The program needs to occur in the con-
text of structural role clarification. Sev-
eral client-facing HR professionals and
their line clients remain unclear on the
full details of the new roles and responsi-
bilities of the client-facing HR profes-
sionals. They suggested more formal and
detailed definitions of the new HR roles
and their evaluation criteria.
2. There needs to be a more explicit linkage
between the 360-degree competency as-
sessments at the beginning of the pro-
gram and each program component.
3. One participant suggested that it would
be useful to have explicit discussions
about how to keep from slipping back
into the old habits of traditional HR.
4. There also needs to be greater emphasis
on how to effectively manage relation-
ships with the outsourced transactional
HR operations in Xchanging.
Summary and Conclusion
The BAE Systems Strategic HR Development
Program is an example of an effective devel-
opmental program. The program occurred in
the context of demands that HR add greater
value to the business. The program was de-
signed and delivered to meet the criteria for
an effective professional development inter-
vention.
The business conditions of BAE Systems
are highly dynamic. On the outside, the de-
fense industries in the United Kingdom and
the United States are becoming more global
and more competitive. Defense technology
is changing at a fast pace. Capital markets
have been increasingly pressuring the com-
pany for greater returns. At the time of this
study, the company recently had gone
through a major merger and was still work-
ing through the cost savings as well as the
synergistic mandates from the investment
community. Its customers were becoming
more demanding, requiring greater integra-
tion and internal synergy. Its HR department
had spun off much of the traditional HR
transactional work into a service center, and
pressures were on the remaining HR profes-
sionals to add greater value to the business.
In this high-demand context for greater
return on HR investments, the BAE Systems
As BAE Systems
completes the
training for its
client-facing HR
professionals and
begins to provide
similar training for
HR professionals in
lower-ranking
positions, they have
identified areas for
improvement in the
program as well.
HR professional development program was
designed to supply higher value-added de-
partmental capabilities and individual HR
professional competencies. The initial phase
of the program focused strongly on raising
the aspirations of HR professionals by pro-
viding a powerful vision of HRs potential as
a central business contributor. It encouraged
detailed discussions on current concepts and
research concerning HRs impact on business
performance; the emerging roles of HR rela-
tive to key external stakeholders; the pri-
macy of HRs responsibility for the human
side of the business; and HRs mandate to
create competitive advantage.
Overall, the program focused on devel-
oping those HR competencies that have been
supported empirically as having the greatest
impact on business performance. The pro-
gram strongly emphasized team-based appli-
cationboth in the classroom and on the
job. Back-home application of key concepts
was a critical element of the program. Fi-
nally, external vendors with no involvement
in the program measured its effectiveness.
These vendors obtained empirical data re-
garding key program elements from internal
line clients along with extensive anecdotal
results from program participants.
Our purpose in this article was twofold.
First, we described the design and delivery of
an HR professional development program in-
tended to increase the capabilities and com-
petencies of an HR department in adding
strategic value to a company. Second, we
evaluated this program based on our knowl-
edge of the most effective content and
process for professional development. By ac-
complishing these goals, we hope the HR
profession will have a better idea of how to
enhance its ability to add greater value to
business results.
RYAN W. QUINN is an assistant professor of leadership and organizational behavior at the
Darden Graduate School of Business at the University of Virginia. He received his PhD
from the University of Michigan. Professor Quinn studies high-impact conversations, ad-
dressing topics such as coordination, change, social practices, energy, flow, power, and
courage. He has published in journals such as Administrative Science Quarterly and
Academy of Management Review and consults on topics related to change management.
WAYNE BROCKBANK is a clinical professor of business at the Ross School of Business
at the University of Michigan, where he serves as the director of the Center for Strategic
HR Leadership and the number-one-rated senior HR executive programs. His research
and consulting focus on linkages between HR and business strategy and emerging high
value-added agendas of the HR profession. He has published widely in Human Resource
Management, Human Resource Planning, and Personnel Administrator. He is a principal
in RBL Consulting (www.rbl.net) and consults in his areas of expertise with major clients
on every continent.
NOTES
1. This current article is not intended to provide an
in-depth review of the Human Resource Compe-
tency Study. For a complete review of this study,
see Brockbank and Ulrich (2003).
2. Kevin Greene, a strategic HR consultant from a
firm named Qtab, is now the chief learning officer
at Royal Mail.
3. The overall program was evaluated by partici-
pants at 4.8 on a five-point scale with 1 = low
and 5 = high.
4. We cannot claim that the relationship between the
program and these results is causal; however,
given that no other major development initiatives
occurred during the same time period, causality is
a strong possibility.
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QUERIES
AQ1: There is no Ulrich & Brockbank (2003) entry in
the References. Should the year here be 2005? Or
should it be Brockbank & Ulrich (2003)? Or should
there be an Ulrich & Brockbank (2003) entry added
to the References? Please advise.
AQ2: Should see be seek?
AQ3: Should Survey be Study, as earlier in the ar-
ticle?
AQ4: I did not find a citation for Fink (2003) citation in
the text. Please add an appropriate citation or
delete this entry.
AQ5: I did not find a citation for Schn (1983) citation
in the text. Please add an appropriate citation or
delete this entry.
AQ6: I did not find a citation for Schn (1990) citation
in the text. Please add an appropriate citation or
delete this entry.

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T

he business dynamics to which the

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