The Ulrich model

The Ulrich model

Is Ulrich still right?

Does the Ulrich model still have a place? Chris Roebuck, ex head of global talent management, UBS, met the maestro himself to write this special essay. Peter Crush spoke to Ulrich direct

erhaps it is because the HR profession can claim so few true gurus of its own that the discipline has thrown appreciative arms around David Ulrich, professor of business administration at the University of Michigan. The author of more than 20 books, including The HR Value Proposition, Why the Bottom Line ISNT, The HR Scorecard, to name but a few, has found his place in HR folklore. He was named as one of the worlds top five business coaches by Forbes in 2000 and has topped this magazines Most Influential thinker list (see p31), by being the brains behind the three-legged business-partner, shared-service and centres-of-expertise model. So high is the esteem with which the Ulrich model is held that bodies such as the CIPD actually researches just how many HRDs have implemented it (it claims the figure is 30% fully, with more part-implemented). But is the business partner-model HR strives so hard to get to really adding any value? It is my belief that there is a real sense of confusion over the strategic business partner role what it is and whether it is practically possible. I believe people are now saying they have serious doubts about how realistic it is. So, am I and these harbingers of doom who say that the Ulrich model doesnt work right? The concept of HR and the business working in partnership existed long before it was ever termed business partnering. Good HR professionals have always been partners with business. They understand the business and support it in a proactive way even if only delivering transactional services. Being a business partner is about what you do and your relationship with the business, not what you are called. The business partner title was only one outcome of Ulrichs and Wayne Brockbanks research into how HR could add value.
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It is the premise the Ulrich model is built on that is important that businesses can only succeed if HR operates at the centre
David Ulrich, professor of business administration, University of Michigan

I believe there is a real sense of confusion over the business partner role what it is and whether it is practically possible
Chris Roebuck, former head of global talent management, UBS

The real revelation was that strategic HR could contribute significantly to business performance. According to their research, basic HR processes deliver only 18% of business performance, whereas for strategic HR it is 43%. In their 2005 book, The HR Value Proposition, Ulrich and Brockbank set out the steps to enable HR to focus on the strategic opportunities that could be implemented in real organisations. The book even includes checklists to make sure you dont miss anything. The evidence from the real world does show this process works. Indeed RBL, the consultancy led by Ulrich, regularly delivers this transformation successfully for clients globally. An excellent example is their work at BAE Systems where the business partner model was implemented to focus on the delivery of high business impact HR activity. The transactional component was streamlined, the variations in HR activities across the business

According to research, basic HR processes deliver only 18% of business performance, whereas strategic HR delivers 43%
co-ordinated, the HR function aligned to the business structure and the HR teams skills developed to deliver maximum benefit for time invested. According to BAE Systems, influence of HR on business decisions has increased the equivalent of 120%, from 30% to 66%; the view that HR provided good general HR support and advice rose 67% from 51% to 85%; and on whether HR provided innovative business solutions, the score rose 85% from 33% to 61%. HRs understanding of the business rose from 55% to 85%.
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The Ulrich model

So why does it not work for all companies? The conceptual and practical frameworks for business partnering are now about 15 years old although they have been regularly updated. But many people discussing it or implementing it are still working on the old script (before The HR Value Proposition). Often those who have failed to implement did not follow the steps for success it set out: stage one is when the CEO/senior management requires the implementation

The Ulrich model

HR circles, where HR adds maximum value and transforms an organisation. So is this a problem with the model or with HR professionals? In initiating a business partner process there seems to be an overwhelming desire for some HR people to announce that they are doing it. Sadly many line managers dont really care they have too many other things to worry about. Research shows that the final decision for an individual to agree to do something is 80% emotional and only 20% logical, so just selling it on the basis of organisational benefit isnt enough. The individual has to be convinced emotionally that it will benefit them. It is also the case that one of the first steps to successful implementation of the model is for the HR community to fully understand external business realities and the needs of customers. How many in your HR department could answer the questions who are our five most important customers or why do they use us rather than competitors? How many of the organisations that tried to transform but failed did this? There is even an example of one organisation that didnt use any of the steps but just changed the job titles on doors over the weekend to business partner. Surprisingly that didnt work either. However, the tailoring of the transformation concept to the reality of a specific organisation is often a minefield. (See box, left.) The main issue is finding time to break out of the cycle of the transactional firefighting to initiate the transformational. There are also a lot of differing views about the competencies required to be effective in HR. This is because there isnt just one type being delivered. The compensation specialist is not going to be the same kind of person as the operational HR delivery expert out on the business front line. Therefore there is no generic best HR person. It is a range of different job-focused skills underpinned by HR basic competencies and knowledge understanding the business, sound HR knowledge, personal credibility and delivery expertise. A new work by Ulrich, together with Brockbank and Jon Younger, focuses on how the HR organisation should be structured to meet the needs of the 21st century. It confirms that different types of HR have to be delivered by different

Reasons for transformation failures

HR cant break out of the transactional firefighting role and start moving towards a transformational one m Delivery of the transformation takes more than a year to be effective, so there is often no alignment with annual HR or business plans m Launching the project is often so apparently daunting and politically sensitive that no one is prepared to take the first step m The transformation team set up often becomes a committee of pessimists that in the end merely tinker m Implementation is too fast and cuts out key steps m Repeatedly telling the business that an HR transformation is occurring is a waste of time if HR managers dont care or become cynical when nothing seems to change m Value is defined by the receiver not the giver m Failure to get line managers buy-in. None of this will work without line managers. A lot of what could be defined as HR activity is done by them, or should be done by them m Too focused on the strategy at the expense of the transactional. This is a misinterpretation of the concept it was never either transactional or strategic, it was always and. The credibility of HR is based on the delivery of the core transactional HR service to the business at a high-quality level. Only if this is in place will the business accept delivery of strategic HR. Thats clearly stated in the model m Failure to align HR structure with the business structure before starting an implementation. HR is, in effect trying then to align the unalignable
m

How to make Ulrich work

m m m m m m m m

30%: the number of businesses that have implemented the Ulrich model in full
Source: CIPD Changing HR Function survey 2007

m m m

Be in a position to understand external business realities Build relationships with internal and external stakeholders Identify key business needs aligned to external delivery Align the HR /business structure Identify a few key business led HR activities that maximise HR ROI Develop HR strategy to deliver Enhance HR competencies to deliver Meet business need with project approach using all HR areas and business input Start transformation delivery to business engage line managers Monitor and demonstrate success to business Adopt continuous development

There isnt just one type of HR being delivered. Therefore there is no generic best HR person

of some basic processes to deliver development to, or manage, a group of key people; stage two starts when both HR and the CEO realise that the effective development of the performance of the key groups identified in stage one cannot be delivered by HR alone, and stage three is rarely even discussed in

people, and that different organisations need a different ratio of HR components, so analysis of business need and subsequent HR alignment are vital. However, there is a practical issue in a structure driven by roles and responsibilities as this inevitably groups people

into service types. If these people forget the basic principle of being businessdriven, these HR sub-groups often do not communicate. When an HR function starts to think in a subdivided way delivery to the business starts to fail. There are many other academics and HR practitioners across the world publishing work that debates the question of our ability to deliver the best HR, leadership, talent or performance from people. What is truly amazing is that, although these individuals are looking at these issues from differing perspectives and with different objectives, there are substantial commonalities and themes which, when interlinked, set out a strategy for world-class performance. For the HR community, it is true that the HR value proposition works, the business partnership works, transforming HR works. But it is not some overnight, quick fix. It is a complex cultural change for both HR and the line that takes time. To work it needs careful planning and delivery. Missing steps, setting unrealistic deadlines, forcing it on the business, and failing to be business-led all condemn the project to potential failure.

David Ulrich talks about his models relevancy (and basketball) to Peter Crush
It is 5.17am, Utah time, when an email from David Ulrich, HR magazines Most Influential thinker in 2008, pings into my inbox. Its a chipper Hi Peter, looking forward to speaking to you in four hours time? Take care, Dave. Not only does the friendly tone come as a shock, it is the fact that he is already up, toiling away, thinking about how HR can perform better that really impresses. Ive got in my head about half a dozen main issues affecting HR, he says cheerily when we finally speak. Theyre what I think about most of the time so, when I get up, I kinda get excited straight away about how I can come up with the answers. After dealing with other correspondence and collecting his the real me, he quips. To them, Im not some famous management guru which I think is a funny label Im just this lousy old guy whos useless at ball. The banter reveals the far humbler world of Ulrich. I really dont feel that successful, he reveals. I laugh when people think of me as this great thinker. I still feel like a kid, figuring out what I have to say about the world. As far as the Ulrich model is concerned, and his famous three pillars, he is slightly embarrassed, saying it is a bit like having a Beckham model for football, which would be ridiculous, as he is someone who simply plays football. He didnt invent it. Reluctantly, Ulrich says that if the HR community wants to call his writings the Ulrich model, then the author says he is happy with that. But he freely admits the model is no single solution that must be adhered too religiously. He is also quite happy to debate its relevance today: Sometimes I get scared when HR people say they need my model in their business. I say: Whoa, maybe my model doesnt fit your business. If your business is a holding company, then you dont need shared services. So does this mean even he thinks the Ulrich model has lost its lustre? Not so, says its originator. This model is 20 years old, but it began only by asking how HR can make a business be successful. Since that time, I dont think this single concept has become any less important. People say to me that HR shouldnt be business partners. My response is that, in most businesses, the need for knowledge is even greater than ever. The HR bar has been raised. HRDs may require different skills, but the basic idea is the same. According to Ulrich it is not the Ulrich model that is important, but the premise that it is built on that businesses can only succeed when the HR department operates at the centre. He adds: This is highly relevant, and three issues matter even more: the crusade I dont like the word war for talent; getting talent working together in teams; and having unified leadership. The new way forward is how HR continues to deliver more value. This sounds like a sweeping statement, but Ulrich says his latest thinking answers this, and is what he calls the next stage of the Ulrich model branded leadership. The most important idea I have around leadership is that it should not be concerned with individuals, but be part of a bigger system, he explains. It is not about leaders, but leadership. Good leadership should outlast any individual. It is what a leader does that generates a companys values, so the only way to achieve good leadership is by starting with customers first. Transferring the expectations of customers themselves creates good leadership behaviour. It is branded leadership, because it starts from the brand, outside, looking in. Ulrich admits this is a tall order for HR directors to achieve. However, he cites Royal Mail, RBS, BAE and Unilever as excellent proponents of this in the UK. I prefer to be an optimist not a pessimist, he quips. HR professionals must now take stock. When I first wrote about the Ulrich model, the issue was getting to the top table. Now, I feel this is being achieved. What has to change is that now they are there, HRDs must have something useful to say. They need to be credible activists they must have a point of view about the issues that are discussed, and why HR should take ownership of it. HR Competencies, his latest tome, published in March, sets out in more detail some of these thoughts. In its opening chapter, Ulrich warns readers that this is not a book for those afraid of lots of data. But he says he is still searching for that big idea. He says: I want to learn. I want more ideas with impact. The good news is that Ulrich is not about to hang up his thinking cap just yet. Theres so much out there. Talent management, leadership these problems just dont go away, he proselytises. Business agility the new buzzword for change will definitely be the next area that concerns HR gurus. But is there anything left he still has yet to study. Actually yes, he says. Ive had in my head an idea for the past two years, about how to help people find fulfilment in the workplace. I just havent had time to devote the 1,000 hours it takes to write a book. It sounds like Ulrich might need to set his alarm clock even earlier.

thoughts for the day, between his first email and phone call, the professions most influential thinker has, on this particular occasion, temporarily been distracted by other things. He has been busy playing basketball with his neighbours still at 6 am. This is when people see

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