I’ve been working in HR for over 10 years now and for over ten years there is one word which is hunting me “Dave Ulrich”. He is everywhere – sometimes literary sometimes just in his vocabularies, i.e. Business Partner, Centers of Expertise/ Excellence and Shared Service Center. I am not aware of any HR department which is not aligned to or at least utilizing the Dave Ulrich Model as basis for their HR department organization. This is also supported by popular empirical studies – mainly of the consulting industry. Ulrich is everywhere and that means monotony!
Alright, it does make sense that if something works perfectly there is no need to change it. And in those case, monotony has to be accepted. However, there are two questions two be asked, before we really accept that:
1. Is the Ulrich Model with its Business Partners, Centers of Expertise and Shared Services really a success story?
2. And can it still serve its purpose if everyone is utilizing it?
Well, answering these two questions is not easy. In fact, I have dealt with these two questions (and some more) in my dissertation. The results of my (German based) empirical study are not yet published which is why I cannot go too much into the details; but as an HR consultant I have not seen many companies that have implemented the model in all consequences and in a way intended by the creator. Therefore, the results of other popular studies are not surprisingly showing dissatisfaction with the Ulrich model (see here for example).
2. – The meaning and purpose of Ulrich’s idea is often misunderstood. It is utilized to cut costs in HR, to industrialize HR services. But Ulrich had opposite intentions: He wanted to upskill and upvalue HR and its employees. HR should be enabled to deliver value, to play its role in company success – measureable, predictable, comprehensible.
What does Ulrich mean by value proposition? – Well, for Ulrich (and the same is true for me) each and every employee of a company is a critical resource. This understanding is not really new –in fact it dates back to 1959 (Penrose). If you have a look into the recruiting brochures of your companies – almost any company, this understanding is represented there. However, when it counts respectively where it counts (meaning in the HR department), this is only a marketing story. Opposite to these glossy brochures, the main topic of HR in the recent years was cost-cutting and down-sizing, right? Sustainable resource-management (meaning employee-management) is hard to be found. And that is why Ulrich’s idea is not to be found, although his model is used.
Of course, HR departments cost money, and administrative processes like payroll, master data management, learning administration or policy administration do not have a direct positive value proposition to the companies balance sheet (probably a negative effect…). But the calculation is missing out the most important facts – identification of the real value proposition and brining those figures into the calculation is not difficult, it is just different than what HR does today.
And if I see both sides: The management/ HR customers that only see the costs and HR departments with an understanding that does not represent the real value proposition HR brings, then I have to say – sadly – that in the last 15 years no sustainable change was initiated. And as Ulrich said 15 years ago “away with HR” – I have to say “depression ahead”, but still I believe in HRs value proposition and will bring my ideas and comments to you in the coming entries here at chiefHRofficer.de
Chief HR Officer 