Evaluating the Ulrich model To what degree is the Ulrich model still relevant today?

Which pillars of the model need to be updated? Have any adjustments been made to the model the past few years? Dave Ulrich: The model was conceptualised to support the HR domain. We wanted to allow HR managers to focus on revenue generated by HR by using the model. However, in the past ten years our findings have undergone a certain change. Today we tend to see 5, rather than 4 important roles put away for HR. Its role as administrative expert has moved on to one of functional expertise. This not only encompasses the efficiency of the HRM department but also relevant and useful experience. The role of employee champion is now split up into 2 roles; human capital developer on the one hand and employee advocate on the other. While the human capital developer focuses on developing talent needed in the future, the employee advocate works for employees currently active in the organisation. In contrast, the roles of strategic partner and change agent are, according to research, growing more and more in the same direction. The role of leader has been added to the model and can be seen as both leading HR as well as introducing leadership in the organisation for future goals. Thus while the initial intention of the model, i.e. concentrating on concrete results realised by HR, has sustained, those HR-results have been susceptible to changes. The new role of leader you assign to HR; did you come across it during your research? Dave Ulrich: Yes. In our HR Competency Study, in which we asked people about what they expected from their HR professionals, leadership was found to be very important. The same came out of interviews with senior HR- and Business-leaders. We did, however, distinguish between the role of leaders, as an identity based on merit, and leadership competencies. We also studied both of these. The Ulrich model is probably one of the most used en misused models in presentations and lectures. Do people use the model correctly and if not, what would you recommend? Dave Ulrich: I worry about the term Ulrich model. After all, a dozen colleagues worked on it with me. One of my biggest fears is that people will apply my earlier work to todays problems while were actually continually adjusting our theories. Another issue is that often the theory is looked at very strictly and criticised from that narrow point of view. At one time we were given the critique that the Ulrich model takes focus away from the employee while thats not the case at all. Our opinion is that HR is BOTH strategic AND concerned with employee welfare. Youll find, however, that some people will just argue something while actually not keeping up to date with current research. Perhaps the model has been made too simple in order to make it easier to remember? Dave Ulrich: Ill plead guilty to that and Ill remain guilty of that sin. I keep finding it important to translate complex theories into something accessible that can be used by everybody. I have a PhD in numerical taxonomy (something nobody understands)

and keep myself busy finding patterns in complex problems. Finding simplicity in complex problems helps people move forward. Sometimes I see complex and abstract theories end up on a bookshelf never to be looked at again. The greatest challenge is to continuously innovate and create on the basis of upcoming business trends. Is there no risk of losing important details when translating complex theories into more simple models? Dave Ulrich: Not when you do it well. I knew a company once which had a very complex strategy including a mission, a vision, sub strategies, goals, objectives and who knows what else. There were about 33 different statements in circulation. Logically then when a mission statement was finally sent out to all 55.000 employees, including a DVD, nobody took anything away from it. Taking those same complex ideas and structuring them around several, carefully chosen themes, will have a much greater effect. I worked with countless companies whose talent management and leadership models were simply too complex. How would you want companies to apply the Ulrich model in their organisation? Is every role in the model as important for every HR-professional? Dave Ulrich: I would work in 6 steps. Step 1: start with the business. Ask yourself the question, what the challenges are facing your organisation. This will provide you with insight into the context the organisation is situated in and the strategy that needs to be followed. Step 2: audit what your companys possibilities are in responding to challenges and carrying out strategies. These possibilities not only form the objectives HR can be assessed upon but are also the companys made points of attraction for investors. Step 3 is to explore how HR needs to be organised in order to exploit these possibilities. There are many options to choose from like embedded HR, centres of expertise, operational HR and service centres. This is the step often taken when were talking about implementing the Ulrich model, but alas this step is often taken in isolation. Step 4: it is necessary to take stock of those HR professionals competencies that can bring added value to the company. This is measuring HR and the competencies they need to demonstrate. In step 5 evaluate which HR practices need to be equalized, integrated or renewed in order to achieve what is needed. Step 6 involves exploring who plays a part in delivering results and what HR and line managers need to do. In conclusion, all steps need to be taken in order for the model to succeed. Jumping from one step to another does not lead to a successful HR change. By limiting oneself to business outsourcing for example, or to the installation of a service centre, theres no real turn around in HR. All steps are needed. Does this imply that we need to implement the Ulrich model throughout the entire organisation from top to bottom and that everyone needs to take on all four roles? Dave Ulrich: What it foremost implies, is that an HR- department needs to be stronger than the individuals within the department. The higher up someone is in the organisation, the more he needs to master all five roles and all six competencies but roles and competencies need to live within the department, not within people. HR as a leader

Research shows that people expect leadership from HR but what does this amount to in practice? Dave Ulrich: Its not difficult to find examples of both strong and weak HR leaders. Actually the 20/60/20-rule can be applied easily here: 20 percent of all HR managers can be rated as being excellent, 20 percent as being very weak and the remaining 60 percent as being somewhere in the middle? In Belgium it seems, we just cant get enough of discussing whether or not the HR manager should or should not participate directly in the board of directors. Is this discussion something you recognise and what is your point of view? Dave Ulrich: HR should play an active role and be a fulltime participant in the board of directors. And is that the case? Dave Ulrich: Again Id like to answer to that with the 20/60/20-rule. Twenty percent of all companies exclude HR from participating in the board of directors. The 20 percent that does include HR on fulltime basis, however, is growing steadily. One of the things I wonder about, now having 20 years of experience in de HR field, is whether HR is perhaps guilty of maintaining the parent /child relationship between employer and employee. Wouldnt it be more efficient to look at this relationship as a relationship between two adults, surpassing the need for many procedures and instruments? Dave Ulrich: Im not completely sure I understand what you re asking. HRpractices are created to bring more discipline to a process. Benchmarking staffing and training is a means to institutionalising our way of dealing with people. The relationship between employer and employee needs to be open and strong but HR practices make that relationship more stable and sustainable. Does the visitor simply not mean that today perhaps too many instruments are being used? Dave Ulrich: Yes its not unusual to see that happening. Often HR-instruments are passed down from one generation to another without updating them. It is indeed necessary to update and streamline HR-instruments. Do you perhaps have an explanation for the phenomenon that while most HR models, claiming the importance of people within a company, originate in the US, Fortune TOP 500-listed companies look at human resources as an expense? Dave Ulrich: First and foremost, one of the things Ive noticed is that not all HRmodels originate in the US. In the 80s a lot could be learned from Japanese management and today a lot of wisdom can be found in India and Europe. Secondly, many of the new HR-models focus both on talent within an organisation and on company culture; its managing both thats the most important. Thirdly, its not always the case that HR is an expense for larger companies by definition but actually

more often an advantage. Again I turn to the 20/60/20-rule: 20 percent of companies use HR as a means to reaching its strategic goals; companies like Nokia, Unilever, IBM and others. Another 20 percent is not completely convinced of HRs value and 60 percent are somewhere in the middle, but even these are moving more in the direction of strategic choice. Mostly, its administrative and transactional work that gets outsourced; work evaluated on the basis of cost rather than on the basis of strategic value. This way companies free up time for more strategic areas. Compare it to the ICT branch where, for example, data centres were outsourced; or to financial departments that outsource their accountancy department. Human Resources is dependant on the grace of the economy. When the economy fares well, HR flourishes; when it slows down, HR efforts get cut back. How do you feel about this proposition? Dave Ulrich: It sounds like someone evaluating HRs right to be. Today HR helps top leaders achieve their goals. This goes for both growing and recessive economies. In growing economies, HR helps develop talent needed for growth. In recessive economies, HR is a force behind cost-efficiency measures. Do CEOs also see it like that? Do they view HR as being useful in difficult times? Dave Ulrich: Yes definitely. IBM, PWC, Towers Perrin and others all recently asked their CEOs about their top priorities. Top five answers included execution of strategy, talent management and development of leadership. CEOs are screaming for insights into how things should be done to support HR professionals. Good HR managers develop an excellent sense of business and have an impact on the business. HR task set The coming ten years, management- and leadership development will become important topics in HR. Where would you say the HR manager needs to focus on within this context? Dave Ulrich: I agree that leadership will become a key topic and research confirms my opinion here. We saw two trends in tomorrows leadership. 1. From leader to leadership. Leaders concentrate on the individual and try to help the individual become a better leader. Leadership revolves around a system of future leaders and leadership as an art. We find that leadership as a pattern is becoming more important than leadership as a person. 2. From the inside and from the outside: often good leadership focuses on the inside of an individual (what can I do and what do I do) and the inside of the company (what do we need.) We suggest that leadership should come from the customers wish. Based on these two themes, we suggested the creation of a brand of leadership that starts with identifying the customers vision of the company brand and related expectations. We aim to match the brand of leadership with the company brand by listening to the external vision customers have about what leaders should know in order to deliver value to the customer. On the basis of the leadership brand standards,

we can deliver leadership that results in creating value. HR has an important role here in working out a development process for future leaders. When you mention customers, does this pertain to internal customers, external customers or both? Dave Ulrich: External. There are internal customers as well but we believe HR should and can concentrate more on external customers. We want to be the best employer for those employees our customers would choose. How do you see the evolution of HR-outsourcing? Which tasks will be outsourced? What trends do you see here? Dave Ulrich: The principle here is that you outsource that which is equal everywhere qua quality and cost. In this case, theres no problem that the seller of the service also works for others within the sector youre active in. Activities that give you a unique advantage in the eyes of the customer, need to be kept in house. If we outsource back office activities like HR administration, costs will go down but the power to innovate will also recede. How do you feel about that? Dave Ulrich: The research I saw into decreasing costs, stated that consolidating and outsourcing administrative work can save up to $1500 - $2000 per employee per year. I dont have any knowledge of figures about the decrepitating innovative powers. Companies that provide outsourcement would probably argue that theres more innovation within that context due to the possibilities created by scale and scope and the possibility of providing both cost- and time efficient and innovative solutions for HR problems. I, however, dont know of any research into this area. The role of HR as change agent One of the things that came out of an interview with Luc Sels (KU Leuven) is that he finds that the role of Change Agent, in the HR task set, coincides more or less with the role of Business Partner and that everyone within a company needs to take up this role. Would you agree with this? Dave Ulrich: Yes and no. In our book HRVP we show that change needs to be accompanied by strategy. Strategy tells us what were reaching for and change helps us get there. Its not possible to take up one and leave behind the other. Our research on competencies (not role) brings change and culture together and is based on data from 10.000 respondents. Our interpretation was that HR professionals who manage change transform things we know into things we do. But HR also needs to manage company culture or bring to life new patterns in the company, based on an external perspective. Our research shows that being a culture- and change agent will be the second most important competency in future HR competency requirements. Besides that, in the past 20 years weve seen that investments in HR have had more of an impact on business achievements in times of change or in changing sectors. Proof again that the world is changing ever faster and that HR professionals will be asked more and more often to manage culture and change. Of course change management isnt restricted exclusively to HR. Line managers are the owners of change while HR

can be seen as its architect, facilitator and designer. Nobody ever said that only HR manages change. Dont you feel the concept change is perhaps a little dated? Change is one of the facts of (company)life and sometimes it seems HR has little to do other than holler behind those changes while other models for dealing with change are being launched? Dave Ulrich: I dont understand theres people out there who say that change is perhaps dated. It rather shows that the skill to anticipate and respond to change is more important than ever. Change is indeed a part of life and thats why only those who can respond adequately, can differentiate themselves from others and have more success. I believe that those who dont want to face that reality are headed straight for failure." Before you talked about streamlining HR instruments. How would you streamline evaluation instruments in the knowledge that generation Y is entering the workforce? Dave Ulrich: That is a nice challenge. Of course the answers differs depending on the company but I find the following process most effective: - Start by defining the 20/80-standard: which 20 percent of behaviour and habit does an employee need to show to meet customer and investor expectations? That also implies that any standard evaluation interview starts by looking at customer expectations translated into what is expected from the employee. Next to that, also define a set of key expectations for employees. - Make people responsible for meeting customer expectations. If those expectations are meaningful, because theyre linked to customers and investors, employees should be motivated to achieve them. - Attach both financial and non-financial consequences. When employees are successful in meeting customer expectations, good things happen to them ; if not the consequences are negative. - Organise feedback sessions helping the employee successfully carry out their job. Generation Y employees often want to be held responsible for their actions and are much more transparent in how they are performing. Put simply, it is necessary to make standards clear, make people responsible for their actions, provide feedback and attach consequences to good and bad results. HR in KMOs You cite a lot of research results but these are mostly situated in larger companies. Belgium, however, is a land of KMOs and were wondering if these rules are also applicable in smaller companies? Dave Ulrich: We conducted the last round of our research on smaller companies but I understand what youre saying. I believe HR professionals in smaller companies think more strategically simply because they have access to the management team. But their means are more limited?

Dave Ulrich: Are you familiar with bumper cars, like on a fair? You get into a small car, on a small terrain and quickly discover that its impossible to finish a route without bumping into others. To me thats kind of a metaphor for smaller companies: HR professionals in a small company are heard much louder in the business, in the customer strategy and in the results. Good HRM has nothing to do with the number of staff but rather with the ability to ask questions, select the right subjects for analyses and design solutions. The same person, doing different tasks, can be very valuable. In Belgian KMOs HR is often seen as administrative staff. How can we adjust that view? Dave Ulrich: Once reached, an image is not easy to change. I think its best to coach HR-people into knowing the business and identifying its top priorities. Further, its necessary to come to a certain point of view about those topics. In smaller businesses that could mean that the person responsible for HR has contact with the customer at least once a month, researches how a company makes its money and helps develop the talent needed to achieve those goals.