Beyond the Ulrich model – HR in the people-centric organisation
Jon Ingham, November 26, 2019
This second part of a two-part series explores how HR models are finally beginning to develop beyond Ulrich
The Ulrich model has provided a best-practice template for HR organisation design for more than 20 years. During this time there have been numerous suggestions for alternative models, which still all look largely similar to the original Ulrich model. However, given increased focus on innovative business models, it’s possible to see how HR models are also starting to change. The emerging new model incorporates teams, communities and networks, and looks distinctly different to Ulrich’s three-legged stool.
Many HR transformations over the past 20 years have been informed by the archetypal Ulrich model, consisting of centres of expertise, service centres and embedded business partners. Although there have been quite a few attempts to develop a model more appropriate to the knowledge era, most are still based on the same basic three- legged stool, with perhaps a few more legs.
This lack of innovation is a consequence of the way businesses are organised also not having changed much. The design of HR needs to follow the design of the rest of the organisation so if these models have not changed then HR won’t do so either.
However, as I suggested in The Social Organization (Ingham, 2017) and summarised in last month’s Different Slant, we are now seeing moves to build on the traditional, functional, hierarchical design that most businesses have been based on to also incorporate horizontal (process/project/agile) teams, communities and networks.
So what can we expect from the future design of our HR models? As I suggested in an article I co- authored with Dave Ulrich (Ingham and Ulrich, 2016), we expect more use of projects, communities and networks in HR too.
This leads to a new HR network model, shown in the diagram below, with the various groups and networks superimposed on the two-by-two matrix introduced in part one of this piece. The outer ring contains all of the different groups within an organisation and the inner ring contains the associated groups within HR. The hashed shading shows particular roles and business groups supported by HR that may also form part of the broader HR network.
As can be seen, an HR network organisation will be much more complex than the archetypal three-legged stool. The boundary separating HR from the rest of the business will become much more blurred.
Even as HR and the rest of the business increasingly use other types of organisation, it will still be relevant to use functional centres for some aspects of HR.
In particular, given the growing importance of people, it makes sense to have a functional centre focused on people strategy. It is also likely that responsibility for maintaining the organisation model be formalised within another functional group to maintain tight control of this important asset.
These two centres could be linked to broader business groups leading the overall business strategy, and other business assets such as financial investments, property, knowledge and technology.
Much of the work of existing service centres will be taken on by automation, AI, chatbots, apps, and by employees and managers themselves, often with the help of support communities or networks. There may still be a need for service advisors and perhaps local employee relations advisors too.
However, it is no longer necessary to bring all these activities and people together in a physical service centre. It is therefore more likely that activities will be co-ordinated and enabled using digital platforms, supported by greater use of analytics and a focus on employee experience. A new HR platform group will focus on the management of these platforms, often providing tailored approaches to different parts of a business through the use of varied service levels and linked internal charge rates. Increasingly the centre will also be integrated with other central services (finance, procurement, IT, etc.) across the business.
HR project teams
Many HR organisations are bringing together people with different specialisms to act on often complex and cross-disciplinary challenges. The increasing projectisation of HR has already been noted by Dave Ulrich and it is likely that more HR work will be undertaken through projects in future.
These projects can take place within HR for people and organisation work, although they may involve staff from outside HR. Alternatively, they can sit in the rest of the business, with HR contributing to a broader agenda that includes a focus on people.
This shift is likely to mean that HR will need to develop specialist project manager and consultant roles and a separate project management pool, rather than just pulling on staff from functional centres or the other legs of the HR model. Examples of HR organisations using this approach include BBVA (2018) and Vistaprint (Denning, 2018).
HR communities of expertise
HR still needs specialist expertise. But with the rise of gig working much of this can be brought in when necessary rather than being owned by HR. In addition, there is often no need for either these varied contributors or the remaining smaller group of permanent specialists to be pulled together into centres.
Centres are therefore being reborn as communities and these already feature in recommended HR models from both Deloitte and EY (although these are still based largely on the three-legged stool).
Communities help gather people with common interests in less formal ways than centres, harnessing people’s intrinsic motivation. They should include important strategic areas such as organisation design, organisation development, diversity and inclusion, engagement, people analytics and HR technology. They may also be smaller than the centres they replace. For example, there could be a community focusing on employee benefits rather than the broader category of reward. Communities may also extend across broader areas, meeting a growing need to deal with key business topics such as productivity, innovation and customer centricity. (Sparrow, 2014).
Communities can also act as ‘homes’ for project staff when they are not active on projects, and provide a longer-term sense of belonging. This is the type of flexible resource pool arrangement traditionally used by professional services firms, but it replaces bureaucratic functional groups with looser more people-focused communities.
HR networks of change and engagement
Certain things HR does can often be delivered and supported best through networks. For example, lots of change programmes involve change champion networks that promote the change across the organisation. Networks can also be used to maintain existing programmes, often supporting a particular community of expertise. For instance, a recruitment community may set up a hiring manager network or an employee advocate network to link more closely with these broader groups.
One example of an organisation doing this is Vistaprint, which uses an agile champions network to facilitate retrospective reviews and a feedback champions network to train teams on giving and receiving feedback (Denning, 2018).
Most HR networks will consist of more people from the rest of the business than from HR. People from HR may also participate in broader business (non-HR) networks, for example working with IT to help build adoption of a new digital system.
Other roles and responsibilities in the HR network
Most HR practitioners will work in these centres or communities, with most being pulled out to work on projects (though there may be some full-time specialists too). However, HR may also take on new roles and responsibilities relating to the new organisation groups in the rest of the business. People working in these people-oriented roles may all sit within HR.
HR may also add overall oversight of communities and networks to its existing focus on the people working across the organisation.
HR network brokers
A particularly important type of network broker as far as HR is concerned will be the one connecting HR with the rest of the business. It is this new role that really distinguishes the HR network model from other attempts to update the Ulrich model.
Given the increasing need for people centricity, HR business partnering is becoming more important. However, business partner as a job largely disappears. Partnering with the business is still an important activity; but who are we going to partner with? Often there will be too many teams and communities, and they will be too small, self- managing and changeable to partner with.
So business partners will largely be replaced by similar staff working through the organisation’s various networks, connecting people to provide the appropriate support as well as providing some of this themselves.
From research to reality
In the late 1990s the Ulrich model offered a new HR solution to an existing organisational arrangement (functional organisations). It could apply to any organisation of more than a few hundred people trying to balance centralisation with decentralisation.
But this does not mean any organisation meeting these conditions could just copy the model. The Ulrich model was never intended to be a standardised solution and neither the business nor HR should copy a standardised solution (whether this is holacracy, the Ulrich model, the HR network model...) Instead HR should identify a best fit response to its own objectives.
The key drivers for organisational transformation should always be the required people and organisational outcomes, organisation principles, and employee expectations (Ingham, 2019). The key drivers for HR transformation should be HR’s own organisational outcomes (e.g. its effectiveness as a strategic partner) required to support and inform the business; its own principles, cascaded from those of the organisation; and the expectations of HR practitioners and others working within the HR network. Therefore, it is generally only when a company becomes a network organisation that HR needs to become networked too.
But it will still be useful to keep this model in mind when undertaking HR transformation. Doing this will help ensure HR groups are designed for the future rather than just the needs of today. And while it may not be appropriate to implement the full network model, there may still be opportunities for using project teams and communities rather than centres. This will ensure that HR moves in a direction potentially most relevant in future.
Jon Ingham is a former international HR director who now works as a strategic OD consultant, researcher, trainer, speaker and writer
This piece appears in the November 2019 print issue. Subscribe today to have all our latest articles delivered right to your desk