February 27, 2013

Ulrich model

Not so far ago read couple of articles. In both of them the Ulrich Model was mentioned as a modern and the best known tool that gathers business strategy and leadership together and helps to achieve the former through the later. Both of articles were describing the process how companies came to that decision and adapted their existing corporate structure to Ulrich Model. Basically, both companies, namely, Mars and Nestle came to that model as they realized that their employee surveys were telling them that staff didn't know where company was going, providing the evidence that they didn't have a common culture or vision. So they rebuilt structure, in terms of Nestle – for the whole company, in terms of Mars – for some of their Departments (for example, HR). The approximate structure was (Mars):

  • Business Partners. Operational level - establish relationships with customers and business units;
  • Shared Services. Tactical level - deliver HR services;
  • Centers of Expertise. Strategic level - create HR frameworks.

After finding so many benefits of this model I was very curious about the negative sight and some limitations in its application. When almost every one goes crazy about some new theories the intrinsic resistance appears in myself. So I went straight to literature that were focused on the ways how that model were implemented and how it worked together with leadership. Not so good I have to admit.

  1. Splitting HR into three parts, as Mars example suggests, created boundaries on communication and revealed the lack of joined up thinking (in that case, they applied Ulrich to gather employee and encourage to work as one body but instead got just opposite effect) Additionally, this boundary even could result in open warfare between people in different part of the model – Assumed solution: CONSTANT ROTATION, so that everyone can try themselves in different parts;
  2. The Center of Expertise also was isolated from the business realities – Assumed solution: DELEGATION OF POWERS from business units that might encourage to work and deal with everyday routine problems and gain better knowledge of real situation;
  3. Business partners were often overwhelmed by transactional work so they couldn’t do the strategic element of their work – Assumed solution: SUPPORT FROM CENTER OF EXPERTISE, that focuses on right initiatives prioritization puted as an objectives for HR BP.

Oveall, there many more difficulties in its application but, to my mind, for all of them the solution can be fined and, thus, I think this tool isn’t perfect but still useful and valuable for deploying strategic goals by using leadership.

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