Most large organisations have undergone HR transformation following the classic Ulrich model of HR shared services; however, practitioners who have implemented the structure often highlight teething problems and acknowledge they have some way to go before the role of HR Business Partner is operating as they would like within their organisation.

The Ulrich model of shared services provides a centralised HR administration and operational function to line managers and individuals. Centres of expertise create leading edge HR policies, advice on specific issues and HR Business Partners providing organisation development, change management expertise and a value-adding partnership to the business.

And just as practitioners have found teething problems, if you ask business advisors in the field of HR transformation which organisation is delivering the business partner element of the model they will often struggle to come up with examples.

Are these problems down to how organisations have implemented the Ulrich model or, more potently, is it a flaw in the model on which most organisations have hung their hat?

Our experience of working in the field of HR Transformation since the heady days when the Ulrich model heralded the new era suggests that it’s probably a bit of both. Let’s examine the facets of the issue.

Exploring the implementation issues
In terms of implementation there are a series of interrelated issues. Perhaps the most frequently cited is the problem of line managers not taking responsibility for day-to-day people management that enables HR to focus on more strategic issues.

This is exacerbated by the fact that a high proportion of HR transformation is, to a large degree, HR led even where there is a cost reduction driver from on high. This means line managers whose behaviours the function is seeking to change, often don’t welcome the new way of working that results from a restructuring of the HR function.

A very common issue arising from function-led HR change is a lack of focus on the business outcomes that are expected from a transformation programme.

There can be too much focus on cost reduction and service improvements – “Our ratios will be down to 1:120, we’ll be able to recruit faster,” – rather than on driving out clarity on what the business outcomes should and will be.

Compare this with a business-led change such as applying lean manufacturing principles which, when done well, has a clear business impact that provides the common goal for example errors in manufacture to one per million for a mobile phone manufacturer, cycle times reduced from 21 to four days in the case of a European steel company. Very few HR transformation programmes can articulate their business impact with such clarity.

Then there’s the problem of the capabilities and behaviours of individuals appointed into business partner roles. Very often the organisation simply doesn’t have the individuals within it that are a good match to the demanding profile for a business partner.

Individuals who bring new insights to seasoned business managers in terms of answers to the problems they’ve thought of and those they haven’t, then integrate delivery of the resulting interventions within the wider organisational context, are relatively few and far between.

Yet despite this demanding requirement HR generalists are often required to metamorphosise into strategic players and redefine the relationships with their customers almost overnight.

Exploring issues with the Ulrich business model itself
Then there is perhaps the thorniest issue – that of a flaw in the model. There are two issues here. Firstly, the core Ulrich model does not adequately address the components that a business partner needs around prioritising what needs to be delivered across the business and ensuring there is access to key resources such as project delivery, people information and decision support.

The second issue stems from the extent to which large-scale technology implementations have become part and parcel of HR transformation. There is an inherent tension between the drive for standardisation required for successful ERP and shared service centre implementation and the need for specific, tailored business solutions that are essential for the business partner to be credible in the delivery of specific and tangible business outcomes.

Let’s take an example. An organisation has acquired a niche player which needs to be integrated into an existing business unit. The two cultures are at odds but rapid integration is required to gain benefit from the acquisition. The business partner knows that new management behaviours are key to this and the lever to change is the way senior management performance assessment and pay are structured.

There needs to be a new approach that goes outside of the company‘s compensation policy and administrative cycle. The business line wants the change but senior HR colleagues will not support delivery because the specific solution is at odds with the philosophy of standardisation.

How can organisations keen to buck the trend establish effective business partnering roles?
Ulrich’s model still represents the best chance that HR has of repositioning itself and there are ways to overcome the challenges we’ve discussed.

Firstly it is critical to acknowledge that getting line managers to take accountability for people management issues is not going to be achieved overnight, but represents an ongoing process of attitudinal and behavioural change.

The first step is to achieve buy in to a new way of working through effective education and communication. Not theory but practicalities. What’s in it for me? What will I see and feel that is different from before? What is my role in this? These messages also need to be consistent across the organisation even if the methods are tailored to different audiences.

This buy in process must be complimented by appropriate training and reinforced through performance management, remuneration and strong signals from the board down that excellent people management skills are core to being successful in the organisation.

Secondly, there needs to be a demonstrable link between what HR is doing differently and the business results. Rather than being preoccupied with the intricacies of measurement, if a business partner is able to show that their business unit is closer to having the right skills in the right place doing the right things, then that is a good starting point for demonstrating value add.

Moreover, it is even better when they can demonstrate their contribution to establishing the right structures and governance, clear objectives and measurement together with excellent talent and succession management.

Further, there must be a focus on tailored organisation development interventions that become recognised differentiators by business managers and have other colleagues asking how to make it happen, for example in driving the mindset shift required when an organisation shifts its strategy from cost reduction to top line revenue growth.

Thirdly, it is important to recognise that you can’t just give the same people different job titles. There is a real need to bring in new people with a proven track record and give existing staff with the right skills the chance to wear a new hat with a group of people who don’t prefer them in the old one.

Capability assessment exercises are a vital part of any transformation programme to ensure people able to operate in a different way are identified and aligned to the right customer group. You have to accept from the outset that there are likely to be a significant number of people who will not succeed and ensure that expectations are managed accordingly.

It’s also important that developing business partnering capability becomes an on going process in the organisation and to take a long, hard look at the development paths in HR – there must be a business not a functional focus.

It is essential to know what operational knowledge and business skills matter in your organisation and to ensure that is what potential business partners are being developed against in addition to their HR and change skills.

Moreover this skill development should be aligned with business wide management development interventions so programmes are complimentary. Be patient and recognise it will take time to embed a successful programme.

Lastly, some refinements to the core model are also important to enable the business partner to succeed. There needs to be a clear approach to the prioritisation of HR change projects and a simple and transparent process for identifying and allocating resources to work on them.

An HR department that establishes programme office and resource management functions provides two key enablers to helping the business partner discharge their role effectively.

To address the tension between HR shared services and business partners is an organisational rather than a functional issue. Business leaders, coached by the HR leadership team, need to set direction on the right balance between standardisation and customisation given their organisational context.

This can then underpin the thinking on appropriate costs of the function, suitable technologies, policy and process. Most importantly it enables the right governance approach to be developed within the function in terms of the decisions that rest with a business partner versus the shared service centre or centre of expertise.

Focus outwards and ensure that senior business customers are fully involved in the HR transformation process.
The key to successful HR transformation and strong, effective business partners is to focus outwards and ensure that senior business customers are fully involved in the HR transformation process.

Any disconnect with the business and any transformation that is premised on ‘HR for HR’s sake’ will not deliver for HR or the business and will result in a progressive degradation of the HR business partner role over time.

By Neil McEwen and Kate Spencer, PA Consulting Group