Archive for December, 2009
The majority of large firms have now introduced Strategic HR as a concept and many have organized their HR function according to the “business partner” model. Some have even changed the job titles – what was once a personnel manager became HR manager and now – for those who follow this model – “an HR business partner”. The well-known author and business professor David Ulrich has been an active promoter of this model.
Most people will be supportive of the basic intention: To align the work of the HR function with the strategic goals of the company and thereby increase the ability of firms to create competitive advantage through people.
At the same time, I would argue that there are several signs that suggest that we should rethink the strategic business partner model.
One sign is simply that most companies are not succeeding: Survey studies are unable to document any increase in the status or influence of the HR function in the average firm (see link below for references to these studies).
Another sign is that companies implement the model in a manner that just increases organizational complexity and blurs responsibility further. For example, in some large and global companies, you now have in effect four “layers” of HR managers: Business unit HR managers, divisional HR managers, HR business partners, and corporate HR managers (some also have internal HR consultants, organized in an internal center of excellence).
Perhaps what we see here is the same tendency as with many other management fashions – companies “adopt” a new model by making some superficial changes (like changing titles and adding a few new roles) rather than implementing the more fundamental and difficult changes that the model prescribes.
But I would also argue that the model itself has some limitations. Even with a perfect implementation of Ulrich’s model, the HR function is still only a staff function, with very limited resources, and (at best) with a weak and indirect ability to impact business outcomes.
In an article published last year I discussed an alternative concept, where HR is instead defined as a strategic business unit (potentially a profit center), measured on specific, outcome-oriented business goals. This model is not suitable for all organizations, but works well in many professional services and project based firms, and is also relevant for other large organizations that want to increase mobility and flexibility.
The article can be accessed by means of this link:
