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Father of modern human resources

Rather than 'roadblocks, impediments and policy police', HR units can instead be enablers of business results, says consultant Dave Ulrich.
Saturday, July 25, 2015 - 05:50
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TAKE it from Dave Ulrich, the professor famously known as the father of modern human resources. He says only half in jest: "The most strategic HR tactic ever is to place your worst-performing employee in your competitor, and tell that employee to keep doing what they're doing."

Hilarity aside, it's a useful reminder for Singapore companies. In this tight labour market, many firms are leery of any attrition - even of sub-par workers - since that would mean a manpower gap.

But such concerns are secondary, says Dr Ulrich, who believes the right question to ask is: "Are you retaining your best employees?" - which is altogether different from holding on to every employee.

The 61-year-old American is a professor at the Ross School of Business, University of Michigan, and a co-founder and partner at the RBL Group. The latter stands for "results-based leadership", and is a consultancy firm that provides HR, organisation, and leadership advisory services.

Apart from being a prolific writer - he has published over 150 articles and book chapters, and written 23 books - Dr Ulrich is also a bit of a management celebrity.

Business Week has ranked him the "top management guru" (2001); Forbes has hailed him as "one of the world's top five business coaches" (2000); and Fast Company has named him "one of the 10 most innovative and creative thinkers" (2005). This year, he is again in the running for the Thinkers50 list - a ranking of the best management minds worldwide.

And that "father of modern human resources" title? That was bestowed upon Dr Ulrich by HR Magazine in 2012.

Funny, then, that he actually wanted to be a lawyer.

On leadership and Lear

In 1976, Dr Ulrich - a devout Mormon - attended Brigham Young University, a private institution owned and operated by the Church of Jesus Christ of Latter-day Saints (LDS Church). His plan back then was to pursue an undergraduate degree in English literature, and to use that as a stepping stone to get into law school for post-graduate studies.

As it turns out, neither of those things - not the English Literature degree, nor the Law degree - ever materialised.

It all started with a single course in organisational behaviour, and a professor who captured Dr Ulrich's imagination.

"Organisational behaviour is studying how organisations work, how they think - 40 years ago, this was a new science. It was just creative, and the professor just captured my imagination.

"He said to me: 'Look at the organisations where you live, where you work, where you play, and figure out how they work. So you're in a restaurant. How does it work well when it serves food? You're in a hotel, you're in a supermarket, you watch a movie, you read a book. How do those things work?' And I just started writing papers," Dr Ulrich tells BT.

These essays are hard to classify; they applied organisational and management theories to classical literature texts. "The first paper I wrote was titled 'Beowulf: The Organisation Man', and I applied William H Whyte's ideas to what Beowulf did," says Dr Ulrich.

First published in 1956, Mr Whyte's best-selling study of corporate culture is to this day considered one of the most influential business management books around.

Dr Ulrich ended up turning his Beowulf paper in to both his English literature class and his organisational behaviour class ("I gotta confess, I cheated," he admits). While he was graded favourably in both cases, the respective professors' reactions were miles apart.

"The English professor said: 'This is just weird', but the organisational behaviour professor said 'This is cool, do it again'. So I wrote a paper on the sources of power in Paradise Lost, and another on how King Lear manages communication. And I just kept taking these classic English papers and putting them in an organisational context," recalls Dr Ulrich.

By the end of that semester, he had written 15 papers, each 15-pages long.

"The organisational professor then called me aside and asked me what I was trying to study. I told him I wanted to go to law school. He said: 'Don't waste your time. You should study organisations'."

Dr Ulrich's fascination with organisations' cultures extended into his final year at the university, and he chose to focus his honours thesis on a study of the English department.

"I wanted to find out how effective they were as an organisation. So I surveyed their graduates, I compared their courses against Columbia, against Harvard, against the best English departments. I looked at where their graduates got jobs, and asked whether the English department, as an organisation, serves its students well."

When he turned in that honours thesis, he was applauded for his creative approach, but spurned for his criticisms.

"The dean called me in and said: 'We loved your thesis, it's been approved, you'll graduate - but (the faculty) also voted that you should not major in English because you were so critical.'

"That was devastating, being kicked out of my degree," says Dr Ulrich. At that point, he was a semester away from graduating, but with no subject major.

Upon hearing the news, his organisational behaviour professor laughed. "He said: 'You've just learned something about organisations. You cannot criticise them in a public forum - which I had done - without accepting consequences. That's not good consulting; that's not good advice'."

His first lesson in advisory services learned the hard way, Dr Ulrich solved his academic predicament by choosing to graduate with a University Studies degree.

"(Under that programme) you basically have three minors instead of a major - you just need to have 20 hours in three areas. To be honest, it's the degree most of the athletes took, just so they could get their degree," he chuckles.

This gave a solid - if convoluted - foundation for his next two qualifications: a Master's in Organisational Behaviour at the same university, and a PhD in Organisation Theory at the University of California, Los Angeles.

The liability of success

Now at the helm of a 15-year-old HR consultancy group, Dr Ulrich has come a long way from his first, solo, unsolicited, and unpaid study of Brigham Young University's English department.

Today, through the RBL Group, Dr Ulrich offers HR, organisation, and leadership advisory services for multinational firms worldwide. These include household names such as Citigroup, Procter & Gamble, and Starbucks.

While small - RBL has a global headcount of 50, inclusive of 40 partners - Dr Ulrich says the 15-year-old company is aiming for impact over growth.

"We've decided that growth is not what we're after. We want to have impact. And (40 partners) is a number we can manage right now, and it seems to work," says Dr Ulrich, who co-founded the group with Norm Smallwood, a leadership development expert.

Still, with RBL's plans to use Singapore as a base for expansion into the region, the group intends to grow its headcount slightly in the next six months.

While RBL declined to comment on its financials, it shared that since its establishment in 2000, it has registered a compound annual growth rate (CAGR) of 8-12 per cent. It has also grown from a small regional firm to one with a presence in Singapore, Copenhagen, the UK, Abu Dhabi, Latin America, and the US.

In Singapore, RBL counts Standard Chartered, DBS, and even the Singapore Civil Service as its clients. In fact, part of Dr Ulrich's four-day trip to Singapore in June involved a day with over 350 HR professionals from the Public Service Division.

"We're a boutique advisory business or consulting firm, and our tagline is ideas with impact," explains Dr Ulrich. But when asked about RBL's reason for existence, Dr Ulrich's response is surprisingly candid.

"RBL doesn't have to exist. If we didn't exist as a company, the world would go on - Singapore would produce products, America would produce enemies. The reason we exist is very simple: to help our clients be more successful. (We exist to be at the forefront of) thought leadership, and to ask: 'What are some ways of thinking that will help the companies that we serve better serve their clients?'"

Because RBL consults primarily with large, brand-name organisations, one of the issues he is passionate about tackling is the liability of success.

"It's a concept that comes from political philosophy . . . That when you are successful, you grow and you succeed and you think that what got you success in the past will get you success in the future. That's not always true.

"What we argue is (that there is such a thing as) the half-life of knowledge - when 50 per cent of what you know is out of date.

"For example, I'm a professor, I give presentations with handouts. My rule of thumb is every two-and-a-half to three years, I should have 50 per cent new material. Because if I'm not regenerating fresh ideas, then I'm teaching what was appropriate for the past and not the future.

"That's the kind of liability of success - when you're successful, you tend to not push yourself to do new things." The ultimate price of such laurel-resting, as many now-defunct firms know, is complete obliteration.

The facts speak for themselves. According to research by the American Enterprise Institute (AEI), only 61 companies from the first Fortune 500 list in 1955 remained on 2014's roll.

"In other words, only 12.2 per cent of the Fortune 500 companies in 1955 were still on the list 59 years later in 2014, and almost 88 per cent of the companies from 1955 have either gone bankrupt, merged, or still exist but have fallen from the top Fortune 500 companies (ranked by total revenues)," says AEI scholar Mark Perry, who is also a professor of economics and finance at the University of Michigan's Flint campus.

Leading change gently

In Dr Ulrich's view, the reason behind such vanishings is simple: a company's unwillingness to adapt to changing times and evolving customer needs.

While this could be due to a lack of foresight from the top, Dr Ulrich points out that it is often a lack of buy-in from employees that hampers renewal and innovation.

"But good leaders help their employees to recognise the causes for the change. They don't impose change, but engage employees in the change; they help employees discover that the changes are actually to their benefit."

He says that good leaders will not shrink away from telling it like it is, and will simultaneously sell the new reality as an advantageous shift.

In Dr Ulrich's book, such a speech would look something like this: "If you choose to engage with the changes around you, then obviously you'll be more successful and have more opportunities. But if you can't adapt to the changes, we're not going to be able to keep you - not because I say so but because that's what the market requires."

Beyond leadership and organisational change, Dr Ulrich also studies HR practices - and is all-too-familiar with the accusation that HR departments are merely naysayers.

"It's the 20-60-20 rule. It's fair to say that in almost any profession, 20 per cent are exceptional, 20 per cent are terrible, and 60 per cent are in the middle. So if someone wants to find bad HR departments, I can lead you right to them. But I can also lead you to good ones as well.

"What I'm actually most interested in is neither extreme. The good people don't need my help, and the bad people won't take my help. It's the middle 60 per cent that I really want to help."

He contends that so many HR departments muddle along because they start from a place of "how do I do this training programme", or "how do I hire this person", or "how much do I pay this person".

"HR is not about HR - it's about the business. When a HR person meets with a business leader, their first questions should be: 'How do we win at this business - how do we better serve our customers, how do we make profit for investors?'

"Once we get those criteria laid out, then we say: 'If we're going to win in this business by getting more revenue from customers - by share of wallet, stomach, home, or whatever it is - what does that mean for our people? What kind of people do we need to hire, what kind of skills do our leaders need?'

"If we can start a HR discussion by the business, then a HR department is the enabler of delivering business results. When I tell business leaders that, they say: 'Oh, HR is here to help me do my job better'. And that is absolutely right."

If the middle 60 per cent of HR departments can approach their work in that way, Dr Ulrich figures he'd see fewer complaints about HR practitioners who are "roadblocks, impediments, and policy police".

Still, his approach to change is gentle - a spillover effect, perhaps, from the way he practises his Mormon faith. (In 2002, he and his psychologist wife, Wendy, put their careers on hold for three years to run an LDS Church mission in Montreal).

"Lots of people who do advisory say: 'You're wrong'. What I love to say now is: 'Let me show you how you can do better'. Some prophets tell people they're going to hell, other prophets tell people how to get to heaven. I'd rather be the prophet that tells people how to get to heaven, because I think that's a positive approach to change, rather than: 'If you don't change, you're in trouble'."


DAVID OLSON ULRICH
Partner and co-founder, RBL Group
Professor, Ross School of Business, University of Michigan


2012: Lifetime Achievement Award from HR Magazine for being the 'father of modern human resources'


2011: #1 Most Influential International Thought Leader in HR by HR Magazine


2010: #1 Wall Street Journal Business
Best-selling author (The Why of Work)


2005: One of the 10 most innovative and creative thinkers of 2005 by Fast Company


2001: #1 management educator and guru by Business Week


1983: PhD (Organisation Theory), UCLA


1977: Master's in Organisational Behaviour, Brigham Young University


1976: BA, Brigham Young University