Six years ago Neil Roden, the Royal Bank of Scotland’s group human resource director, doled out copies of Dave Ulrich’s Human Resource Champions to his department – and by several accounts, he’s been drawing on ideas from it ever since. Roden was voted number one in weekly magazine Personnel Today’s Top 40 HR power players in 2005 and 2006, and his dynamic people policies are credited with helping the bank’s transformation into a global powerhouse.

There’s little doubt that when Dave Ulrich talks, HR listens. This is the man who, back in the 1990s, said that unless HR reinvents itself, it risks being “removed, outsourced and automated”. It was the wake-up call HR needed (and continues to hear) and it encouraged many in the profession to set out on a ‘transformation’ path to try to add greater value to business.

For the University of Michigan professor, it set him on a path to renowned status: Business Week magazine named him the number one management educator and guru; Forbes listed him as one of the world’s top five business coaches; and UK-based Human Resources magazine crowned him the most influential person in HR. Even time off the conference circuit to be a missionary in Quebec did little to diminish his celebrity and, if anything, added another dimension to his stage presence when he returned.

His latest work is The next evolution in HR organisation, co-written with Jon Younger, partner at the RBL Group (a consulting firm which Ulrich co-founded) and Wayne Brockbank, both a partner at RBL and professor at the University of Michigan. In it Ulrich argues that HR departments are increasingly viewed and managed as a business within a business, and like all businesses they should have a vision, strategy and goals and objectives. The overall challenge, he told Webster Buchanan’s HC Insider, is to help HR professionals learn how to do what is required for “today’s world, not yesterday’s”.

“This means focusing on customers and investors outside the organisation and turning their expectation into organisation actions,” he says. “CEOs and Finance Directors raise the bar on HR when they expect that HR investments will lead to business results.”

The next evolution in HR organisation begins by setting out two basic premises, which are familiar tenets of Ulrich’s work: that HR must be aligned with the business and that HR work is increasingly split into transactional and tranformational. The HR organisation that acknowledges this and shapes itself around these two premises will, he says, create and deliver value to the organisation. To take it beyond the theory, Ulrich and his co-authors suggest a blueprint for how this reinvented HR organisation should look, with five main areas of roles and responsibilities:

• Service centres and outsourcing, which takes care of the more routine and transactional side of the job and will typically involve some form of employee self-service
• Corporate HR, which concerns the HR professionals in corporate roles who build culture and identity; determine how HR will help implement the corporate agenda (e.g. in customer service, product innovation or corporate social responsibility); ensure HR is aligned to business goals; deal with disputes between other areas of HR such as centres of excellence and embedded HR (see below); develop corporate level employees, and be responsible for HR’s professional development
• Embedded HR, covering HR professionals who work in particular units defined by geography, product line or function. These are known by different names in different companies, including ‘HR generalists’, ‘HR business partners’ or ‘relationship managers’. They get involved in business strategy discussions, offer insights and help identify where their organisation can invest resources to win new business
• Centres of expertise, which operate as a specialised consulting organisation within the business. The business units are their clients and services are charged for. Units are directed by the embedded HR professionals to go to the centres before contracting outside vendors. If the two sides decide to appoint a particular vendor, any knowledge gleaned in the process is added to a bigger bank of knowledge at the centre and shared throughout the company. Centres could be corporate-wide, regional or national
• Operational executors, which are required to carry out operational HR work that sometimes falls between the cracks of the service centre and embedded HR. It requires a personal touch, so it’s not appropriate for the service centre and can impede the strategic work of the embedded HR professionals

If the approach is to work, Ulrich stresses that the HR professionals in each of the five areas must learn to work as a team. “Rather than say: ‘I am more important because...’, they should say: ‘we’ are more important because....,” he says. “The ‘we’ not ‘me’ becomes a mindset for HR professionals working together. And when HR can cast its work in terms of how it helps the business, everybody wins.”