How can we introduce an alternative to the three-pillar model?

HRpepper is assisting four companies of a DAX-listed group of companies with the design of an alternative HR organizational model.

The Challenge 

The organization is currently revising its HR business model from the ground up. Although the basic design follows Dave Ulrich’s familiar 3-pillar model, the individual pillars differ in their layout and function. The HR shared service section differs particularly from the model in its broader portfolio of service offerings. Around 75% of all HR services will be offered by the SSC. Four companies in the group who are part owned by other minority shareholders will not become part of the new arrangement, as shareholders are concerned about ‘gutted’ HR areas reducing the autonomous capabilities of their companies. The group has decided to support that decision on the condition of the four companies’ HR functions achieving a reduction of 30% in their cost structures.

The Response

The four companies have decided to follow a shared approach in their new HR function’s setup. The HR model of competence is being developed with external consulting support. All core HR processes are allocated to the defined areas of competence, specifying which services are to be produced by a central entity and which can remain in the local units.
The roles in the new model are being defined in detail with specific interfaces between them. HRpepper supports the newly appointed competence area leads in the development of their teams, as the function is the first leadership appointment for several of the chosen managers. This includes individual development activities, designed for success in their work. HRpepper is revising the new concept for the most effective alignment with the group organization. The entire model is being designed to remain compatible to the group HR organization and to allow a later ‘switchover’ to the 3-pillar model that is currently being introduced.


The Results

The four companies are currently introducing their alternative HR business models. Their executive management, all labour participation committees, and the group centre have accepted the chosen special solution. Its design allows organizational learning going forward, as the alternative model is in a constant process of comparison and validation with the group’s 3-pillar model.


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