Dave Ulrich was one of the world's top management gurus until he gave it all up three years ago to run a Mormon mission in Quebec. Now he's heading back to business with a fresh eye — and some fresh ideas.
Dave Ulrich sees systems. Not just in the typical places — our offices, our halls of government, our sports fields — but in places you'd never expect. It started in college, at Brigham Young University. For his honors thesis, he examined the organization of the entire English department and asked: "Was the department designed to deliver value to its students?" The fall before he was to graduate, he presented his findings to the faculty. His conclusion: BYU fell woefully short in teaching its students how to write, and the university's practice of hiring its own graduates reinforced the problem. They kicked him out of the department. Or, as the dean put it the next morning in his office, "We don't think you should graduate with an English degree." Ulrich's diploma, unframed and stacked away, is for something called "university studies."
BYU's professors may not have appreciated Ulrich's diagnostic eye for organizational flaws, but today's business leaders tell a different story. In 2000, Forbes named Ulrich "one of the top five business coaches in the world." Business Week disagreed, ranking him the world's number-one management consultant a year later. As a sounding board to CEOs at such corporations as GM and GE, Ulrich built his career listening to (and ultimately resolving) complex organizational problems. He has published eight books on organizational behavior, human resources, and change. Rather than relegate HR to mundane chores such as benefits and company picnics, Ulrich calls for strategic systems that instill a deeper feeling of culture and community. Such intangible assets, he believes, motivate workers to produce tangible returns like revenue and market value. "Dave really takes a problem down to its generic roots," says Steve Kerr, a former professor and colleague of Ulrich's who is now the managing director and chief learning officer at Goldman Sachs. "He frames things in a way that makes them susceptible to solution."
While the Business Week ranking solidified Ulrich's standing as a guru, it only exacerbated his hectic schedule. He was already on the road three to four days a week. Over the years, he'd racked up 8 million frequent-flier miles speaking and coaching. A diet of airport snacks and stress added 100 pounds to his frame. When an embolism in his leg nearly kept him from attending his daughter's wedding in California, he knew something had to change. That's when Ulrich — raised a Mormon — dropped everything to answer the Mormon Church's call.
Since the summer of 2002, Ulrich has been working as the Quebec mission president for the Mormon Church. It's a full-time job overseeing 32 wards, 9,000 members, and some 150 19- to 25-year-old missionaries spread across 600,000 square miles. Accepting the appointment meant he had to step away from the consultancy he cofounded, Results-Based Leadership, and say good-bye to his colleagues. Many found his departure hard to understand. Ultimately, for Ulrich, the choice was simple: "Faith is belief times action," he says. "If you have a belief, you espouse your belief. If you don't act on it, your belief is moot."
Ulrich and I met outside the Montreal-Trudeau airport, where he picked me up for a couple of days of hiking and activities with 40 of his missionaries. After a few minutes of polite conversation, he fell silent and cleared his throat. "So what's all this Sarbanes-Oxley stuff about?" he asked.
Yes, Ulrich has been out of the game for a while. But his work over the past three years has been harder than anything he ever did in the business world. There are no vacations. There are no weekends. Ulrich must act as parent, boss, and spiritual leader to his missionaries. Their schedules, apartments, vehicles, medical care — everything falls under his jurisdiction (his wife and a small handful of volunteers help out). Now 51 and lanky, Ulrich has shed more than those 100 pounds since he left the States. Other things have changed, too. "All my life, I've tried to build organizations as systems," he says from the modest home supplied by the church. "But in all honesty, I have not thought as much about people. In the past three years, I've been knee-to-knee, eye-to-eye, and soul-to-soul with the people around me."
There are no balance sheets or stock prices to chart Ulrich's influence in Montreal. Here, the indices of his leadership are individuals, and victories and setbacks are personal. Polaroids of 150 missionaries gaze out from a whiteboard on his wall. Location, duties, seniority, country of origin — it's all there, shifting each day. But there are some things that don't make the board. Three months after Ulrich arrived in Montreal, one of the missionaries disappeared for three days. Months later, he ran out again, this time for a week. Each time, it fell to the Ulrichs to make the calls — to the police, to the hospitals, to shelters, and ultimately to the boy's family. After the second episode, the missionary was sent home. "In the business world, if there's a problem, I can fix it," says Ulrich. "Here, there are some problems I'm not going to fix."
Ulrich has always preferred the world of ideas and intangibles to that of hard numbers. In books such as Why the Bottom Line Isn't (Wiley, 2003) and The HR Value Proposition (Harvard Business School Press, 2005), he has empowered HR executives with the idea that 50% of their firms' market value comes from things they control — things that aren't mentioned in the accounting statement. He's also a masterly teacher. "Executives are mesmerized with him," says Henry Mintzberg, a consultant and professor at McGill University. "You listen because he talks about human resources and change in ways you've never thought about before." B. Joseph White, the president of the University of Illinois and Ulrich's former dean at the University of Michigan business school, says Ulrich inspires others because he brings zeal and hands-on experience to human resources, a subject generally buried in bureaucracy. "Bridging theory and concept to practice and application — no one does that better than Dave," says White.
Ulrich has also earned high marks as a professional coach, where he uses simple questions to pave the way for incremental action. Wrestling with how to jazz up GM's products a few years back, CEO Rick Wagoner threw up his hands, Ulrich recalls. "I've got books of action plans, Dave," the CEO said, but no solutions. Ulrich suggested he temporarily ignore the plans. "What one decision can you make in the next three weeks that will move things along?" he asked. Soon afterward, Wagoner hired Chrysler's design guru Robert Lutz to run innovation and product development.
Loping around the house at 5:30 a.m., Ulrich is more prepared than his relaxed attitude suggests. His Lexus is packed with boxes of granola, bags of oranges, and bottles of water. On the drive to Mount Royal, Ulrich and I meet up with a herd of identical tan 2005 Chevy Cavaliers that's waiting at the side of the road. At the top of the mountain, dozens of fresh-faced missionaries rub their hands and stomp their feet in the 40-degree air. This is where the system side meets the human side, and something greater than the two emerges.
Ulrich has been pushing a tiered-target idea, encouraging missionaries to contact potential church members 20 hours each week, invite 9 each day to meet personally, and confirm 6 individual meetings by week's end. Ulrich's approach has translated into 750 Mormon baptisms during his watch. "Every two to three months, I've got to get another idea that will hook people's attention," he says. "If I implement new ideas too much, it's chaos. If I wait too long, the energy dies."
While setting new goals, "My new tendency is to let them fail," he says. Why? Because Ulrich sees failure as a by-product of setting high goals. Following tough sessions, he will ask his missionaries how they might have done better. Did they elicit further discussion, or did they stick to yes and no questions? "You should go home with regrets because your expectations should be high," he tells them during a sunrise speech on Mount Royal.
Where does a passion for the interaction of people and systems come from? When Ulrich was a year old, his park-ranger father was hired by Job Corps to coordinate the training and education of 200 inner-city youths who had been relocated to South Weber, Utah, for training, education, and a fresh start. Though others shunned them, Ulrich learned to identify with the children from cities like Detroit, Chicago, and L.A. This was where he observed his first lesson in organizational theory. "The fallacy of Job Corps was when you take somebody out of a setting and give them training, they get it," he recalls. "But when they go back into their original setting, recidivism occurs; they go back to their old friends and their old habits." It was a lesson that would find its way into much of his work years later.
Ulrich's first big break as a consultant came in 1989, when he was summoned with 50 other top business thinkers to brainstorm with Jack Welch about changes needed at GE. Welch wanted to launch a two-day program for cultural change. Ulrich had seen what programs did when they failed to consider context — Job Corps's central flaw. He raised his hand.
"If you want to waste a million dollars, go buy a corporate jet," he told Welch. "Don't do a two-day program, because it's not just going to waste money, it's going to hurt. People will get expectations, and they won't be realized back in the workforce." Welch called him the next day and asked him to help design a program to cut the workload and bureaucracy at GE.
This was no two-day plan. Workout, as it came to be called, lasted nearly a decade. To create lasting change, Ulrich and fellow Workout architect Steve Kerr held to one central tenet: Make change a natural act in a natural place. Sticking to familiar locations, Ulrich led town-hall meetings and hit factory floors. "Workout helped to generate an openness we never had before in the company," Welch recalls. "We needed smart, independent people like Ulrich so that our own hierarchy wouldn't get in the way."
Asked what he'll do when he comes back to the United States this summer, Ulrich hesitates. He's anxious about his return. He fears he has been away too long — that his message won't be clear. But his close one-on-one work in Montreal has actually brought some ideas further into focus, especially those about using individual change to support institutional change. "If I want a mind-set or a culture at the organizational level, what does that mean for a person?" he asks. "If I want accountability for the organization, how do I help people build accountability and take responsibility for themselves? If I want the organization to learn, how do I help people learn? If I want efficiency, how do I build in personal time management?"
Ulrich's first teaching assignment would be only a couple of months away, and his first professional speaking engagement in three years was to be in front of 10,000 people. How will he prepare for the roles he's reassuming (beyond reading up on Sarbanes-Oxley)? "I'll spend a lot of time listening," he says. He plans to reach out to 10 business leaders he respects — folks such as Kerr and Anthony J. Rucci, EVP at Cardinal Health Inc. "I'll ask them: What are the questions you don't have an answer to right now?" he says. Kerr, for his part, isn't concerned. "Dave is quick and inventive," he says. "He'll be a leader again soon."
But on the eve of his departure from Montreal, Ulrich's emails reveal ambivalence about returning to the cutthroat world of nondisclosure agreements and quarterly reports. "As I return to the 'real' world, I wonder sometimes which world is more real," he writes. "The world I live in now — focused on building a caring community — or the world I left (and return to) of building a competitive community. Hopefully, we can find ways to build a competitive community through caring, but that may be a bit idealistic." He's probably right. But it won't stop him from trying.
Lucas Conley is a Fast Company staff writer.
A version of this article appeared in the August 2005 issue of Fast Company magazine.