Tech Data, Florida Blue: Integrating People Strategies into the Bottom Line
By Keith Morelli
TAMPA (October 5, 2017) -- Executives in two top industries in the Tampa Bay region – Tech Data and Florida Blue – met in an informal setting Thursday morning to discuss the latest trend in business: allowing human resource officers to breathe the rarified air of the C-suite.
More and more corporations are aligning corporate strategy, the business of making profits and holding down expenses, with people strategy, the business of taking care of the people who devote their careers to making the business strategy successful.
Historically, the human resources function was a mid-level staff position focused on personnel and immersed in administrative and transactional responsibilities. But today, as businesses move to align their business strategies with their "people strategies," CHROs are so much more, often serving as coaches and trusted advisors to the CEOs, COOs and CFOs.
The practice is gaining traction among large corporations and small ones as well, the panel said. And not only are human resources directors more involved in creating business strategy, they are encouraged to speak up, even if their ideas may conflict with the CEO's plan. Florida Blue CEO Patrick Geraghty said he and his chief human resources office often disagree on how to approach business strategies.
"If you and I agree 100 percent of the time," he said, "one of us is useless."
The forum, attended by more than 150 people, mostly business executives, including a couple dozen human resource directors and staff, was titled "Aligning Business Strategy with People Strategy" and was held in the University Club on Thursday morning. Co-sponsored by Florida Blue and Right Management, the event was hosted by the University of South Florida's Muma College of Business and featured the CEOs and CHROs of both corporations for a discussion about why this transformational trend is catching on across the nation and the world.
Joining Geraghty on the panel were Amy Ruth, human resources chief with Florida Blue; Tech Data CEO Bob Dutkowsky and Tech Data SVP Chief Human Resources Officer Beth Simonetti.
"Our success depends on how to build an environment where people want to work for you and how to keep those people," said Dutkowsky, whose corporation averages $150 million a day in sales through 55,000 transactions. He said Tech Data has some 14,000 employees, and prior to elevating the human resources chief to the executive level, the only objective was the bottom line.
"We myopically focused on profits and ignored our employees," he said. "But then we decided it was fundamentally important to up our game in the way we treated our own people."
Tech Data hired Simonetti to advocate for those 14,000 workers, "who needed to be recognized for the hard work they were doing," she said. She became the first human resources chief to sit at the executive table and the only woman.
"That did take some getting used to," she said.
Dutkowsky said business strategy meetings around the nation increasingly are getting critical input from human resources executives like Simonetti.
"Human resources," he said, "now has a seat at the table."
According to a recent issue of Harvard Business Review, creating a mechanism that knits the CEO and the CHRO together will improve businesses. Elevating the position of the CHRO within the company and outlining new expectations for the CHRO by blending business and people strategies will not only advance business performance, the article said, but also improve a company's culture.
"Your people," said Ruth, "are the heartbeat of any organization."
Though this trend is still fairly new to the business world and a shift of this magnitude within corporate leadership may take some time to accomplish, the University of South Florida's Muma College of Business has positioned itself, along with successful local businesses and their corporate leaders, at the forefront of this movement.
"As a school," said Moez Limayem, dean of the Muma College of Business and moderator of the event, "we always teach our students to be leaders and be aware, or stay ahead, of the newest industry trends."
Florida Blue, and its parent organization GuideWell, have 11,000 employees, operate in 25 states with some $16 billion in revenue. Geraghty said success takes more than just having the human resources chief at the executive table. Communication with all those workers also is key.
He said town halls are regularly held, in which no employee is denied a chance to voice an opinion. He also holds regular blogs in which he offers give-and-take sessions with all the employees who choose to participate.
"There, we generate – and celebrate – new ideas," he said.
Each member of the panel offered parting advice at the close of the hour-and-a-half forum:
"Surround yourself with great people," said Dutkowsky, "whether it's your chief human resources officer or the clerk who runs the cash register. If you surround yourself with mediocre people, you get mediocre results."
"Share your strategy with your people," said Simonetti.
"Make yourself available," said Geraghty, "to all the people you're leading."
"Be authentic and transparent," said Ruth. "People know when you're selling them and not telling all the truth."