The document summarizes perspectives from several CEOs and HR leaders on what it takes for HR to get a seat at the CEO's strategy table. Key ideas include: understanding the business deeply, contributing directly to business goals, running HR like a business by measuring outcomes and ROI, having a unique strategic opinion backed by data, and managing the "white space" to positively impact interconnected business processes. The CEO of Skinner Nurseries emphasizes that HR needs to offer more strategic ideas beyond job ads when critical business needs arise.

1. Getting a Seat at the CEO’s Strategy Table North Central Florida Chapter of the Society For Human Resource Management

2. A little background: Last 3 months: Merrill Lynch Fidelity Bayer Verizon BankAmerica SunState FCU PGA Tour Mayo Clinic Blue Cross Enterprise Florida Wachovia eBay Volvo + another 20 or so smaller firms and govt. clients Last 3 years GE IBM US Navy Wharton, Harvard, Rutgers Allstate State Farm PPG HP Motorola Kinko's J&J Toyota Pepsi Ford + 120 others… Not an expert – just a lot of exposure

3. To get the HR perspective… Southwest Airlines Harvard Royal Dutch Shell Infosys Wind River Holdings Merrill Lynch Pepsi PGC Skinner Nurseries GE NZMP Verizon Qualcom

4. The last time I was here… I talked about a few things that some of you loved!! I talked about a few things that some of you did not like… Let me take a moment and cover a few of those key ideas to put tonight’s discussion in context

5. This did not make you very happy! “ Human resources strangles us with rules, cuts our benefits, and blocks constructive change. It has to do better.”

6. You shouldn’t just have a “seat at the table” you should be the one who helps build “the table.” Connoisseurs of Talent! Organizers of Genius Rigorous Recruiters of Excellence Agents of the “Rock Stars” of talent HR Strategy = Business Strategy When you are seen as the key source for bringing in and growing world class talent – you will have incredible power because you will add massive bottom-line value.

7. Microsoft Total World Domination The Top 5 % Bet the Company Require Failure Managers are Qualified Perform, Perform, Perform Shrimps vs. Weenies Stop the Insanity

8. Lessons from 7 top CEOs Have an outside-in perspective Be deeply passionate about your job Understand the importance of culture Create or adapt next generation products, processes and solutions Implement the best ideas regardless of origin 4 From: What the Best CEOs Know by Krames Dell, Welch, Gerstner, Grove, Gates, Kelleher, Walton = 696 B

9. Jack didn’t have a vision! GE = “Talent Machine”

10. Charlie Trotter’s Leadership Philosophy Hire Only the Best Teamwork Communication Highest Standards Innovation Truly Delight Customers

11. 1993: 67B 277,000E 180C = (8.3B) 2005: 91B 329,000E 164C = 7.9B #10 / F500

12. The IBM 16 Billion Dollar Strategy: Collaborative Partnerships with Customers Drive Unique value and GROWTH through Innovation and Creativity Invest in People Leverage Talent / Knowledge through Communication and Trust

13. 2005 p/T @11.9B > p/F+GM+DC+VW+BMW

14. The Toyota Way Challenge We form a long-term vision, meeting challenges with courage and creativity to realize our dreams. Kaizen We improve our business operations continuously, always driving for innovation and evolution. Genchi Genbutsu We go to the source to find the facts to make correct decisions, build consensus, and achieve our goals a our best speed Respect We respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust. Teamwork We stimulate personal and professional growth, share the opportunities of development, and maximize individual and team performance. Best People !!!!

15. “ When land was the scarce resource, nations battled over it. The same is happening now for talented people.” Stan Davis & Christopher Meyer, futureWEALTH

16. P ROBLEM 1 : Talent is damn hard to find

17. YOU have to be the key to talent in your organization Do you have a list of 20 wildly talented people you have lunch with every 60 days? Are you the very first person that all of your associates call if they meet someone of towering competence? Do you hang out with cool people and go to places where talent is abundant? Do you have your sights set on another dozen super talented people you’d like to poach from your competitors or other industries? Are you reading, studying and learning everything you can about best practices and benchmarking for finding and developing talent? Do you treat talent acquisition, development and maintenance as THE most important aspect of your job? 20% on Admin… 50%+ on Workforce Management

18. By the way… Say the right thing. Measure the right thing. Get rid of the “social workers.” Serve the business. Make value, not activity. In other words, you need to be a very talented business person, who just happens to have an incredibly high level of expertise in HR.

19. VERY Serious Students… of their organization of their industry / profession of their people / peers / managers of effective life skills of their own leadership interactions and especially of themselves… A word or two about how much to study and what to study…

20. Five Foundations of Effective Strategy Study Experience Vision Insight Execution 2

21. The problem with strategic thinking? It takes a lot of TIME… Study: In Search of Excellence, Good to Great, Built to Last, Results Rule, The Leadership Challenge, Who Says Elephants Can’t Dance, A Great Place To Work, The Toyota Way, Lessons in Excellence, What Really Works, Small Giants, Think Big – Act Small, What the Best CEOs Know, The 12 Simple Secrets of Microsoft Management, Tough Management, Practice What You Preach, The Art of What Works, The Four Pillars of High Performance, The Leadership Challenge, The Rise and fall of Strategic Planning, In Search of Excellence, Credibility, The Discipline of Teams, A Passion for Excellence, Liberation Management, The Wisdom of Teams… 25 @ 7,000p Experience: More than just your industry, your company, your job, and your personal experience Vision: 20% of your time on reflection, observation and creative thinking

22. Remember: Talent Rules!!!! You need to FIND talent You need to GROW talent You need to BE talent

23. That is what I had to say… Now let’s take a look at what a number of CEOs and senior-level HP executives from around the world have to say. I asked them this one simple question: What does it take for HR to get a seat at the CEO’s strategy table?”

24. Deborah Straight VP of HR at Southwest Airlines Understand your organization’s business Spend time every day talking with sales, production, quality, customer service, and accounting. Make sure you know what is going on in that bigger world. Know your customers, the cost of your products and services and how you are meting your monthly financial goals.

25. Share responsibility of the business goals The business goals are your goals too. You contribute to inventory turns, you supply the best people who are trained in the business , motivated by their work, rewarded by the company and led by effective management. You need to be very knowledgeable about the business and ask questions that will push or improvement and innovation by all.

26. Know the HR business thoroughly You people rely on you for correct, insightful and highly strategic information and advice. You must be reliable, trustworthy and knowledgeable. Let people down and they’ll stop coming to you for advice and information.

27. Run the HR department like a business Measure outcomes and goal achievement , not work. The keys are deliverables and ROI. If you cannot clearly show that HR contribute directly to increased profitably, revenue and market share – no one will take you seriously at an executive level.

28. Have a unique opinion Express your thoughtful opinions backed with data and study. You have to understand the numbers. How else can you offer a solid, intelligent opinions on the business direction? Learn everything you can on the business processes and competitive environment and back up everything with water-tight research and real data.

29. Learn and grow every day through every possible method Seek out experienced mentors on the business side of the house. Attend HR conferences, meetings and events. Attended leadership and management conferences. Attend at least 40 hours of professional development and business training every year. Seek out people who will ask you questions and challenge your beliefs.

30. Parker Smith 5 operating companies, 17 subsidiaries a little shy of a billion in total operating revenue. “ HR should be one of the most strategic aspects of the business, and a good HR person is worth their weight in gold – I just do not see them very often.” Problem: they do not understand how the business works. Yes, they know benefits and 401K’s – but they do not deeply grasp the interconnected processes of the business and how they can specifically reach across the enterprise to positively impact all of those processes. HR is in a unique position to manage the White Space

31. Manage the White Space CEO

32. Dave Ulrich from “The HR Value Proposition” HR, or any area – be it marketing, finance, manufacturing – deserves more attention and resources if… and only if… it creates value. We’ve concluded that value is defined by the receiver – NOT the giver. The Five Factors for Strategic HR…

33. The Five Factors HR must understand the external world. HR professionals should have a solid grounding in finance, technology, economic and regulatory issues, the effects of globalization and workforce demographics. HR must effectively serve all key stakeholders. Employees and managers are the traditional two – but HR must also be able to directly measure how they add real value to customers and investors as well. HR must create the practices around people, performance management, information and workflows – and align these practices with the corporate goals -- to shape the organization’s identity. HR must have a clear strategy and structure in place to deliver value to all stakeholders in the business. HR professional must possess the right skills and competencies to ensure they embark on the right actions to deliver the intended value.

34. Kevin Van Dyke CEO of Skinner Nurseries When I tell my HR person I need someone to run the new 100 million dollar division we are opening in Texas I need more than suggesting what papers we should run an ad in. I need very strategic and insightful ideas about the kind of person that should be running that part of our company and five or six incredible candidates that are all eminently qualified. And what I really need is someone who thinks about this a year in advance and is already networking like crazy to line up a list of top talent… before I have to even ask about the position.

35. Carl Rapp CEO of PGC My entire business depends on me having, growing and keeping the absolute best people – period. Gerry (VP of HR) knows the business as well as I do. He comes to all key meetings, knows our top customers and is very respected in the industrial gearing industry. He has a probably 30 of the best people at other companies just waiting for an opening here and gives me great ideas on new products, marketing and advertising. I could not run the company without him.

36. Bob Lane Director of Global Strategic Planning Royal Dutch Shell - London When the guy or gal in HR proves to me that they have truly valuable ideas and suggestions – that I cannot get from anyone else in the organization -- I will refuse to have any important meetings without them involved.

37. Siddharth Chaturvedi Infosys - Bangalore, India “ I define strategic HR as the linking of human resources with strategic goals and objectives in order to improve business performance and develop an organizational culture that fosters innovations and flexibility.” The new breed of HR managers need to understand and know how to measure the monetary impact of their actions, so as to be able to demonstrate the value added contributions of their functions. HR professional become strategic partners when the participate in the process of defining business strategy by asking questions that move strategy ahead and when they design HR practices that align with the key business strategies to deliver measurable competitive advantage and ROI.

38. Andrew McLean from the Harvard Business School Future / Strategic Focus People (soft) Day-to-Day / Operational Focus Process (hard) Change Agent Employee Champion Administrative Expert Strategic Partner

39. Functional vs. Strategic Performance Metrics Emphasizes administrative efficiency as performance standard Emphasizes strategic impact as performance standard HR function is primarily a cost center HR professional is primarily a strategic partner Can relay on current HR competencies Requires advanced HR competencies Focus on HR activities Focuses on business outcomes relevant to line managers HR owns only HR HR shares responsibilities for human capital performance with line managers Requires no understanding of strategy Irrelevant if not driven by strategy Results in HR being managed like a commodity Results in HR being managed like a unique strategic asset Increasing marginalization and outsourcing of HR to low-cost vendor Outsourcing not easy because HR’s contribution is firm-specific and based on more than cost control

40. What did it all say? You must deeply understand how the business works. You have to add value that no one else brings. You have to be able to clearly measure the real impact you have on revenue, profitability and market share. You have to be thinking about where the business will be five years out – but putting in the place today the plans, process and people that will get it there. You will get a seat at the table when you personally add so much value that they wouldn’t dare have a strategy meeting without you there --- regardless of what your title might be.

41. “ The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.” Michelangelo Thank You Questions ? www.johnspence.com