The relationship between CFO’s and HR managers is often tumultuous at best. However,much of this friction can be simply avoided if the HR Manager understands the needs of a CFO and the ideology behind their thinking and actions.
“When CEO’s, CFO’s and HR Directors work together, they form the three points of a results inspired triangle that produce truly awesome results.”
There are four integral processes that must be undertaken in order to assimilate the views and productivity of both CFO’s and HR managers. Although these ‘strange bedfellows’ may often seem incompatible, the HR manager can bridge their differences through adhering to these four principles.
Understanding the World View of a CFO
In business, the CFO’s focus is on the hard data and the facts, figures and risk analysis essential to an organisation. They are responsible for providing accurate advice and strategies based on sound economics.
Where the world of HR is governed by people and relationships, the CFO deals in numbersand accountability. As such, they have the unpopular task of confronting people with the kindof hard data that make others in the organisation face the cold realities of business.
When people are confronted with these hard facts and figures and discover discrepancies they make excuses, engage in avoidance, procrastinate with issues they don’t wish to face even may become manipulative and as a result the soft (intangible) issues becomes the hard issues to deal with.
CFO’s deal with the black or white. They take these numbers to people, and have to deal withall excuses and negative behaviour which they are often ill equipped to handle. This is madedoubly worse because they know the value of numbers and are conscious of how people candistort them to avoid facing reality. They use numbers to serve the business in a helpful wayand are the champions for this. This makes there job even more difficult and frustrating.Commonly their worldview about how to deal with people is very simplistic and they usewhatever works with them to try and influence others, not realising how different approaches
will work with different people.
People often see the CFO as a “necessary evil” to their job but they are actually providing theentire organisation with a critical and valuable service through their analysis. This means they
are unappreciated in their job role and what they have to offer is resented, resisted, rejected or ignored by many people.
To communicate more effectively with CFOs, we must understand their position and why
they often experience the worst in people.
What can HR do to build a strategic relationship?
The CFO reports to the CEO and the board against the strategic priorities of the organisation.Everything must relate to these.
If HR Managers enable CFO’s to experience the value they provide to the business byunderstanding the challenges CFO’s have and assisting them to deal with them moreeffectively, they have the foundation to building a successful partnership with the CFO. CFO’s have a strong grounding in risk assessment, analysis and control, they can be a veryvaluable asset to HR. HR practitioners are people and resources orientated, and must utilisethese skills to be an asset to CFO’s. If HR use risk concepts in their rationale it will create a
common language with CFO’s.
In doing this the CFO can experience the value of HR and it will make their job easier andenhance their effectiveness in the business. It will also enable the CFO to see what HRactually does for an organisation, and appreciate their function and effect more.If the CFO is able to understand people’s human resource issues and how they react to themtheir consequent relationship with human resources will improve immeasurably. They canthen work together to strategically resolve issues within the organisation.In order for this to be successful the CFO needs to understand what HR is doing and how it
directly aligns with strategic priorities and produces an economic benefit to the organisation.
HR must produce business case presentations for CFOs.
The HR Manager must endeavour to show CFOs the financial leverage of HR activity andhow they can save or produce more dollars for them. By relating HR activities back toeconomics, the CFO will better understand and appreciate their role. If you are going toinvest in a development program what’s the return on that investment to the business. Whatdoes an unresolved conflict between two executives cost in terms of their performance? Whatis the cost of confusion? What is the cost of ineffectiveness? What is the cost of poor morale?When HR is good at identifying the cultural and behavioural links to financial performanceand they identify the value for CFOs who have a bias for looking at the economic value ofactivities.
When communicating with CFOs
Similar to producing case studies, HR practitioners must use analogies or metaphors thatrelate to the knowledge base of a CFO. As such, using accounting and economics metaphorsthat will make sense to them drawing on stories in business magazines that they read etc willwork. This means HR managers need to learn about these matters and understand howimportant they are in a business.
By explaining things to them in this way, you will be able to help them see both a correlation
and a economic value of all activities undertaken.
Don’t underestimate how much CFO’s care about people and their performance. They justuse a different approach to achieve that. It is by facing people with the facts, with reality sothey can make better informed choices. CFO’s often don’t realise not all people are wired likethey are and make the common mistake HR also make of assuming we all think the same and therefore what works for me will work for them. We have to walk in the moccasins of the person we wish to influence and what works for them and then give it to them so they understand us.