Lunch with the CFO

My Café colleague Margaret O'Hanlon wrote an excellent post recently about the shared priorities and opportunities for teaming HR and Finance have.  You can read it here.

In the spirit of Hey, HR, Have You Hugged Your CIO Lately? Margaret advised having lunch with the CFO to get to know them better.  I’d like to pick up where Margaret left off and suggest some possible conversation topics.

Historically, both HR and finance have been used to thinking very separately about their data, business processes, and information.   In fact, it’s common for both organizations to spend inordinate amounts of time and resources reconciling the differences in their data, which is usually fairly stale.

Add to this the fact that not all HR executives are fluent in finance and you have what you might call a communication gap.  So unless you want to spend lunch sharing anecdotes about your kids - not that there’s anything wrong with that - here are a few tips for getting in the CFO’s head. 

Finance executives are typically driven by the need for accuracy, rigor, and discipline and not prone to hasty action.  They comfortable with spreadsheets because spreadsheets lend themselves to analysis, oversight and rework. 

These are all excellent qualities but tend to put a damper on conversations about hard to measure initiatives such as talent development and employee engagement.  As a result, it may be hard for the CFO to imagine how  closer collaboration with HR can help them. 

And yet, lack of collaboration can lead to last minute changes, faulty forecasting and - evil of all evils - budget surprises.

So let’s explore several mutually interesting topics to talk about, such as whether it’s better to cross charge v. moving an employee to new entity.  That's a great ice breaker and should see you through the starter salad.

Now gently lead the conversation to more advanced topics such as sales revenue per employee, which accelerators apply, etc., to show you really get that money stuff.  Then, if you want to impress, you can casually bring up real profitability by channel, i.e., direct v. indirect selling allowing for account size and support costs and how the numbers change when you use actual v. average people costs.

Next, if you don't feel you've got their full attention, ask a few intelligent questions about customer profitability factoring in sales, product and service costs broken down by support levels, special needs and “high frequency” customers.  Wonder out loud if you could reduce costs by leaving non-profitable accounts.

Most of the CFOs I’ve known could happily spend an entire lunch chatting about just that last one but if you work with a particular taciturn CFO here are some additional conversational shiny objects.

• Who is working on positive NPV projects, do they have the right skill and performance level and are they are at risk?
• How many positive NPV projects does each BU need to grow the consumer channel x% and do you have the skills in place to manage those projects?
• Are there projects that could be saved or decommissioned faster if you had better risk models in terms of people capacity, turnover, etc.?
• For workforce planning, would finance benefit from better information around PTO plans, demographics (i.e., % female under 40), etc.?
• What if you could reduce or eliminate the swag when it comes to estimating bonus payouts with more accurate and timely information on a quarterly basis?
• If your company is about to IPO, how can you ensure you have the right cash in the right currency in the right locations to cover higher than normal payouts?
• How much disruption is caused on the finance side of the house by not having insight into scheduled departures, large salary increases, relocation costs, expat allowances, etc.?
• What potential gains in accounting, tax and treasury strategy would be possible if less time was spent chasing data and more time thinking about how to create business value with it? 

By now the coffee has arrived and it’s time to remind your lunch companion that HR is the steward of the people, cost and risk information that is interesting to the CFO.  It makes sense to work more closely together to drive higher levels of financial performance and avoid unpleasant surprises.
  
Doesn't it?

Laura Schroeder is EMEA product marketing director at Workday, headquartered in Pleasanton, CA.  She has nearly fifteen years of  experience envisioning, designing, developing, implementing and  evangelizing global Human Capital Management (HCM) solutions and holds a certificate in Strategic Human Resources Practices from Cornell  University.  Her articles and interviews on HCM topics have been  published in the US, Europe and Asia.  She lives in Munich, Germany and  enjoys cooking, reading, writing, kick boxing (well, kicking things) and spending time with friends and family. If you want to read more from  Laura, check out her talent management blog Working Girl or follow her on Twitter @WorkGal.

Comments

[Margaret O'Hanlon]

Laura, this column was such a great idea. Thanks! I'm sure there's a hot button in the discussion topics that would get a conversation going with the crustiest and/or most evasive CFO.

Readers who don't know the acronym references -- check them out on the web, it's time to start speaking your CFO's language. It will give you a lot of insight into what's on your senior management's minds.