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Bridging the CHRO/CFO Divide: Coordinate Your Approach to Line Management

Part 6 of our series on how and why Finance and HR should collaborate more closely

Bridge Stretching Out Into Fog or MistCEB’s survey of more than 100 midsized company executives clearly showed that executives in finance and HR – including CFOs and chief human resources officers (CHROs) – want to work more closely and take advantage of opportunities to help teach and learn from each other.

The same survey highlighted five areas where CFOs and CHROs agree on how they should work together, and four areas that CHROs and CFOs view differently and believe the other should strengthen their expertise.

The previous post looked at how CFOs and CHROs should collaborate to ensure that a firm’s compensation and benefits encourages the right employee behavior: namely that which helps the firm hit corporate strategic goals.

Last, but not least, CFOs and CHROs agree that they should collaborate more closely if they want to help the line make critical talent management and business decisions. Both finance and HR teams tend to revert to functional language that can isolate or confuse line managers. Coordinating their approach on how they work with the line, and participating together in regular business reviews, will prevent this.

Making Better Talent and Business Decisions: CEB’s View

Before they deal with the line, however, CFOs and CHROs should work to understand how strategic objectives (“launch product line x” or “enter markets y and z this year”) translate into finance and HR functional metrics and goals.

Then CHROs and CFOs should educate their teams on how tough it is to communicate functional expertise and language. For example:

  1. Finance: CFOs and finance managers must understand that effective financial analysis is only worthwhile if it starts the right conversations and encourages the right behaviors. If financial reviews – and the data that underpin them – aren’t doing this, then Finance’s work isn’t helping the business.

  2. HR: CHROs should realize that the value of many common HR processes and practices aren’t easily understood outside the HR world. If CHROs and their teams are talking or reporting in functional jargon, or being too functionally specific, then it’s likely they are either creating a lot of muddle and misunderstanding or, worse, encouraging the wrong conversations.

CEB research shows that 66% of the perceived value of a customer service interaction (including a corporate function’s interactions with the line) depends on the way the way that service is provided, as opposed to the content of that service (see chart 1).

Interpretation Drives Effectiveness

Chart 1: Interpretation determines effectiveness  n=294  Source: CEB Customer Effort Reduction Survey

This means that “how” things are communicated are twice as important as “what” is communicated if you want to get your point across. So CFOs and CHROs that often default to functional speak and frame arguments from their own perspective, rather than that of line mangers, are likely to diminish the value of what they’re saying by up to two-thirds.

Not only should they always consider their audience’s perspective before they speak but should also set-up a cadence of review cycles to make sure that their point of view and advice on key objectives is shared by the line.

CFOs and CHROs both need to be involved, at the very least, in joint quarterly meetings with the business to understand what shifts are occurring and what those shifts mean from a human capital and finance perspective. Many companies now hold monthly strategy reviews, run by the CFO, to help CHROs understand where risks and opportunities lie.

Executives’ View

When we’re chasing our quarterly targets, HR often becomes disconnected from the day-to-day business operations and financial outcomes, which results in poor decision making and an inability to adjust to changes in the environment.”

CHRO, Financial Services Industry

Up Next

The final post in the series will look at four areas where CHROs and CFOs disagree.


Read part 1 of the series, Bridging the CHRO/CFO Divide: 5 Steps to A More Powerful Partnership

Read part 2 of the series, Bridging the CHRO/CFO Divide: Engage in Strategic Planning Early

Read part 3 of the series, Bridging the CHRO/CFO Divide: Integrate Operational and Workforce Planning

Read part 4 of the series, Bridging the CHRO/CFO Divide: Help the Business Use the Right Metrics

Read part 5 of the series, Bridging the CHRO/CFO Divide: Align Compensation and Benefits with Corporate Strategy

Read part 7 of the series, Bridging the CHRO/CFO Divide: Four Areas Where CFOs and CHROs Disagree

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