When making a list of your most strategic allies in your organization, does your CFO make the cut? We certainly hope so. CFO and CHRO collaboration has been a hot topic for years, but it has never been more important as evidence mounts that it drives meaningful business growth.
EY found that 80 percent of CFOs and CHROs surveyed said that their relationship had become more collaborative. This makes sense since growth-seeking companies are likely to run up against two common road bumps: a scarcity of funding and a shortage of human capital. Getting past those obstacles requires a close working relationship with both the CFO and CHRO.
The same EY report found that CFOs and CHROs with global responsibilities, and those who are at organizations with annual revenues north of US$10B, are particularly likely to report an increase in their level of collaboration. Companies where the CFO/CHRO relationship has become much more collaborative reported average stronger improvement across a range of HR metrics, including employee engagement and productivity.
Finding Common Ground
Both CFOs and CHROs have one fantastic common ground: they are strategic evangelists. These leaders have a goal of getting employees engaged and aligned with the organization’s strategic mission, goals, and vision. Beyond that, CHROs need to understand the CFO’s primary focus and expertise. When you know this (and the CFO knows yours), you can begin to move toward the same page.
Do you understand the nuances of your CFO’s role? If not, make this detail a priority. And remember to share your own strategic insights. You both want the organization to excel, so sharing your passion for where the company is headed will be a win-win for both leaders.
Leading the Strategic Vision
Having a better relationship with your CFO can lead to positive organizational change. Both CHROs and CFOs need a broad understanding of the business as a whole, including its objectives, market forces, and resourcing. Be part of a C-suite powerhouse team—a strong collaborator who works together with other company leaders in order to navigate change.
Now, take that lofty, strategic vision and work with your CFO to capitalize on your ideally central position alongside the CEO in the strategic management of the company. That establishes the leaders of the "people side" and the "numbers side" of the business as big-picture thinkers who can identify strategic interdependencies. (You’ve most likely heard of the term “G3” to describe a central brain trust of the CEO, CFO, and CHRO.)
Hopefully, your CFO already plays a role in strategic workforce planning. This can include assisting the HR team in analyzing future workforce trends and looking ahead to upcoming industry disruptions and innovations that might impact hiring, learning, and other organizational functions.
It is important to remember that you are both people leaders. But your CFO is always going to be focused on performance, so offer them ways to optimize performance across all levels and in all departments across the organization.
CHROs and CFOs need a firm grasp on both the external and internal business environments so that they can sustain their respective roles as strong business partners. While the CFO balances the responsibilities of stewardship with business partnership and performance, the CHRO demonstrates the business acumen needed to understand the organization’s operations, functions and external environment. Together, both leaders can focus on performance management, measurement, and analysis to drive business outcomes.
Collaborate with the finance team to promote HR data. HR is more likely to be seen as a strategic business partner if it can turn HR data into clear, actionable insights about the talent pipeline to the C-suite. Be sure to include prescriptive recommendations for talent initiatives that can improve efficiency, reduce costs, and drive better business performance.
Set up monthly meetings with your CFO so you can fully understand their challenges and priorities. By developing programs and proposals directly related to their pain points, you will be seen as a strategic and creative problem solver. Using metrics and analysis can help shape strategy as you work together to identify solutions to unique business problems.
Hopefully, you already have a strong, collaborative relationship with your CFO. If not, use some of these suggestions to develop a strategic collaboration that will enhance business results while also finding solutions to key strategic challenges.