High Performing CFO
What do high performers do differently?
Partnering for performance
Our survey provides strong evidence that effective collaboration between the CFO and the CHRO is associated with better corporate and HR performance. Such collaboration is also linked to greater EBITDA growth and to improvements on key HR metrics, including employee engagement and productivity.
"I meet with the CFO almost daily on one issue or another."Kimberly Hauer, Vice President and CHRO, Caterpillar
High performers collaborate differently
There are common characteristics in the way the CFOs and CHROs at high-performing companies collaborate, which set them apart from those at the other companies surveyed:
1. Greater maturity in organizational structure and operating model
High-performing companies in our survey typically demonstrate greater maturity in the transformation of their finance and HR functions. This means that both functions have integrated processes and have widely adopted shared service centers.
Their governance models are also more mature. The CFO and the CHRO are likely to be peers in the top management team who report to the CEO. High-performing CFOs and CHROs also simply communicate more — they spend a significant amount of time in discussions, both formally, as part of management meetings, and informally, through one-on-one conversations.
- High performers spend more time on collaboration
- High performers have a peer relationship
2. Greater involvement in strategic planning and decision-making
The finance and HR leaders at high-performing companies play a bigger role in strategic planning and decision-making than those at other companies. They use factual commercial information and analysis to help shape strategy, rather than just reacting to it, and work together to identify solutions to business problems.
The CFOs at these companies also get more heavily involved in strategic workforce planning, helping to explore potential scenarios and forecast the impact of broader trends on the workforce and productivity.
- High performers have more upstream involvement in shaping strategy
- High-performers use their relationship to adopt a more forward-looking approach based around identifying opportunities and solutions to get the most out of people and capital
3. Wider adoption and greater use of analytics
Analytics provides a powerful platform for collaboration between finance and HR. When data is consistent and mature across both functions, finance and HR leaders have the opportunity to make decisions from a more informed standpoint.
This helps them to identify opportunities and risks and to truly understand the drivers of performance in the business. In particular, a focus on predictive analytics can be a particularly powerful differentiator, as most companies only focus on lagging indicators, like employee turnover.
By looking ahead to assess how changes to the business will impact new skill requirements, and assessing the availability of those skills in the market, companies are better able to plan ahead and determine the viability of key investment decisions, and any potential human capital bottlenecks that need to be overcome.
This forecasting process – often undertaken over several years – forms a greater alignment and synergy between finance and HR.
- High performers use analytics to understand the workforce better
- High performers take a data-led approach to decision-making
4. More rigorous HR measurement
A platform of data and analytics across HR and finance enables a much more sophisticated approach to choosing and monitoring key HR and performance metrics. This means that companies can move beyond a narrow selection of metrics to one that encompasses those that really matter to their business.
High-performing companies recognize this and have adopted a more sophisticated approach to choosing metrics, which allows them to base their actions on the continuous monitoring of performance.
- High performers measure better and measure what matters
- High performers use broad metrics to track the organization’s health, not just the finances