High Performing CFO

Interviews with CFOs and CHROs

Partnering for performance

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  • Brad Ferrer, Chief Financial Officer, CNN

    Q

    How important is the relationship between the CFO and HR at CNN?

     

    It’s extremely important. To give you some context, at CNN, most of our spending and resource allocations are all in the form of people.  While we do spend money on studios and cameras and travel etc, more than two thirds of our expense is tied to people, so obviously planning for finding the right skillsets, and having the right organization is very important to our success.

    Q

    What are the key enablers of your relationship with HR?

     

    One thing that is really essential is open communication about plans that are still in development. I have found that we partner most effectively with HR when we are talking about potential outcomes rather than decisions that have already been made.

    Q

    What role does technology play in your collaboration with HR?

     

    Technology can help to take you out of dealing with routine calculations. Many of our bonus-calculation methodologies have been automated so we can spend more time on the substance of performance plans — looking at how one change may or may not help the business — rather than on whether we got each calculation correct.

    And we partner with HR and our employment lawyers on a pretty-extensive electronic contracts database. It allows us to see all of our employees’ contracts, either in their entirety or summaries.  It means that we don’t have to spend a lot of time tracking down contract terms.

    Q

    How do you plan to deal with changing skill set requirements?

     

    We have begun a process of identifying areas of strategic significance to the business where skillsets may be changing.  For example, consumer electronics have changed the way people report stories, and that has a profound impact on the skillsets that we need.  Today a college student in a communications or journalism school can probably do more in the way of journalism than a half dozen journalists could have done thirty years ago, because the tools can be found almost entirely in a single device.

    Q

    How do you ensure that finance goals and performance incentives are aligned with the business strategy?

     

    Finance’s mission is to help our operating executives make the best and most-informed business decisions for the benefit of the shareholders. When we understand our place in the universe — if you will — it is easy to see how we align with the business strategy.  As long as it is clearly laid out, we are going to gear our work to helping achieve that strategy, whatever that might be. 

    Q

    How do you ensure the organizational model aligns with the business strategy?

     

    Over the years, we have had a number of project teams working on the organization of the business, to make it better at carrying out our strategy. There is one currently underway that is looking at a substantial part of the CNN news-gathering function. The key members of the team are from HR, finance and strategic planning — all in support of the operating executive who is going to have to make these decisions.

    Q

    How are finance and HR collaborating to address the rapid changes in the media sector?

     

    We are investing more in our digital business than we ever have, because so many people consume their news that way. We need to find the best people to produce television, but we also need terrific developers, people that work with websites, data security people. There’s just a whole different set of talent that you wouldn’t have thought about 15 years ago.

  • Brigitte McInnis Day, Human Resources Director, SAP

    Q

    What are the drivers of your collaboration with finance?

     

    One key factor is the pace at which we work and at which we have to deliver things — you can’t do it alone. You have to navigate relationships.

    And when you are looking at staff planning or at making reductions, you need the finance and the HR systems to be aligned. Otherwise, you cannot get a full, holistic picture for business resource management.

    Q

    What are the benefits of your collaboration?

     

    At SAP, we have built incentive plans to track 1,500 different financial measures, and we have 300 different pay scales to drive behavior. In order to do that, I had to be hip to hip with finance.

    And we are really good at knowing how many people we have, how many open positions we have, what our demand plan is, how we are tracking against revenue and profitability — and how we need to flex that every quarter, based on hiring and turnover. We have analytical tools to help us run that.

    Q

    How has HR changed in recent years?

     

    As a modern CHRO, I’m here to add value and I’m here to make an impact. As an HR professional, you can’t passively wait for an invitation to make a contribution. You need to understand how you can help drive the business.

    Because leadership and talent has become our focus area, we now attract more people from the business to HR. Once they come in, they say, “I didn’t realize how much you guys do and how much impact you have.” And this experience can give them a more holistic understanding of the business.

    Q

    How are CFOs changing?

     

    The exceptional CFOs are those who think about the people aspect almost at the same time as they think about the business result. They are people-oriented and are really savvy around the people aspect — the compensation, impact and motivation. The best CFOs actually adopt that approach and know how to operationalize it.

    Q

    What has changed in how you manage your workforce?

     

    Our business moves so fast that what we think we need in six months will change pretty rapidly. We reorganize, probably twice a year, 80% of the workforce.

    This means that workforce planning is becoming a thing of the past. What is more important now is to look at workforce trends to see what is emerging and what is becoming obsolete.

    And we hire people who have confidence in their own agility — whether that is mental, physical or business agility. If you have people who can’t reinvent themselves, they have to go.

    Across the business, you need to build people with more rotations and more transferable and general management skills. You can’t allow people to grow up in a silo — you hurt people that way and you make yourself obsolete.

  • L. Krishna Kumar, Group CFO, Tata Global Beverages

    Q

    How has the relationship between the CFO and the CHRO developed?

     

    What I see is that the role of the finance function and the role of the HR function have changed.

    The CHRO is now part of the top management group, along with the CFO and CEO. So when we have discussions on business value-related issues, the CHRO is part of those meetings.

    And pretty much all the decisions are made with the three of us acting as a team - so everybody has the same level of information and is able to input into decision-making.

    Q

    What roles do finance and HR play in strategy?

     

    Finance is more involved in the actual development of the plan. But for decisions with a human capital dimension - such as those about the type of human capital we need or about any cost restructuring - we typically have the finance and the HR person working together. So, for example, when we are making an acquisition, HR is part of the due diligence process, not just integration.

    Each individual business unit in our organization typically has both finance and HR representatives in its management group.

    Q

    Where can you see chances to increase or improve partnering?

     

    Projects such as creating shared service centers demand more business partnering - from the start, you want to look at them across functions.

    In terms of improving partnering, I think that, because finance has been business partnering for longer, HR may have a little catching up to do in its understanding of the different aspects of the organization and in its ability to work on a more holistic basis.

    Q

    What are the requirements for successful collaboration?

     

    Technology, integration and a single set of data are of key importance. And it is vital to have a structure that allows for collaboration, and an expectation that people will live the structure.

    But there is also a need for clarity about business partnering. At the higher levels of organizations, business partnering is well understood. But the lower levels remain very much siloed.

    Q

    How are you developing your people to be good business partners?

     

    We have established a group of people we’ve identified as future business partnering leaders. We try to improve their partnering capability by, for example, working on their analytical skills and getting them to spend time in different roles.

    We get them to focus on the business as a whole and to look across different groups of markets and at different options for managing them.

    It’s not just about increasing their skills in transaction processing anymore. They need to understand what business partnering is about and how they can contribute.

  • Rick Postler, HR Vice President of Global Business Services, P&G

    Q

    How has the relationship between finance and HR changed?

     

    There has been a generational change at the top of both finance and HR. Today, if you run either function, you are expected to be collaborative and multidisciplinary and to have common goals. That’s different from even five years ago, when the functions were more siloed, even at the top.

    Q

    How is HR’s impact on the business measured at P&G?

     

    We have a business unit scorecard with nine measures. Three of these focus on what I call human capital management - things like employee metrics, performance assessment and results delivered - and I own with them with the line. I ultimately have oversight over that section of the scorecard.

    Each individual business unit in our organization typically has both finance and HR representatives in its management group.

    Q

    How do you ensure consistency of data?

     

    When we had separate systems, they never ever used to reconcile. So, three years ago, we brought it all together, and now it's one system. It takes the best of the finance process system and the best of the HR process and it creates a common set of metrics. We actually call it “one truth.”

    Q

    How has your use of workforce analytics changed?

     

    In HR, what we did in the past was mainly about looking retroactively, and we only made projections on an annual basis as part of the firm’s forecast process. That sort of stuff, it's predictable and repeatable - it was the way we had always done it.

    And while we have improved, our effort now is going on the core process - to simplify it, to take out steps and to minimize reporting. The productivity is really big - it allows more scale and more sophistication.

    Q

    What workforce analytics projects are you currently working on?

     

    We're starting to model and create predictive analytics in areas such as attraction, retention, promotion, global footprint movement and costing.

    So, for example, I have a big hierarchy in India - but it is still a lot cheaper than having a small hierarchy in Geneva. How do we think about this from a workforce planning standpoint? What would be the cost of the different numbers of people in different locations? How do we plan around that?

    We've also begun to use things like diversity metrics to start to project our diversity pipeline up to 10 years out from now and to examine our advancement pipeline globally. This will help us to shape our strategy for what I call “technical mastery” around the world.

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