The Importance of HR Practitioners to the CFO Role
CFOs are in a symbiotic relationship with HR
Many argue that the Chief Financial Officer (CFO) role is more diverse and challenging and is evolving to that of an architect of business value and managing complexity while controlling costs (Accenture, High Performance Finance Study, 2014).
At the same time, CFOs are under greater scrutiny and pressure to ‘save to grow’, to cut costs while simultaneously driving growth and ensuring control in the context of economic uncertainty, regulatory requirements and investor scrutiny.
CFO weaknesses could stem from a lack of strategic talent, being bogged down with operational issues and lacking support.
However, more traditional approaches to cost savings, such as streamlining processes, headcount and external spend have lost impact with over-use, requiring more strategic actions (Deloitte, Third Biennial Cost Survey: Cost-Improvement Practices and Trends in the Fortune 1000). Are CFOs in a position to undertake this? CFO weaknesses could stem from a lack of strategic talent, being bogged down with operational issues and lacking support.
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A useful way to analyse this situation is to integrate three streams of thought :-
1.the ‘Four Faces of the CFO’ (Deloitte) framework which distinguishes a dichotomy of CFO roles: ‘Traditional’ (‘Steward’, ‘Operator’) and ‘New’ (‘Strategist’, ‘Catalyst’);
2.different HR practitioner roles in Dave Ulrich’s seminal works: ‘Strategic Partner’, ‘Change Agent’, ‘Employee Champion’; ‘Administrative Expert’, revised to ‘Strategic Business Partner’, ‘Capability Builder’, ‘Change Champion’, ‘Technology Proponent’, ‘HR Innovator and Integrator’ and ‘Credible Activist’. What these exemplars have in common is the idea of a spectrum of CFO/HR roles, moving from reactive and implementers to proactive and strategists, in turn creating change catalysts and CEO partners;
3. to move away from universal, blanket approaches by adding the Rowley and Ulrich (Leadership in the Asia Pacific: A Global Research Perspective, 2014) framework of the ‘3Cs’ of ‘Context’, ‘Culture’, ‘Competence’ to fit CFO cost reduction strategies.
In conclusion, CFOs are in a symbiotic relationship as they need a strong HR function and organisation to give both internal and external support in employee resourcing and development. At the same time, this will help HR’s search for its ‘Holy Grail’ (the same one as for CFOs!) of importance and not only being involved in strategy, but also having measurable impacts – and even better if this involves so-called ‘hard numbers’ and CFOs.
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