CFO-HR Harmony towards common business goalsMyCFO Blog | MyCFO Blog

CFO-HR Harmony towards common business goals

Venkataraman Srinivasan Founder & Director

Venkataraman Srinivasan
Founder & Director

“The company benefits immensely if the finance and human resource functions are in accord”

The HR Head and the CFO are the respective leaders of the ‘soft’ and ‘hard’ domains in a company. The former deals with people,culture, and behaviour – the soft side;the latter with data, facts, and money – the hard side. While these may look like completely divergent functions, for a company’s success, they need to be in harmony.Most crucial decisions are usually taken collectively, often with unanimous feedback from both the soft and the hard sides of businesses. How to derive the best from both and work towards common business goals
The uniqueness of the role of HR Head and the CFO is that they have a holistic view of the company and are possibly the only two roles that have some independence from the CEO. They bring on the table different perspectives, but ones that are aligned to company values. HR needs to be careful not to fall into the perception trap of dealing with emotions and feelings alone. The CFO, on the other hand, needs to respect that data and facts have their own limitations. The reality of corporate life is that no decision can be either fully subjective or fully objective.An organisation, like a human being,needs to be able to take decisions, often with incomplete data, in a fast-changing environment. Here is where a good CFO HR Head partnership can make a big difference.

CFOs can provide HR-Heads the ammunition to evaluate objective criteria
At a practical level, HR needs to work towards building measurement capability and objective criteria wherever possible.In manpower-intensive industries (for example consulting), HR often plays a critical role in utilisation and optimization of existing resources, with a direct and very measurable contribution to a company’s bottom-line. The CFO needs to be able to support this role through IT enablement,which will help provide factual data, trend analysis, progress against long-term goals,and building common platforms for interactions.

HR Heads can steer CFOs in the right direction through intuitive calls
Good CFOs recognize the need to balance data inference with a good-quality ‘gut’ call. No matter how data-driven the CFO, the ultimate implementation of a decision will be either effective or ineffective depending on the people who are implementing it, the people on whom the implementation is done, and the context of the implementation. None of these factors are capable of being measured, at least
not at a financial level. However, smart HR Heads are very aware and focused on factors such as productivity, profit per employee, and need for managing people costs within the P&L and could provide valuable insights.

Symbiosis is the best way forward
At the end of the day, there is no HR-way or CFO-way of doing things – there is an ‘organisation-way’ of doing things in which both HR and CFO will play key roles. Very rarely can decisions or actions be characterised as purely HR or purely finance OR can decisions be characterised as correct or incorrect as soon as they are taken. How well an organisation is able to mesh and balance HR and finance views while taking decisions and implementing actions will end up determining its success rate.

Author S.Venkat
Mycfo is India’s largest and fastest growing cfo services
company and a leading player in providing Finance Effectiveness

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