How Being a CFO Makes Me a Better Talent Executive - Kristin Colber-Baker
After a 20 year in corporate finance — including two CFO stints — I converted to HR. Even after 10 years in the Talent arena the #1 question I get is “how did you make that unusual choice?” The underlying assumption is that there is little connection between the goals and capabilities of an exec in those two functions. I disagree. Here’s why:
Progressive companies establish goals to deliver on the expectations of multiple stakeholders (see Business Roundtable’s updated Statement on the Purpose of a Corporation, signed by 200+ corporate CEOs.) While this Statement is an expansion from the historical and singular focus on profit, nonetheless, generating long-term shareholder value remains critical to a company that wishes to access capital for investing in growth and innovation. We expect the CHRO or Talent exec to be the top champion for employee-related goals (just as the CFO champions delivering on shareholder expectations.) However, the most successful CHROs or Talent execs enthusiastically lead toward achieving the goals of all stakeholders, including customers, shareholders, employees, communities, and vendors.
CHROs and Talent execs face an endless number of investment choices: to up the quotient of a newly identified capability need, will we hire externally or develop current employee? With the business expanding into a new distribution channel, how might we quantify the shift in workforce capacity? What is the marginal impact of introducing choice in employee benefits vs. a one-size-fits-all approach? Sizing the ROI of various choices leads to more robust conversations among the management team and, more successful outcomes.
As a CFO, leveraging data and analysis was foundational to establishing every goal, strategy and decision. Historically, people-oriented objectives and strategies unfolded based on what intuitively seemed best for the organization and its employees. That world no longer exists. Today’s successful CHRO or Talent exec leverages data at every turn. In optimizing human capital across the employee lifecycle, data analysis guides the design, development, and deployment of savvy strategies.
For CFOs of publicly-traded companies, the equity markets measure the impact of their decisions constantly — at least from the shareholder perspective. Depending upon the industry and business model, people-related expenses comprise 20%-80% of the P&L. Forward-looking CHROs diligently measure the impact of people-centric initiatives to improve future strategies and investments and, ultimately, to achieve the purpose of the organization.
Converting from finance to HR may not be a common choice. But, when we consider the modernized purpose of a corporation, perhaps combining uncommon capabilities is precisely what will enable all of us to better deliver value for all stakeholders.
Kristin Colber-Baker, a seasoned executive and independent director (Fresh Del Monte (NYSE:FDP), is the Global Director…