Speaking at a Human Capital Analytics Conference in New York, the chief learning officer for a large telecom made an interesting comment about her relationship with the CFO: “Two years ago, I usually tried to avoid meeting with our CFO. I didn’t want any involvement with that part of the organization. Now, I consider the CFO a colleague, an ally and a partner as we drive value from learning and talent development.”
The relationship with the finance and accounting function — and the CFO in particular — can be contentious. In most organizations, the CFO is gaining influence and is now more involved in learning and development than any time in the past.
The CFO is one of the most critical jobs in an organization; that person will steer the organization properly through economic cycles. Gartner Research shows the number of HR executives who now report directly to the CFO has been increasing and now stands at almost 20 percent. In many organizations, the CFO is often one of the contenders to replace the CEO.
The CEO looks to the CFO to manage the organization’s financial performance. Profits can be enhanced by increasing revenue, decreasing costs or both. The CFO has limited influence on revenue, but can increase profits by reducing costs. With that in mind, CFOs are relentless in making sure the organization is efficient and lean, particularly in times of uncertainty.
There are often two extremes when working with financial leaders: friend or foe. Some CLOs see the CFO as being increasingly involved and unwelcome, requiring approvals for expenditures that previously did not require approval. For example, it is almost impossible to purchase a learning management system without CFO approval. In fact, the CFO usually has approval for the budget before the CEO approves it.
In downturns, CFOs focus on cost reductions for functions perceived as a cost and not as an investment. For example, the CFO for a Canadian aircraft company sent a memo to all employees expressing a need to control costs. To conserve cash to develop two new aircraft models, the CFO asked to suspend all training, consulting, off-site meetings and recruitment — functions perceived as costs, not as investments.
It is easy to see the CFO as a foe and not a friend. But, not so fast. CFOs haven’t asked for the additional responsibility to measure success for other functions.
For more than 100 years, CFOs have been using ROI for capital expenditures. Now the CEO would like to see the same approach for noncapital expenditures, such as learning and talent development. Some CFOs are uncomfortable with this responsibility. One told us, “They already hate us because of the budget process, now they are going to hate us even more when they perceive us as measuring their performance.” To keep the relationship friendly:
- Consider them to be metrics experts. If you are having difficulty securing additional funds for metrics, analytics and measurement, you may have a sympathetic ear because the CFO understands the power of analytics.
- Show them how you tackle major projects. For example, show the results for a major leadership development program at the impact level. CFOs may have no idea how to connect leadership development to a financial ROI, but chances are, you do.
- Involve them, don’t avoid them. Bring them into major projects you are tackling, addressing the challenges and issues you are facing. Discuss the projects you want to evaluate.
- Have them review program costs that would be included in an ROI analysis.
- Secure their help developing an executive-friendly learning scorecard that moves the accountability reporting beyond inputs, reaction and learning to include data on application, impact and ROI.
- Routinely review progress with the CFO team, even if you are not reporting to them through HR.
You may be surprised with the reaction. You’ll find a helpful team who appreciates your efforts to show business value.
The telecom CLO embarked on a program to measure the impact and ROI for major projects and connect programs to the business, using many of the aforementioned steps. She involved the CFO’s team, and it made all the difference in the relationship and the support she received.
Jack J. Phillips is the chairman and Patti P. Phillips is president and CEO of the ROI Institute. Comment below, or email editor@CLOmedia.com.
Learning leaders aren’t the only top brass who care about workforce development. At least, they shouldn’t be. It takes the metaphoric village — of senior leaders — to skill up today’s workforce. Chief Learning Officer spoke with Benjamin R. Mulling, chief financial officer for TENTE Casters Inc. and chair-emeritus of IMA’s Global Directors, to get his take on what employees at various levels really need from the learning function in order to succeed. Mulling also shared some of his personal anecdotes on the connection between career success and targeted development.
- How can organizations identify the professionals who are best suited for targeted development opportunities?
Organizations must seek candidates who show ambition and drive. The strongest candidate isn’t one who has been out of college for a certain number of years, but rather one who: continuously shows their core values, learns through ongoing education, takes initiative in their day-to-day tasks, and shows their tenacity and ambition, both in a professional setting and in their personal life, such as volunteering or joining associations.
- What skills do entry-level professionals need to be successful? How would you recommend organizations identify these skills in young talent?
The skills that entry-level professionals need to be successful include a mixture of soft and hard skills. Soft skills include communication, verbal and nonverbal, having courage to stand up in certain situations, and maintaining composure during tough scenarios. Entry-level professionals must be proactive and determined to get ahead of their competition.
Organizations can identify the aforementioned skills by paying close attention to when employees go above and beyond in various situations, and then purposefully take action to recognize them specifically, publicly and in a timely fashion. Identifying these skills can also come from an employee recognition plan that nurtures loyalty and a commitment to the company culture.
- How do certifications and other development opportunities help nurture and reveal these skills?
Entry-level professionals often enter the workforce believing that once they receive a degree they’re equipped with the necessary tools to lead an organization. Yet, when they get into a leadership position, they stumble because they didn’t anticipate all the necessary steps they needed to take in between. This is where certification comes into play, providing the groundwork for the steps in between coming out of college or entering the professional field to obtaining a leadership position.
- How did obtaining certifications impact your career/skill set?
When I first stepped into the CFO role, I was prepared to tackle any challenge. As I became more immersed in the position, I realized there was a gap between what I knew and what I needed to know to do my job. That’s when I obtained the CMA (Certified Management Accountant) certification. My education, until the age of 28 when I entered the C-suite, helped me become CFO. But the CMA continuously helps me do my job in terms of managing staff, acting ethically and assessing business risks. I applied my certification knowledge to my everyday tasks, thereby becoming a more competent CFO.
- What can employers do to advance learning capabilities and skills development for employees?
There are multiple ways, but the top three for me are recognition, rewards and results. Publicly recognizing employees when they advance their career, such as continue their education or receive a certification, shows other staff members that your organization acknowledges the employees’ hard work. A financial reward can also help advance their learning capabilities and can propel other employees to do the same.
Another way is with a transfer of knowledge, which can lead to powerful results for the organization. Managers in the finance function protect their jobs by withholding information about their processes because they don’t want the employee to potentially take over their role. This trend must stop because this is not how a transfer of knowledge occurs, and leaders with this mentality are not equipped to develop top talent.
- Continuous education is important, but how can employer-sponsored courses advance certain skills and help retain talent? What’s the benefit to both the organization and employee?
From a leadership and learning standpoint, employer-sponsored courses help retain talent because it shows employees that they have the opportunity to grow, and that their company wants them to continuously learn and develop new skills.
My company frequently provides leadership training for the managerial staff, technical training for the product development staff and manufacturing training where we bring in local universities to help answer employee questions and address other topics. This shows staff members that their employer is willing to invest in them, that they’re part of a bigger picture, helping to drive the organization forward.
The benefit of employer-sponsored training is if a company shows they’re investing in their employees through various learning opportunities, the employees, in turn, will invest in the organization in terms of time and effort.
- How did ongoing learning and developing your skills aid in your rise to the C-suite at such an early age?
Having certain degrees and certifications showed my superiors that I was a competent professional, capable of handling different tasks that I was willing to improve and grow. When I started my career, I proactively assessed my skills gaps and continued my education and joined professional associations like the Institute of Management Accountants to ensure I closed these gaps. I kept my finger on the pulse of finance and accounting industry trends and proactively tapped into my network for guidance.
Companies can provide ongoing learning and development opportunities for their staff, but recognizing the ones that have a desire to improve is what will take their organization to the next level. My desire to improve and succeed as a professional is what pushed me harder and continues to do so. It is this desire that aided my rise to the C-suite and makes me an effective CFO.
Kellye Whitney is associate editorial director for Chief Learning Officer magazine. To comment, email editor@CLOmedia.com.