The role of the CFO has got a lot more complicated and demanding over the past few years. Scrutiny is higher than ever, as regulation after regulation is piled on top of the profession. Many finance directors are saying: enough! But are finance directors focusing on the issues that will create real value in their companies?
We believe that most businesses have huge potential value locked up inside them - but CFOs and others need the right keys to access this. On the 'human capital' side, CFOs have rightly looked at the more routine services and transactional areas of HR (such as payroll), to see how they can be handled better and at a lower cost - such as through outsourcing. But these are the low hanging fruits.
But how many CFOs have looked at the areas of differential performance in human capital management? And how many have an open and constructive dialogue with their HR function about this?
At Hay Group we believe that human capital is not an 'intangible' - the key areas of leverage are all measurable and actionable in just the same way that other aspects of 'capital' are measurable. CFOs and HR have been looking in the wrong places and as a result, value is being 'left on the table'.
Here are some areas that CFOs could be looking at:
Effective leadership impacts directly on performance. Research conducted by Hay Group and many others has shown there is a direct correlation between superior leadership and bottom-line performance
Average performance is expensive: across many roles, a superior performer delivers up to three times what an average performer can achieve. Imagine applying that principle to your sales force - or your R&D department.
There is clear evidence that employees who feel engaged not only have lower levels of turnover, and higher performance, but also create more satisfied customers - and more satisfied customers mean bigger revenues and profits. This is not only measurable-– but also manageable.
Most major companies now operate a matrix structure - but how many companies can really claim to have focused on measures that enable employees in different parts of the matrix to focus on the 'white space' that provides real opportunity - but that is not usually given attention?
All of the questions we've posed above are directly measurable and actionable. They can be accurately addressed to deliver significant quantifiable bottom-line benefits. Hay Group has developed a suite of services to help organisations work.
Hay Group is a global consulting firm that works with leaders to transform strategy into reality. We develop talent, organise people to be more effective, and motivate them to perform to their best. Our focus is on making change happen and helping people and organisations realise their potential.