closing the gap between finance and human resources...–is customer experience a value or core part...

Closing the Gap Between Finance

and Human Resources

Panel Discussion April 21, 2015

Our Agenda For Today

• Learning Objectives

• Introduction of our Panelists

• Brief Introduction to The Challenge

• Comparative Experiences and Perspectives

• Panelist Presentations & Dialogue

• Questions & Answers

Learning Objectives

• You should be better able to:

– Understand company performance through the lens of the CFO and share a common perspective

– Collaborate with CFOs to align human capital investments with company goals

– Leverage business intelligence to illustrate metrics that matter from a financial perspective

Introduction of Our Panelists

• David Morris, CFO, Tensar Corporation– Chief Financial Officer with track record of creating value at Fortune 500 and

private equity backed firms. Has provided financial leadership in rapid growth, turnaround and transition situations in a variety of industries and companies such as Cellu Tissue Holdings, BlueLinx Holdings, Georgia Pacific LLC. Has a BBA from Georgia State University; MBA from the University of Michigan

• Katie Lafiandra, VP Human Resources, Beazer Homes– Human Resources executive with 10 years of global executive human

resources experience, as well as previous experience as an attorney with employment, corporate, and risk management expertise. Has held HR leadership, P&L general management , and corporate counsel responsibilities in companies such as PRGX, IMERYS, GTE Wireless. Has a BA from Southern Methodist University; JD from the University of Virginia.

The Gap: Is it Real? Does It Matter?

• Different languages driven by different:

– Information and metrics driving decision-making

– Scope and focus of responsibilities

– Leadership and collaboration styles

• Closing the “gap” benefits company and HR programs

– Today – right talent, right structure, right culture essential to strategy

– But talent strategy and human capital investments are not:

• Always top of mind

• Effectively linked to company strategy

• Measured to everyone’s satisfaction

Collaboration at Key Inflection Points

Performance

Evaluation

Long Term

Investments

Strategy

Development

Business

Intelligence

Adapting to

Change

David Morris

• Chief Financial Officer

Tensar Corporation

Strategy Development

• What is it always about?

– Using existing or prospective competitive advantages to sustain and grow profits

• What is essential?

– People and culture always key (given financial resources)

– Ideas − shaping ideas into right strategies and initiatives

– Culture – can do, supportive, confident about pushing forward

– Individuals – passionate commitment to push forward

– Execution skills

Strategy Development continued

• How do we get the right people and culture?

– Repeated cycles of success – both the business and individuals

– Fair but challenging risk/reward environment

– Excellent hiring process – many are haphazard and mediocre

– Focus on performance and development

• Talent strategy and people programs should be part of how leaders work and lead

Long-Term Investment Strategy

• Right people and culture ꞊ good strategies and business

and capital investments

– Investing in people and culture

– Making right choices – old versus new way (invest to create)

OLD WAY NEW WAY

• Large companies, large hiring classes

• Attractive culture, business environment

• Structured, multi-year development

• High quality recruiting processes

• High interest in climbing the ladder

• Culture that values developing and stretching people

• No longer effective – for companies, employees

• Processes – not burdened with forms, leaders at every level

Performance Evaluation and Business Metrics

• Performance goals– Sustainable, growing profits

– Sustainable, growing returns on capital

• Goals are hard to achieve – must– Develop, maintain competitive advantage

– Execute well

– Get better to stay even

• Results of achieving goals– Higher productivity – value generated relative to inputs

– Returns to investors

– Personal growth for employees

– Increased standard of living/GDP per capita

Performance Evaluation and Business Metrics continued

• Profit not a dirty word

– Achieved by creating more value than competitors

– Relatively low fee for effective resource management• S&P 500 – 7.7 % of sales net profit margin (20 year average)

• Performance evaluation

– Measure results – profits and returns and their drivers

Profit and Return Drivers

• Sales growth • Cost of materials

• Gross margins • Inventory turns

• Operating expenses • Accounts receivable (DSO)

• Productivity • Accounts payable (DPO)

Summary – Adapting to Change

• Change is constant, possibly accelerating

• Good organizations – with good people, cultures –most likely to adapt

• Advice for HR and senior leadership– Develop shared vision on how to think about people,

culture

– Be intentional in pursuing that vision

– For HR• Learn the business and the people

• Become trusted helpers and advisors to business and individuals

• Help to move them forward

Katie Lafiandra

• Vice President Human Resources

Beazer Homes

Strategy Development

What initiatives or programs are essential to business goals?

3. Company Business Goals

What is most critical, given the stage?

2. Business Life Cycle

Does not fit all. What culture and people skills drive the operating model?

1. One-Size HR

Strategy Development

Strategy Development

• How it works? At many companies, HR:

– Plays catch up after long and short-term strategic business planning is done

– Provides HR budget built around HR strategies and programs developed without HR leader at the table

• How it should work? HR is:

– At strategic planning sessions to assess Talent programs needed to execute the strategy

– Integral to budgeting and planning to identify people risk• People Demand Plan (Quantity)

• Critical Skills and Critical People Assessment (Quality and Criticality)

Long-Term Investment Strategy

• Does HR Strategy support profit and return drivers?

• Outside of Compensation and Benefits, HR needs to improve the ability to:– Demonstrate ROI on its projects

– Concisely speak to benefits of a well-defined culture that leads to targeted programs supporting long term strategy

Strategic Initiatives

• Compliance & Administration • Engagement

• Leadership Development • Technology

• Training • Staffing

• Total Rewards

Performance Evaluation and BusinessMetrics

• Proactively measuring performance of your company, of HR function, and performance and development of individual employees

• Data is here to stay − HR leaders need to know their business

• What are the HR Metrics that matter for your company – Is it EBIT/Employee, Widgets Produced/Employee or

Revenue/Employee?

– Is customer experience a value or core part of strategy?

– Is turnover, retirement risk, management ratio important?

– Balance between time to fill and quality of hire?

– Measuring if assessments are making a difference?

Summary – Adapting to Change

• Communication, Communication, Communication– Active listening and meaningful speaking builds respect

– Think through the people issues without sacrificing business goals

• Understand Finance and HR purposefully have different roles − the balance is meaningful and necessary

• Finance needs to– Give quality time to people issues

– Eliminate finance jargon as HR should so that mutual goals are reached

Summary – Adapting to Change continued

• HR needs to:

– Be prepared, listen and ask questions that relate to the business strategy

– Then lead, budget and implement targeted HR initiatives that drive the business strategy

– Be the diplomatic guardian of the culture

Summary and Q&A

Scott Law404-236-9585

Closing Q&A

• Moderated by Scott Law

Lessons Learned – Key Take Aways

• Change is constant – organizations with good people, cultures – most likely to adapt

• Advice for HR and Finance Leadership– Develop shared vision on how to think about people, culture

– For HR – know the business, the strategy; lead, budget, and

implement targeted HR initiatives that drive to the strategy

– For Finance − give quality time to people issues; to evaluating

human capital investments

• Communicate, communicate, communicate

• Understand purposely different roles – the balance is meaningful and necessary

Thank You!

• Scott Law, Office Managing Partner, Tatum

(Scott.Law@Tatum-us.com)

• David Morris, CFO, Tensar Corp

(dmorris@tensarcorp.com)

• Katie Lafiandra, VP Human Resources, Beazer Homes

(katie.lafiandra@beazer.com)