While planning new HR initiatives and making your HR budget projects for 2011, don’t forget to factor in one crucial aspect: Convincing your chief financial officer to back your proposals.
Too many HR professionals march confidently into the CFO’s office expecting instant approval, only to slump out shortly after with a rejection instead.
Truth is, getting approval for new projects and budgets can be a frustrating process that HR pros sometimes flub by making ineffective presentations and failing to understand CFOs and what they do. You can improve your chances of securing CFO support by using the following information to improve your presentations.
Understanding the CFO mindset
First, understand this about CFOs: About 54% of CFOs focus heavily on business development, while just 49% are closely involved in HR, according to Karl Ahlrichs, vice president of ExpertSpeaks, an HR andconsultancy.
For better or worse, that tells you where their priorities lie.
CFOs are under intense pressure to cut costs and ensure compliance with numerous government regulations. They tend to be independent and value accountability, according to Ahlrichs. Plus, they often lack thethat HR pros favor.
That can make negotiations literally a matter of dollars and cents. CFOs respond better to data than to appeals to “do the right thing.” Connect with CFOs by making short, concise and direct presentations.
During his presentation at the 2010 Society for Human Resource Management annual conference, Ahlrichs advised HR professionals to structure their presentations like this when entering a CFO’s office:
Express concern about the bottom line.
When pitching a new initiative or budget proposal, try this opener: “It’s a terrible time to be wasting money on bad business practices. My experience indicates we may be doing just that.” That sets the stage for the new approach you want to pursue.
Position your project as a cost-saving solution to a business problem. Cite case studies or examples that illustrate how similar projects cut costs or improved productivity at another organization.
Suggest the organization initially launch a pilot of the proposed project, focusing on an area that most needs improvement and is easiest to influence. Include projected return on investment.
Cite potential drawbacks. That enhances your credibility, Ahlrichs advises.
Assure the CFO that you will measure results and provide regular reports on progress. Summarize the benefits of the project using relevant business terms such as earnings, ROI, revenue, capital expenses, stakeholders, interest and human capital.
Cite any “hidden” money you may have found in the budget to help finance the project.
Bottom line: Structuring your presentation like this doesn’t guarantee a swift and painless sign-off. However, by communicating that you understand your organization’s operating environment and the fiscal pressures it faces, you can increase the odds that the CFO will back your proposal as a legitimate business solution.
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