Business Finance versus Human Resources

Business Finance

Top professionals of business finance in positions of authority at most organizations hold titles such as Corporate Executive Officer (CEO), Corporate Financial Officer (CFO), and Chief Operating Officer (COO), which among other things calls for business and financial acumen, as well as exceptional analytic and decision-making skills. In these positions the evaluative focus is mainly rooted in financial capital and sustained by meticulous and close analysis of capital expenditures, revenues, cost structures, and profit margins etc. The quality characteristics inherent in and developed by these top business professionals tend to be more geared towards tackling complex issues related to finance, operations and marketing.

Human Capital Management

Whereas within the same organizational structure but marching to a somewhat different drum is Human Resources (HR), the acting gatekeepers and inadvertent matchmakers of the organization. Top positions of authority in Human Resources carry titles such as Director of HR, President of HR Generalist, Labor Relations Managers and many more, which among other things calls for a good code of ethics, superior organizational skills, sound judgement, and proper exercise of discretion. Within these positions the evaluative focus is primarily rooted in human capital and sustained by meticulous and close analysis of company labor costs, employee attendance rates, staff training or the number of performance reviews completed and distributed etc. The quality characteristics inherent in and developed by top HR professionals tend to be more geared towards tackling complex issues related to human capital management (with value given to people-oriented matters). 

 

Judging from the two profiles, it is not hard to discern the disparate ideological divide that is likely to exist between business finance professionals and human resources professionals. On one hand, it seems the business finance professional is likely to take a more quantitative approach to business functions. While on the other hand, it seems the human resources professional is likely to take a more qualitative approach to business functions. At the end of the day, it is all business. Right? Still, in order to get some insight into the process in general, as well as gain some perspective about the human capital strategy versus the financial capital strategy, I decided to hold a discussion with a Human Resources Executive at G2 Worldwide. In so doing, it unveiled some of the more elusive operating procedures that exist between and among the two entities. Also, it sheds light on ways to possibly bolster strategic consistency between the two of them, which allows the overall organization (in this case -- G2 Worldwide) to implement its chosen plan of action in a more seamless fashion.

In terms of G2 Worldwide's background information, the organization is a subsidiary to parent company Grey Global Group located in New York City. As one of the largest global networks in brand communications, Grey Global Group maintains 86 offices with well over 2000 employees throughout 42 countries covering regions, as far as Asia Pacific, Europe, Africa, Latin America, North America and the Middle East. Their vast client base includes: Heineken, E*Trade, Coca-Cola, Adobe, Canon, Diageo, NFL, Aetna, and many others. They are the winners and recipients of the 2009 Cannes Award having worked on numerous high profile campaigns that produced record-breaking results by way of effective political branding (OBAMcCAIN and The United Nation), product branding (Pantene, Toshiba, and Coca-Cola Zero), and service branding (Frontier Airlines).

A most noteworthy span of time in the company's history dates back to 1970 - 2003. At that time, the CEO of Grey Global Group was advertising titan Edward H. Meyer. Meyer. He would help grow the company's profit margins by 40 times from $29.5 million to $1.3 billion dollars within 33 years of his 35 years at the helm. A truly remarkable accomplishment that resulted in Grey's designation as a super agency and rightful place in marketing communications as a global leader of the marketing and advertising world. 

In 2007, Edward H. Meyer would officially step down after 50 years at the helm. He would be succeeded by James R. Heekin III. Just prior to stepping into the position at the time, James R. Heekin III worked closely with a senior management group he created anew to carry-out a freshly minted initiative called the "New Grey". According to Heekin III, this new platform for Grey represented a bold new design that would "... sharpen our competitive edge in creativity, total communications, strategic planning and business development". This new vision for the company would raise the bar for Grey in the advertising and marketing communications space and resulted in a vast array of performance awards for creativity including: 

• 10 Cannes Lions
• "Agency of the Year" at the European Effies 
• Addy “Best of Show” for Nokia
• Clio for Frontier Airlines, 
• Emmy for Dairy Queen in North America

These performance awards for creativity while contributing to the legacy of the late great Edward H. Meyer  also made for a smooth succession transition for James R. Heekin III.    

G2 Worldwide

The HR professional of the New Grey or G2 Worldwide humble beginnings began in New York City, where she was born and raised and attended Elementary and Junior High school before heading off to Ithaca, N.Y. to earn a Bachelor of Arts degree in Sociology at Ithaca College. Upon graduation, she moved into a position with New York Daily News. While at Daily News, she worked as an Administrative Assistant for a few years. She then transitioned into a position with Sotheby's New York-- an Art Auction House-- where she worked in a functional role as a HR professional. Also, where she labored for 6 progressive years before pursuing a Master’s Degree at The New School in downtown New York City. A decision and power move that would prove quite beneficial, as it helped forge the path to her current role as a Human Resources Manager with G2 Worldwide.

As manager at G2 Worldwide, the HR professional is charged with facilitating talent acquisition efforts, overseeing personnel, and managing day-to-day operations. Her role is considered highly crucial because it can have a considerable impact on the company's bottom-line. She explained, in terms of the company's bottom-line that taking a parsimonious approach to recruitment helps reduce costs and optimizes resource efficiency because effective recruitment efforts mean less turn-over. And less turn-over yields a high return on investment, which is a long-term benefit for the company.

Value Chain

The HR professional also mentioned that there are a combination of internal and external influences ranging in source, scope, and degree that either negatively or positively impact finances up and down the value chain. For instance, the internal influences of the marketing department may require an increase in talent acquisition efforts. Changes in their marketing strategies as a result of new product development or entry into a new market might require the creation of new positions to be filled. As the Human Resources Manager, it is her job to manage these changes by finding innovative ways to recruit, hire, and train new staff while providing them with the tools they need to succeed. This keeps staff morale, motivation, and interest levels up, as well as add to the company's bottom-line when properly aligned with its profitability objectives.

De-massing or Planned Downsizing

Furthermore, the HR professional explained how external influences like hard economic times resultant of lets say a recession is when a red flag is raised signaling 'cutbacks' and usually calls for de-massing or planned downsizing to reduce costs (e.g. 2009 - 2010 economic recession). In such cases, a meeting commences between human resources and senior management. Performance reviews are conducted and staff utilization reports are generated. Based on the numbers produced by the utilization reports or those reports that invariably serve as productivity indicators in assessing the performance levels of staff members within various units of the organization, a myriad of highly informed decisions are made to either improve employee productivity, reduce waste or eliminate useless activities in order to satisfy the budgetary requirements of the department. And this may be stating it lightly depending on the extenuating circumstances.

Nevertheless, the internal and external influences of the business affect the process of human capital management and how it relates to business financial management. This was made quite clear after chronicling the journey of HR professional and her role in the larger context of things within and throughout the organization. From her vantage point, it  was apparent that a philosophical divide existed between the Business Finance professional and the Human Resources professional. And that balancing the interests of the two through training represented a pivotal next step towards leveraging the business finance strategy against the human capital strategy in order to exact strategic consistency and overall better business.