Improving people performance: the CFO's new frontier; The CFO role is extending from balanced scorecards and budget metric-setting into helping to define strategic business actions for continuous improvement. To realize organizational goals, the CFO must also enter the realm of people performance.

• Author: Angel, Robert
• Position: Productivity

If the role of CFO in your organization is confined to financial reporting, treasury and controls, you can be certain that this narrow role is becoming the exception. Increasingly, CEOs are looking to their CFOs to play a more decisive role in performance improvement programs as the "high-performance organization" becomes a strategic imperative, and perhaps even a survival one.

This extends the CFO role from balanced scorecards and traditional budget metric-setting into helping to define strategic business actions and playing a leading role in continuous improvement. However, it can land the CFO in the unfamiliar territory of people performance--which recognizes the dependency on people as an integral part of organizational performance and takes into account the personal goals of individuals who comprise the organization.

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Finding themselves in this position, many CFOs need a crash course into the people aspects of meeting organizational objectives and into the complexities of strategic performance improvement. Avoiding the course, leads to a somewhat untutored approach that is fraught with risk--for both the organization and the CFO.

To help CFOs address this gap are four people-oriented strategic performance management principles. These principles are based on aligning people and organizational goals, in order to create a high-performance culture. There is a valid reason for this: inadequate people alignment is the single biggest factor that holds organizations back from moving to a high-performance culture.

Principle 1: Organizational Performance is the Sum of its Individuals.

Most organizations create the appearance of assigning performance activities to individuals, typically creating individual performance plans that have been cascaded down from organizational goals.

For example, an organizational goal might be to improve group cash flow by 25 percent over the next year. The CFO's group might be assigned a subset of the organization's objectives, supported by some uniquely financial activities, like credit and collections enhancements, and some shared with other groups, such as speeding up the shipping and billing process. The hope is that if each individual in the group is assigned a portion of the overall goals, organizational results will improve.

Some hope! Allocating tasks based only on the organization's needs is not only an incomplete basis on which to ask the employee to act, but a recipe for employee disengagement and underperformance. By not explicitly recognizing an employee's own career and personal aspirations, an employer is overlooking what is of...