Metaphoric Silos — since each employee, division or department interacts primarily within their specific “grain” silo rather than with other groups across the organization — need to be broken down to increase productivity and profitability. Mark Johnson of B2B CFO collaborates with Mary Henry of HR on Demand to produce the PowerPoint and lecture.

1. Breaking Down Silos: When
HR and Finance Collaborate
Mary Henry Mark Johnson
HR on Demand B2B CFO®
June 20th , 2012

2. Objective
 Define silos and the shift away from them.
 Benefits of coordination, cooperation
capability development and connection.
 What does that mean for HR and Finance?
 Work through business problems with the
customer focus

3. Mark Johnson
 CPA with KPMG an international accounting firm for
12 years
 Senior financial executive for large retailers including
Victoria Secret Stores, Kay-Bee Toys, Conway
Stores and PetsMart
 Partner for B2B CFO® with clients in
manufacturing, health
care, education, hospitality, construction and
litigation support

4. Definition of a Silo
 A metaphor to a grain silo where each
employee, division or department interacts
primarily within that silo rather than other groups
across the organization.
 Silos also extend to systems and data. As
systems fail to interact and data becomes
trapped and unavailable to key decision makers.

5. Examples of Silos
This phenomenon exhibits itself in a
number of ways such as:
 This is MY department syndrome
 “That’s not my job”
 Information isolation

6. The 4 C’s of Customer Focused
Solutions
 Coordination – Companies need mechanisms that
allow customer related information sharing
 Cooperation – People closest to the customer have
authority to act
 Capability development – Organizations need
employees with generalist skills
 Connection – Developing relationships with
external partners

7. Silos are Common
 Only 37 % of 23,000 employees in a recent
poll said that they have a clear
understanding of what their company was
trying to achieve and why.
Stephen Covey The 8th Habit: From Effectiveness to Greatness

8. How do we Fix the Problem?
1. Eliminate needless Formality and Hierarchy
2. Provide One Click Access to the Entire
Organization
3. Design Dedicated Physical Spaces for
Collaboration
4. Adopt Common Systems and Processes
5. Establish Cross - Functional Mentoring

9. Eliminate needless Formality and
Hierarchy
 Share resources through staff e.g.
accounting intern for HR
 Commit to regular meetings between
finance and accounting staff
 Provide a direct line of communication
with department heads (CFO and the VP
of Human Resources)

10. Provide One Click Access
 Streamline the communication of important
information flow between accounting and HR eg.
Staffing changes, promotions, budget
overruns, etc.
 Maintain common databases for monthly
financial information and headcount
 Provide financial statements with history and
details that are readily available and reliable

11. Design Dedicated Physical Spaces for
Collaboration
 Design collaborative physical spaces in
offices and conference rooms (i.e.
accounting and HR are physical situated
near each other)
 Use video conferencing and other technology
to connect directly with accounting and HR in
distant locations

12. Adopt Common Systems and
Processes
• Develop an enterprise wide information reporting
system (ERP) that provides all departments and
divisions information from a common database
• Establish and report on key performance indicators
(KPI’s)
• Utilize software tools for scheduling of
employees, performance evaluations and other
related HR processes to ensure effective and
efficient operations with budgets

13. Characteristics of KPI’s
 Only have 3 to 5 KPI’s for an organization
 Roll up departmental KPI’s to address
company- wide KPI measures
 KPI differ by organization
 KPI’s provide a direction, benchmark, target
and timeframe
 Includes operation and financial information

14. Some Key Performance Indicators
 Sales volume per unit or location
 Margin per product or location
 Cost per unit or location
 Overhead or fixed costs
 Utilization % of plant capacity or capital equipment
 Revenue per employee
 Payroll cost per employee
 Hourly rate of labor per unit

15. Challenges with KPI’s
 Expensive or difficult to determine
 Adjusts to changing needs in the company
 Difficulties in benchmarking
 Rough guide rather than a precise
measurement

16. Establish Cross Functional Mentoring
• Encourage staff in accounting and HR to find mentors in the
other department to increase communication and expand and
broaden skills
• Manage external resources that are shared such as a third
party payroll services, payroll benefits and executive recruiters
through cooperative teams between finance and accounting
• Create a multidepartmental team for difficult budgeting activities
such as headcount management, bonus structure and payroll
adjustments

17. Breaking Down Silos
“In most situations silos rise up not because of what executives are doing
purposefully but rather because of what they are failing to do: provide themselves
and their employees with a compelling context to work together.”
“To tear down silos, leaders must go beyond behaviors and address the contextual
issues at the heart of the departmental separation and politics.”
- Patrick Lencioni Silos, Politics and Turf Wars