Presenting Your Training Initiative to the CFO

Leadership, learning, and talent development professionals are sometimes a little nervous talking with chief financial officers. CFOs ask hard questions and want to see demonstrable bottom-line impact for training initiatives being proposed.

It doesn’t have to be an adversarial relationship, says Craig Spitz, CFO at The Ken Blanchard Companies.

“As gatekeeper of the financials, the CFO asks the questions. The learning and development professionals provide the models and numbers that make the case for a training expenditure. It’s about connecting the dots. CFOs love to have that kind of help during the budgeting process—it makes their job much easier.”

Connecting the dots is especially important for discretionary budget items such as training, says Spitz.

“Budget-wise, a lot of expenses are pretty standard from year to year. But purely discretionary items such as travel and training are the ones CFOs need to look at more closely. For these items, we use a zero-based budgeting approach.”

That means identifying not only what the money will be used for, but also some of the reasoning and rationale behind the request.

“If we can quantify some ROI and demonstrated impact through lowered expenses or increased revenue, we can examine the request further. The bottom line is, if you’re going to spend these dollars for training, you need to show a positive financial result.

“The only time this wouldn’t apply is when we have a directive from the top that says we are going to target a specific culture problem or engagement score. That’s a mandate where the board or CEO says, ‘We need training in this budget to address those issues.’  In that case, we are dealing with an untouchable budget item and will have to find cost savings elsewhere. But most of the time, discretionary spending like training needs to be connected to financial impact.”

Learning and development professionals can increase the odds of CFO approval if they identify the expected bottom-line impact ahead of time. And having the VP of human resources on board with the proposal is key.

“That’s your first person to convince,” says Spitz.  “Training initiatives will funnel up to budget discussions through the VP of HR. As CFO, one of my first questions is going to be to ask the VP of HR what they think. If that person is not on board, the training initiative is going to be a nonstarter.

“Ultimately, everybody is held responsible for delivering the identified operating profit. If the CEO believes an important expense or revenue item will be positively impacted by a training initiative, then that initiative will be part of the plan.”

It’s about connecting the dots, says Spitz. Anytime learning and development professionals come prepared with models, numbers, and rationale that help to make the case for training, they make the CFO’s job easier.