Ted Forbes, co-author of Making HR Matter: What CEOs Want and How to Deliver It, spent 25 years running HR functions at companies ranging from United Airlines (85,000 employees) to the startup Cotopaxi (70 to 300 employees). Ted introduces the "Relevant HR" framework and income statement thinking—a method that connects every people decision directly to EBITDA and cash flow. Ted started in consulting on merger integration before moving into HR at Capital One after the 1991 downturn.
For People teams in scaling companies, Ted addresses the moment when HR can no longer justify its work by activity alone. As headcount grows, leadership demands proof that talent, development, and well-being spend moves financial outcomes. Ted explains how to translate HR work into the numbers executives already track.
Challenges Addressed
CEO expectations are capped by past experience: Ted Forbes explains that if a CEO's prior HR was tactical and compliance-focused, that becomes the ceiling for what they expect from the People function.Activity over outcomes: HR leaders struggle to justify development and well-being investment because they report training attendance instead of results like sales improvement or EBITDA impact.Expensive hires made blind: Forbes describes how technical hiring decisions get made without visibility into their effect on company-wide bonus and EBITDA metrics, and how HR sits isolated from FP&A.Actionable Takeaways
Apply income statement thinking: Map every HR initiative to a line on the income statement. If a People program has no connection to the financials, Ted Forbes advises questioning whether the work should continue.Build a fixed labor cost metric: Bundle salary, benefits, relocation, bonuses, and perks into one number reported monthly against a ±2% tolerance. Ted used this to make hiring decisions transparent to the CEO and CTO.Identify growth drivers with a modified nine-box: Plot employees by cultural role modeling against economic value creation. Ted invests differentially in the upper-right quadrant—typically 15–20% of staff who open markets, design products, or improve distribution.
Questions This Episode Answers
How do I connect leadership development ROI to financial outcomes at a scaleup? Ted Forbes recommends income statement thinking: tie each program to a financial line item and measure outcomes, not attendance. He invests more in the 15–20% of employees who drive economic value while maintaining baseline development for everyone else.What metrics should HR report in monthly business reviews for a high-growth company? Ted built a single fixed labor cost metric—salary, benefits, relocation, bonuses, and perks combined—tracked monthly against a ±2% target. One aggregated line lets executives see how people spend affects EBITDA.What financial literacy does an HR leader need when scaling from 100 to 1,000 employees? Ted Forbes advises building a relationship with FP&A and requesting walkthroughs of the income statement, balance sheet, and cash flow statement. He stresses using the right outcome-focused numbers, not vanity metrics.Links & Resources Mentioned:
Connect with Ted Forbes on LinkedIn: search "Ted Forbes" Making HR Matter: What CEOs Want and How to Deliver It (200 pages) — available on Amazon