2024 FP&A Trends Survey. Empowering Decisions with Data: How FP&A Supports Organizations in Uncertainty
Click here to read the report
2024 FP&A Trends Survey. Empowering Decisions with Data: How FP&A Supports Organizations in Uncertainty
Click here to read the report
In the business game, it's not uncommon for Financial Planning & Analysis (FP&A) professionals to feel stuck on the sidelines. We often feel relegated to a scorekeeping role, effectively reporting on wins and losses rather than adding value through designing plays and coaching up the players. Our position in the organisation affords us the visibility and opportunity to add real value, yet it's not always clear how to get called into this game.
The answer is partnership.
A great Business Partnering between FP&A and the broader business isn't a mere coexistence - it's a relationship built on trust, respect, and collaboration. Mutual understanding of objectives, a shared language transcending numbers, and a commitment to elevating the organisation collectively are all marks of great partnerships.
In this article, we'll explore "The ABCs of Partnership," a comprehensive set of principles designed to shift finance from mere observers to integral players in the strategic game plan. Join us on a journey where great business partnerships between FP&A and the business are not just imagined but actively pursued and realised.
In the words of Wayne Dyer, our intention creates our reality. Partnership, at its core, intends to help someone else succeed. This idea may seem obvious, but maintaining this mantra daily requires significant cognitive effort. We are most effective when we focus inward, which becomes a challenge when our desire to impact pushes our focus outward.
For example, a well-meaning finance employee may believe they are most successful when helping the business stay on budget. This framing can evolve into dictating what the company can or can't do rather than working with the business to achieve its objectives within the existing budgetary constraints.
The key is to step back and ask yourself, "Am I being useful?" If that feels unnatural, here are a few other ideas to maintain an aim to assist the business:
A black box exists when the internal mechanisms of converting inputs into outputs are vague to anyone outside the system. They are typically described in software/hardware environments but could be anything – systems, processes, or decisions.
To increase trust, you must identify what black boxes you've created and pull back the curtain to clarify them. The goal isn't to flood people with information but rather to provide a line of sight into how their inputs convert into your output. We look forward to collaboration, which requires a base of shared knowledge.
Here are a few ways to apply clear-coating:
Knowledge is power, but the true power lies in how that knowledge translates to action. Most of FP&A's time tends to be spent reporting on the score – the budget vs. actuals, the result of an experiment, etc. This is classic scorekeeping – calling wins and losses. But knowing the outcome doesn't mean you've learned from the experience. Learning requires knowing what happened, why it happened, and how to apply that knowledge to the next challenge.
In short, to elevate information to insights, we must emphasise the "so what." Here are a few examples of how to do that:
In a world of challenges, optimism is not just a mindset; it's the fuel for innovation. Unfortunately, "optimism" is not typically associated with the FP&A team. Rather, FP&A is perceived as an innovation blocker, saying "no" to anything that wasn't originally considered in a budget created months ago.
This isn't to say that finance should say "yes" to everything. Our role is to help the organisation achieve its goals by managing trade-offs. We live in a constrained environment, so we have to thread the needle of empowering the team and avoiding budgetary overreach.
The key is to say, "Yes, And." This framework comes from comedy, where performers accept and, most importantly, build on each other's ideas instead of trying to outdo them. The intent is not to develop every idea but to maximise momentum by focusing energy on building upon each other rather than tearing each other down. Often, the words "yes, and" aren't even uttered – the new information is implicitly accepted and built upon.
How we respond is just as important as what we say. The "Yes, And" framework enables us to ensure our partners feel heard and valued, regardless of the decision.
Bias to action is a force multiplier. Finance's challenge in fostering a bias-to-action culture is balancing acknowledging uncertainties without dwelling on them. Too much confidence could lead to risky decisions, and too little leads to paralysis by analysis.
Here are some ideas on how to eliminate ambiguity to build velocity with your Business Partners:
FP&A's success is intertwined with the success of our organisations. By building best-in-class partnerships within our teams, we're not just advancing our careers but shaping the future of finance. By leveraging the ABCs above, we can put ourselves in a position to be elevated from scorekeeper to strategic partner.
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