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FP&A Leadership: would you rather be liked or respected?
Would you rather be liked or respected?
It is a question we often get asked in interviews, or from our direct managers around our own style or when difficult decisions need to be made.
Liked or Respected, what is your preference? As if it is mutually exclusive (i.e. can’t happen at the same time).
If you were to survey 100 FP&A professionals would they rather be liked or respected I suspect you would get a resounding answer of “Respected”. In fact, 93% of the people I asked I got this response. I would rather be “Respected”. Whether this is because our profession is built on integrity, objectivity, professionalism and due care I am not sure. But categorically we can say with a fair degree of certainty that the majority of FP&A professionals believe it is more important to be respected than liked.
But what if there is another answer to this question. What if this question was an “AND” question rather than an “OR” question. Could this change our response? What if the question was:
Do you think you can be liked AND respected? Do we think that this is possible?
I certainly do, and the reason I do is because of the great leaders I have had the opportunity to work with over the years. If you think about the best managers you have worked for or with they will all have possessed that “likeability” factor. That intangible quality of warmth that you gravitated toward and either wanted to be around them or be led by them. But they were also able to balance it with the strength and authority and power required so that you knew exactly what was expected of you and if you didn’t deliver that, then a performance discussion would probably transpire.
In a similar context, FP&A professionals within commercial organisations and roles will often be faced with the question of do we want “Volume” or do we want “Price”. Should our organisation chase volumes or should it chase price (or profitability)? Should we remain disciplined to our pricing policies at the expense of volume, or do we need to trade our way to victory for a period of time and look at winning some market share at the expense of the bottom line?
This volume/price balance is, at its core, what Revenue Management is all about and accordingly the P&L of an organisation.
Unfortunately for a lot of FP&A professionals, we will get stuck on maintaining profitability and margins and “per” metrics and not have the awareness of the sales function that is looking to close deals and secure volume. Unfortunately, as in the liked or respected equation for an individual, both sides need to be balanced for the organisation to be successful.
So how do we do this? How do we balance volume and profit or how do we balance being liked with being respected?
This is what I like to call Organisational Polarities. And Polarity Management (see Polarity Management: Identifying and managing unsolvable problems by Barry Johnson) is the technique of recognising that there may not be a solution and that managing the opposing forces is more effective.
A perfect example of this is breathing. If I asked you “Do you prefer to breath in or breath out?” you would find it hard to choose. Breath in for a period of time and it feels great. But at some stage, your lungs will fill up to the point where you need to breath out or exhale. Breathing out may feel good for a period, but do this for too long and your lack of oxygen will force you to breath in again.
You can not make a choice to do one over the other. You need to find a way to perform one for a period of time before moving to the other and balance both.
This is what being “liked or respected” is like for an FP&A professional. You must display a sense of warmth with your team and your business partners so that you could build strong relationships with them. To be “liked” as a lot of the time you will need them to do some things for you. But at certain points, you may then need to dial that down, and dial up the technical or functional aspects of your job or the controlling and governing part of your role so that you can gain their respect. And you move back and forth with judgment.
Likewise, within any organisation you must be able to move backward and forward between the volume/price balance. Coming into a year-end you may sacrifice some price to gain market share (or “hit your numbers”), but at other times of the year, you may maintain your discipline around price. You may be operating at full capacity and do not need to discount your product or service as the volume isn’t required. You may be launching a product you are prepared for an introductory deal on, or not flex on price at all as you launch. These trade-offs and constant moving backwards and forwards are forever fluid and different at different times within any organisation. As an FP&A professional you will need to be attuned to where your organisation is positioned on the volume/price balance so that you can judge your approach to your business partners and stakeholders.
Liked or Respected?
Volume or Price?
For an FP&A Professional, the answer to these questions should always be “It Depends”. And it will depend on your judgment as to where you sit on the spectrum between the two, and which end of that spectrum needs dialing up or down at the time.