Executing a business plan and meeting financial goals can be challenging. When businesses miss their financial targets, they need to understand and explain the reasons behind it. A strong FP&A team can provide valuable empirical data to address these issues and may even flag underperformance before it escalates. However, just because the FP&A team is good at identifying problems and developing solutions, the business will not always listen. This is where the skills of a therapist can be invaluable.

Like a therapist, an effective FP&A professional must first create trust and open dialogue. Strong relationships and active listening lay the groundwork for meaningful financial discussions.

Step 1: Establish the Relationship and Listen

Building strong relationships and actively listening are fundamental skills. While the time spent on monthly tasks can be significant, we lose an opportunity if we treat task completion as the ultimate goal. Monthly financial review, annual forecasting, variance analysis and budgeting should not be seen as mere checkboxes. Instead, they could serve as opportunities to engage with business leaders to discuss whether the numbers align with the strategic objectives. This approach transforms financial data from static figures into meaningful feedback that informs decision-making. When we receive feedback on whether our products are meaningful, we might need to refine the existing analysis to provide additional, deeper insight. This may be counter-intuitive since we aim for efficiency and standardisation to enable mass production. However, mass-producing reports without tailoring insights to specific business needs can lead us to missed opportunities. Presenting the data into a compelling story rather than just numbers enhances its impact and influence.

Once strong relationships are built and active listening becomes a habit, the next step is leveraging specific psychological techniques to enhance influence and decision-making in FP&A.

Step 2: Introducing the Tools

It’s undoubtedly valuable to be seen by the business as their go-to person, especially when critical decisions need to be made or challenges arise. However, to influence decision-making, you need skills that go beyond typical financial analysis. I thought it would help to share some powerful psychological techniques I’ve adopted from Phil Stutz and Barry Michels' book — “The Tools” .  These tools provide a structured approach to overcoming common challenges in FP&A — helping you move beyond just providing insights to actively driving action and results.

Tool 1: The Reversal of Desire — Addressing the Comfort Zone

One of the first therapy tools in this book is called the reversal of desire. It’s easy to do the things we like doing, but much harder to take on those things we hate doing — whether it’s making more sales calls, resolving conflict between two employees, or even firing a difficult customer. It’s easy to get stuck in the comfort zone. People retreat there to avoid pain, which in turn prevents them from making progress on their problems.

To push through pain, Stutz recommends having the following conversation with yourself:

1. Bring it on.
2. I love pain.
3. Pain sets me free.

FP&A takeaway: Help your leaders make tough calls by asking the right questions. The idea is to think about what happens if you fail to take action — you will be stuck in the same situation, never getting better. Try to avoid agreeing with your leaders just because it is easier — help see why taking action is necessary.

Another way to influence decision-making is by using loss aversion — a key behavioural economics principle that suggests that people fear losses more than they value equivalent gains. In other words, the pain of losing is psychologically about twice as powerful as the pleasure of gaining.

For example, losing $10 feels more painful than the pleasure of gaining $10. This bias can significantly affect decision-making processes, leading individuals to make choices that avoid losses rather than pursuing gains. Loss aversion can be observed in various domains, such as consumer behaviour, investment decisions, and even personal relationships.

In the context of FP&A, understanding loss aversion can help in framing data and recommendations more effectively. Instead of focusing solely on potential gains, emphasize what could be lost by failing to act. This approach can make the need for action more tangible and compelling for business leaders.

Tool 2: Active Love — Getting Out of the Maze

Tool 2 gets even better than Tool 1. When you start to address your pain, there is always someone fighting you back to discourage you and knock you back into inaction. Stutz calls this the Maze. The natural reaction when someone wrongs you is to retaliate. Instead, the recommendation is to respond with active love — a conscious effort to love something that hurts you.

The three steps are:

1. Concentrate: Really focus on finding the good in the situation and how it benefits both parties.
2. Transmission: Let love flow out of your heart.
3. Penetration: Feel love being received by the other person.

FP&A Takeaway: Inspire a positive mindset. While, as financial analysts, we’re not likely to directly recommend our business leaders respond to problems with active love, we can ask questions about how they are responding to problems. When things aren’t going well, we can provide encouragement and give examples of how they can respond proactively with active love, as opposed to listening to them and agreeing that inaction on their part is reasonable because they are a victim.

Tool 3: Inner Authority – Addressing the Imposter Syndrome and Self-Doubt

We all have moments of self-doubt. Our leaders are not immune. There are moments when they might “freeze” and find it difficult to express themselves well. Underlying this is an irrational sense of insecurity. It helps to realise that insecurity is a universal human trait that is frequently misunderstood. In psychology, these insecurities are called the shadow — the embodiments of all perceived negative traits.

In this tool:

1. Focus all your attention on your shadow — Acknowledge it rather than suppress it.
2. Present to your audience jointly with your shadow — Accept its presence and move forward with confidence.

FP&A takeaway: This tool is somewhat personal to me. Whenever I have to give a tough message to someone I’m struggling to connect with, I have people to help me practice my messaging with to make sure by the time I deliver to the audience — I can give my message persuasively and confidently. This takes a lot of practice. We should be there to help our leaders practice their messages in safe places, as it will help them get better at delivering their messages to their teams.

Tool 4: The Grateful Flow

When your mind is filled with worry, self-hatred, or any other form of negative thinking, being grateful is a wonderful way to counteract this. This tool is simple — start by silently stating specific things in your life for which you are grateful for.

FP&A Takeaway: Encourage leaders to focus on things they have to be grateful for and how taking action can create even more reasons for gratitude. There is always a tendency to see oneself as a victim, dwelling on obstacles rather than opportunities. Shifting the mindset towards gratitude can help us recognise and take advantage of the opportunities in front of us instead of fixating on the challenges working against us.

Conclusion

Integrating these psychological skills into the FP&A team's approach can significantly enhance our effectiveness. By building strong relationships, practising active listening, and applying tools like the reversal of desire, active love, inner authority and the grateful flow, FP&A professionals can inspire a positive and action-oriented mindset within the organisation. This holistic approach not only addresses financial challenges and improves decision-making but also fosters a more supportive and proactive business environment.