The below article summarises an approach developed throughout the years of my work and explores ways...
FP&A’s Push to Transform from Cost to Collaborator
Defining exactly what Financial planning and analysis (FP&A) does has always been tough.
Most people place FP&A in the Office of the CFO, and that makes sense, for many of us have certainly played the role of CFO a time or two, but as business partners, strategists and advisors, that is also not necessarily a perfect fit and as our roles continue to expand to become the central hub of corporate analytic and reporting this categorization may change.
According to the recent survey by the Argyle Forum, 40% of the companies that are looking to transform their FP&A model stated that increasing collaboration between the finance team and other departments is the most common end goal. Why is that? Is it because when Finance is involved, better decisions are made, costs are controlled and growth initiatives are enacted? Possibly?
Below I have provided 3 common traps and 5 tips to help you increase collaboration between finance and other parts of your organization.
3 Common Traps to Avoid When Collaborating Between Finance and Other Departments
- Being a team of experts is not, necessarily a good thing. According to authors Lynda Gratton and Tamara J. Erickson in their Harvard Business Review article: Eight Ways to Build Collaborative Teams, the greater a proportion of experts on a team the more likely it was to disintegrate. A key way to overcome this trap is to ensure each expert has his or her own area of specialization and/or focus on the team.
- Can’t we all just disagree on something? Creative abrasion is part of the team process. If everyone agreed on everything then nothing new and creative would get accomplished. Heated, passionate discussion, as long as it is respectful, is not bad, in fact, is should be encouraged. We need more passionate people in organizations. If everyone is agreeing on everything on your team, you may have a problem.
- Collaborate in moderation. Over collaboration is just as bad as too little collaboration. With the fast pace of business, many organizations see collaboration as a way to deal with insecurity and transition. Too many collaboration projects between Finance and business units or departments can also have a negative effect on productivity and slow business down, become hard to track and measure ROI. The lack of results will hurt Finance’s credibility with the organizations which could affect funding down the road.
5 Tips to Increase Collaboration Between Finance And Other Departments
- Get executive buy-in and have them lead by example. If you have a project management system then they should be using it as well to communicate with the teams, get status updates and understand the flow of information within the organization. This may always be one of the hardest to implement as many at the executive level feel they are too busy to be bothered by this type of leadership but, if you can implement, it will have the greatest effect.
- Adopt an open communication style. Knowledge is power and people hoard knowledge to increase their stature and control within an organizational hierarchy. This can be both a good and bad thing depending on the circumstance’s, but having a culture of open communication where every member can communicate with equality and authority will go a long way in promoting overall project ownership and collaboration.
- Share the tools you have and educate them on what else you can do. If you have cool tools, make sure they know how to use them to the fullest and what else you can do. If you utilize a Corporate Performance Management System, that captures data, make sure they know what it captures and how what they could do with it to help their business. In addition, and more importantly, create a tear sheet of all the other services you may be able to provide to them, decision support, benchmarking profit improvement, etc. Instead of them leveraging external consultants, many projects can be taken on using internal resources.
- Recognize power users. The power user is your champion in the department, business unit or division. They can facilitate information flow between two parties that may not always speak the same language and can be the cornerstone to a successful collaborative effort. Treat them well.
- Go beyond on-line tools and have a face to face contact. Conference calls are OK, video conferences are better but nothing beats a face to face meeting. In a world of virtual offices, nothing beats meeting people one on one. Make it a point to get together at least once or twice a year and break bread, have a team building exercise, just hang out, it will go a long way to building collaboration.