September 23, 2020
By Mohamed El-Rouby, Head of FP&A - Middle East Clusters at Takeda
Business acumen became one of the most important competencies for financial planning and analysis (FP&A) business partners. It is the admission ticket to a permanent seat in the decision-making table in your organisation.
Without business acumen finance cannot contribute effectively in the value creation process and is not able to understand what is behind numbers.
This article will explain how FP&A professionals can gain or improve their business acumen.
Business acumen is a competency which includes multiple skills of having full understanding of
Finally, business acumen should also include full awareness of the external factors, Technological, Legal and Environmental factors.
The person who has solid business acumen can see the “full picture” of the business internally and externally and can help organisation create value.
Take it as a project and spend quality time with each function to understand the whole value chain, revenue drivers, key cost drivers, customer value proposition, customers segments, key channels, key partnerships, pricing strategy, key competitors, suppliers, etc. The outcomes after completing the project of drawing the whole business model will be outstanding. You and your team will be able to understand the full picture of the organisation.
Do not miss any opportunity to run strategy conversations with senior leaders. If you got the chance to meet with CEO, General Manager, Marketing Director, etc., ask them about the company’s strategy, competitors’ strategy, and the strategic goals of the company. Such kind of conversations will give a good business understanding of how the company is thinking about its future.
Invite different people from different levels in the organisation for a cup of coffee. You cannot imagine the deep business knowledge you can get from running informal conversations with the people working on the ground, like sales reps, key accounts, product managers, etc.
Frequent field visits with the commercial team will help you and your team understand what is behind the reported numbers. Seeing the day-to-day challenges of the sales reps on the ground is a unique experience. To understand the market dynamics, pricing strategy, and all other commercial strategies, do not hesitate to speak with customers, compare the position of your company’s products on the shelf vs. competitors and talk to retailers, wholesalers, key accounts, etc.
To make these visits as productive as possible, you can take notes and later discuss them with the commercial leaders to get their feedback. The outcomes from the frequent field visits are always outstanding for you, your department and your relationship with the commercial team.
Do not lose any opportunity to join cross-functional projects either as a project team member or as a project leader. It is a great way to learn, increase business acumen, strengthen business relationship with other stakeholders, and improve the interpersonal and social skills.
Although collaboration is important, finance should not underestimate its knowledge. Our business partners are eager to learn many things from us. You can provide trainings like “Finance for Non-Finance” or “Advanced Excel”, etc. Such kind of trainings will help you to have business conversations with your stakeholders, and you will understand their business problems when they share examples from their day-to-day activities.
You need to print out the products master list and go to the marketing team asking them about each product in the list and getting deep knowledge about each one: its features, benefits, pricing strategy, market share, position vs competition, etc.
I highly recommend you meetings with your external partners (suppliers, customers, retailers, etc.) on a regular basis. This will provide you with a full understanding of the external market dynamics and the industry updates.
Joining any possible industry training and being an active member in the industry associations will help you to be on top of the new industry trends.
Business acumen is a must-to-have competency for all finance professionals. Without it they cannot build credibility with business partners, provide business insights or create value. Therefore, I highly recommend all organisations to include business model, value chain and product knowledge as an essential part of the induction program for all finance new joiners.
September 23, 2020
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