Less than a quarter of a Financial Analyst’s time is spent with high value-add analysis -...
How does FP&A drive strategic partnership?
Looking to leverage your FP&A team into strategic partnership? One question to ask is how does FP&A drive strategic partnership & value? Strong FP&A teams have a neutral perspective and bring data-driven decision making into the partnership. Collaboration, operational knowledge and accountability are elements they bring to the table. Below I will explore three aspects where FP&A teams drive strategic partnership.
Driver 1: Consistent communication & accountability
Consistent communication is one element FP&A teams implement in strategic partnership and drive execution. Communication is vital to aligning different departments around business objectives and key results. They bring a viewpoint of cascading the right information and keeping the team informed on progress, roadblocks and timelines.
The second element where they help drive strategic partnership is accountability. Accountability is essential to any successful collaborative initiative or project. They help reinforce accountability throughout all partnership elements. Not only the outcome but also the different milestones involved in driving a key business initiative. They ensure timelines are delivered, information is cascaded and the project/initiative is moving forward.
Driver 2: Data-driven and less emotional decision making
Have you been a part of a decision that was based on gut feelings or guesswork? Usually, failure happens when decision making is based solely on gut or emotions. This is where FP&A brings value, a neutral and unbiased perspective necessary for data-driven decision making.
Data-driven decision-making is scalability and ensures agile learning which businesses can build upon. Many departments have an emotional stake in initiatives overall outcomes. For instance, if a business is looking to increase sales and working with an emotional or gut feeling department, their likely first response would be hiring more people. “If we had 3 more employees then we could increase sales by 10 percent.” Sound familiar? However, after incorporating FP&A teams the data becomes the starting point such as pipeline, productivity and other key sales drivers. Many organizations try to solve their problems or leverage opportunities by adding or subtracting people. However, its often better to slow down, look at the data and then speed up.
Driver 3: Breaking large initiatives into individual projects
It’s hard to see the forest amongst the trees and trying to tackle a key business initiative head-on might not be the best path. FP&A teams help break down a large initiative into smaller projects to build momentum, alignment and direction. For instance, when trying to increase sales leads and new opportunities. This is a challenging initiative and there are many directions to tackle this issue. Now, where FP&A teams help drive strategic partnership is isolating the issue into individual smaller projects, which could be looking at the marketing strategy. What are the marketing results? Is there a marketing strategy? Have they consistently met their KPI’s? Do they have KPI’s? If so, how are they tracking them? Gathering this information and results helps inform the next project. FP&A team’s ability to break down the project into smaller manageable projects and drive learning helps shape the overall outcome. Most successful FP&A teams are not only great financial leaders but even greater project managers.
In conclusion, FP&A teams if leveraged correctly and supported can be major partners for company success. Unfortunately, the reality is that most teams are viewed as scorekeepers so they are not the first group incorporated in the strategic partnership. We have a part to play and it takes that first leap of faith to change the tide. Lastly, find quick wins, challenge your people and take an active role in shaping and building your value in the strategic partnership.
The article was first published in Prevero Blog.