FP&A Board Maturity Model: Best-in-class FP&A and how to get there
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By Daniele Martins, VP, Global Head of FP&A - Business Partner at ThoughtWorks
Technology companies grow really fast. So keeping up with the pace and achieving great results requires innovative ways of thinking. Innovation should start from the top, with leadership. That means the traditional hierarchical model may no longer be the best fit for modern times and agile companies, as it is normally rigid and slow.
Right from the start, our company has believed that “two think better and faster than one”. That is why pair programming is one of our secrets for success, and it does not go unnoticed by our clients. So why should it be ignored by leadership?
Pair leadership is fairly common across our business. It helps support our culture of trust, collaboration, diversity and innovation. So when the company decided to officialise the Financial Planning and Analysis function back in 2018, having “2 leaders in the box” was the logical choice. Our business is present in 17 countries across the world. Working in an agile organisation with a flat hierarchy requires an around-the-clock online presence. Our processes are very collaborative, so having a global FP&A leader on each side of the world (me in Brazil and my colleague in Australia) was the natural fit for us.
As in many other companies, the Corporate FP&A was initially created to standardise our consolidated reporting, giving our results and forecasts visibility for internal and external stakeholders. As the team and company evolved, we turned our focus to providing business insights to the global senior leaders in order to drive performance and guide our strategic direction. Our global leadership group is composed not only of corporate leaders but also of the country's managing directors. As we all work in tandem to achieve performance, the FP&A team closely collaborate with the country’s finance leaders to consolidate the global picture, collecting insights, challenging forecast assumptions, and influencing best practices. Working so closely with so many stakeholders and different business units requires a lot of time: we have to build healthy relationships and in-depth knowledge of each particularity of the country in question. We believe this task is better suited to a pair than to a single person.
Successful pair leadership requires one key element: trust. As Patrick Lencioni writes in The Five Dysfunctions of a Team, “Trust is the first and most important factor in a team environment. Trust allows team members to establish rapport. This allows people to share their vulnerabilities and shortcomings with each other, without fear.”
Lack of trust creates politics, making it hard to collaborate and ask for help. When someone is not forthcoming about a mistake, fingers may be pointed. This wastes precious time that should be spent focusing on a solution. Being open about our weaknesses and fears also allows us to support each other on our career journeys. It strengthens the relationships, creating a safe environment for the next important element of pair leadership success: not fearing conflict.
It is natural for two people to have different opinions. This is the beauty of pairing: the diversity of backgrounds, opinions and experiences. When a pair understands the value of difference, they will create better solutions together. There will of course, be times of genuine discomfort, but trust facilitates a middle-ground decision. For example, my colleague and I have a different approach to attaining global targets for a particular model. One advocates a bottom-up approach, the other a top-down one. Once, one was developing upcoming financial plan targets using the bottom-up approach and took a few days off. As a change request came through, the other had to update the model and did it in a way that was easier for her, top-down. Instead of discussing which one was better or what caused the change, we focused on providing what the business needed. We then translated the top-down approach to a bottom-up one later as we are, above all, committed to the outcome.
Another secret is prioritising team success over individual performance. We lead with the motto, “If one fails, we all fail.” This drives shared accountability between all team members. If everyone is working for a common goal, it is impossible to say, “This is not my job.” We may not be able to do the job as well as someone else, but if that person needs to take some unexpected time off, it is always covered. In this particular situation, having a common group email address is helpful. When the business needs any support from us, or we are sending any request to the business, we copy in the group email, and we all become aware of the working thread.
Having clarity on roles and expectations is also important, but with the caveat of encouraging intense collaboration between everyone. A shared timeline where everyone can see the deliverables supports individual autonomy. Constant conversations are also key to success, whether they happen via video calls, follow-up emails, or group chats, especially on a highly distributed team like ours. Communication allows us to continually adjust and course-correct.
So what did the business gain from having two leaders in FP&A.
We believe there are 5 requirements for successful paired leadership: respect, trust, openness, team thinking and commitment. Many companies are yet to discover the benefits of paired leadership, but it has proven very effective in our business. In this world of remote working and multicultural teams, having more than just one person leading and enabling your teams can be very beneficial, right down to the bottom line of the business.
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