2024 FP&A Trends Survey. Empowering Decisions with Data: How FP&A Supports Organizations in Uncertainty
Click here to read the report
2024 FP&A Trends Survey. Empowering Decisions with Data: How FP&A Supports Organizations in Uncertainty
Click here to read the report
The role of the finance leader is changing. Before long, your colleagues may see you more as a journalist or storyteller — able to unearth critical facts, share a compelling narrative, and deliver the headlines that your decision-makers need today. But how's this possible?
Over the past months, many of us have taken on different roles in our personal lives, perhaps as home-school teachers, DIY project enthusiasts, or emergency hairdressers for our loved ones.
At work, the role of the finance leader has been inching beyond traditional responsibilities too — but it's been happening for years. McKinsey has noted how CFOs are now playing an increasingly pivotal role in driving change in their companies, resolving issues outside of finance and having more functions reporting to them.
In my view, one of the biggest changes ahead is the role that finance leaders are set to play as storytellers — of the kind that envisions the future, spots trends and identifies market opportunities.
Traditionally, newsrooms have employed a "copy taster". This seasoned journalist will have an acute awareness of which of the stories pouring in will resonate most with their audience. They'll then give that story the right prominence.
Faced with a mountain of reports and data, finance leaders also need to pick out the headline stories for the board.
Other executives don't simply want the numbers, they want to know how the business is performing, what's succeeding and what's failing? To make the right decisions, they need to see the facts in sharp focus, understand the context, grasp the underlying story and imagine future scenarios.
As a finance leader today, you're in a great position to deliver this. You can make headline news, tell stories that inspire action and illustrate options powerfully. But what do you need to do this effectively?
Executives' eyes can glaze over when presented with an array of dashboards. Even when data is visualised, it can still be confusing and difficult to navigate. Left to themselves, people can come to their own conclusions about the data, which can be disastrous.
However, FP&A dynamic dashboards can give you essential tip-offs as you switch into journalist mode — so you can uncover the hot stories behind the numbers. You'll get to the facts faster and there should be no secrets that escape you.
Context is key. And your dashboard should allow you to compare key metrics in any current period with 12 months before in a way you can understand instantly. Suddenly, you can spot those deviations between actuals versus forecasts — and the direction you're headed.
This doesn't have to be just about profit and loss. It could be the ratio between personnel costs and revenues, sales figures per team or individual, or the way your regions are performing. Your FP&A software should also be interactive, allowing you to drill down to more detail immediately, in the spirit of an investigative journalist.
Any serious journalist will be asking questions of people who are in the know. And that's also important with financial storytelling. You need others to collaborate with you, so you can really get to the truth.
This is another area where FP&A software can help. You can enable commenting next to each data point, so your colleagues can add insights from their field.
It's essential to work closely with other business teams. They need access and encouragement to do this, so your storytelling factors in every conceivable reason why the numbers haven't gone to plan. In other words, you've grasped the heart of the issue and considered all the complexities.
The story you present to the board needs a conclusion. And for this, scenario planning is another excellent feature of any good FP&A solution. In fact, this should be fully integrated with the cash flow statement.
This is where you can quickly simulate various scenarios that compare numbers from previous months against key changes in your operations, spend and performance. For some companies, this has proved critically important during the coronavirus pandemic — and especially as they prepare for the bounce-back period.
If you aspire to become a journalist or storyteller within your role as a financial leader, here are three steps to follow.
That job title in your LinkedIn profile may say you're a finance leader. But when people ask what career you follow, you'll be able to explain it in a different way: You understand the financial stories that help to shape your company's future.
Your colleagues will see you in a new light too and will increasingly seek your assessments because they're clear and credible — just like the high-impact stories of a trusted journalist.
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