Edward Hess in his excellent book Learn or Die reminds us that today’s average tenure on the S&P 500 is 18 years and declining. In 1980, the average tenure was 30.
Hess also states through his research that nearly half of the S&P was replaced in the past decade.
How’s that for company relevance?
Then he tells us the average tenure of the Fortune 500 CEO is just 4.6 years.
As an FP&A professional, you might be asking, “What does this have to do with me?” I believe the answer is everything.
Could it be possible that the role of the FP&A professional is just as much at risk as the large companies cited above or the CEOs of these same organizations? Shouldn’t we be asking, “How relevant is my role in the years to come?” Fair question?
Let’s unpack this FP&A relevancy question with a few others that might help.
Clayton Christenson on The Job to Be Done
Author and business consultant, Clayton Christenson teaches business owners that the key to selling more products or services is to know the specific job these goods perform for the customer. In this insightful video, Christenson explains that the job of the milkshake is to keep the driver occupied during a long drive to work while satiating hunger pains throughout the morning. Brilliant.
Let’s apply Christenson’s concept to FP&A. What job is being performed for every FP&A activity you perform? What’s the job of the historical marketing and sales analysis? What job is the driver-based rolling forecast being done for the users of this output?
I’m sure you can add to this list of questions. Accordingly, I believe Christenson’s simple job-to-be-done framework aptly applies to the FP&A relevancy question.
The better you can answer Christenson’s questions in all aspects of your work, the more relevant you are likely to be over the next 5 to 10 years.
Two More Questions to Throw at the Relevancy Question
I have a theory. I provide CFO consulting services for small, growing companies in the U.S. My gut instincts tell me FP&A relevancy is not at risk, far from it. For me? That’s a different story.
Here’s how I personally attack the relevancy question. I do so with two other questions:
- How am I helping my clients to stay relevant in the long term?
- Additionally, how am I staying relevant myself?
I think I know the answer. I’m not even sure IBM’s Watson has the self-awareness to address this. My answer is that I stay relevant by keeping my clients relevant for a long, long time.
Similarly, I perceive that you, the FP&A professional, stay relevant by keeping your employer relevant. Now work backwards which comes instinctively natural for you — how will you do that?
As a homework assignment, I’d enjoy reading your feedback in our LinkedIn Group about how you are staying relevant by keeping the organization you serve relevant. It’s not about you. It’s about making the business you serve great. You have some of the greatest intellectual capital in the world — the creativity and capability that exists in your mind. Use it and you remain relevant.