Introduction

“Did you talk to the stakeholders before building this tool?”

My boss’s question reverberated in my head as I realised that it was more of an indictment than a question. As the Capital Planning manager at one of the largest airlines in the world, I had spent significant time and resources building a tool that I thought would solve many problems across the company. It was a well-intentioned project, but it ended up being perceived with major apprehension and ultimately got shelved. I at once understood that I had committed a fatal flaw, deciding to invest in something on behalf of a user group without the following:

1. connecting with the target stakeholder group to understand their perspective on the ‘problem’,
2. taking that insight and using it to inform a potential solution and
3. leveraging storytelling to land the message and build consensus.

In my head, I knew this was a good idea. However, I forced it, and I was blind to the most important part – the human side of the equation. This valuable and humbling lesson drove me to take the softer side of FP&A and business in general seriously.

As FP&A teams look to elevate their contribution to their Business Partners, it is imperative to learn not only the latest analytical tools but psychology as well. According to Microsoft’s 2023 Future of Finance Trends Report¹, “83% of finance leaders agree that they would rather hire a candidate on the finance team who is stronger in soft skills than hard skills since hard skills can be taught.”

I think these stats underscore the necessity of recruiting and retaining well-rounded individuals. However, in this article, I will challenge the notion that soft skills can’t be developed. Rather than viewing soft skills as innate and unchangeable, we must approach them as muscles to be exercised. If we do not exercise that muscle, we will likely meet the same fate I did in my earlier example and see that our efforts to create value fall flat.

Today’s FP&A Landscape

Today’s environment starkly contrasts the FP&A landscape of a few years ago. Not only are we amid a transformation in how we apply hard skills and new technologies, but we are also in transition in how people interact. Remote work, globalisation, social media, digital communication platforms, etc., are all radically changing how we engage with each other. While some of these developments are beneficial, some present new challenges in a work environment. In particular, for FP&A teams, who sit at the nexus of various corporate functions such as operations, sales, corporate leadership, and so on. According to the Microsoft publication above, 80% of finance leaders cite that “they and their team are being challenged more than ever to add value beyond their traditional day-to-day.” Effective communication is paramount for the successful delivery of value creation.

I’ll give you an example. We’re implementing a new, enterprise-wide EPM platform that will require adoption across more than a dozen unique businesses. Communicating expectations effectively around use cases, roll-out timing, available features, security, etc., may be the greatest determinants of a successful adoption.

The Role of Emotional Intelligence

Emotional Intelligence (EQ), also known as Emotional Quotient, is the ability to perceive, understand, express, and control one’s emotions and discern and respond appropriately to those of others. In the context of FP&A, developing EQ is critical for enabling FP&A leaders to navigate complex interpersonal dynamics, cultivate trust, and influence stakeholders. One case that will resonate with this audience is the process of budget negotiations. Take a severe approach to this process, and you can be assured those conversations will take longer and be more painful. Instead, take a step back before that conversation and put yourself in their shoes. It’s likely that your posture and their perception will be noticeably healthier. This isn’t a silver bullet, but it often leads to better outcomes and enduring trust. Context and transparency help greatly during tough conversations like these. Setting up the broader context (e.g. “We’re not picking on you; we’re looking for opportunities across the board”) can counteract defensive, knee-jerk reactions. Emotional Intelligence (EQ) is more than a buzzword, as it’s the cornerstone of trust and influence in FP&A that can flip interactions like budget negotiations from battlegrounds into collaborative discussions.

The Art of Storytelling and Simplifying

One of the most underrated skills an effective FP&A practitioner should master is the art of storytelling. As mentioned earlier, expectations for FP&A continue to grow. That means we must go beyond numbers and present data as a cohesive narrative. Storytelling helps ensure the key insight we hope to deliver reaches our audience. In essence, storytelling translates abstract figures into actionable insights. While observing truly good storytellers, I’ve learned that a solid real-world example helps the message get through and stick. It’s easier to recall a concept when it’s paired with an example.

I’ve found that storytelling also forces you to simplify the message. Like the tangled web of a poor movie plot, long-winded stories with extra details typically lose attention long before the punch line. One of the most valuable and sticky lessons I learned from the CFO at a former company is that when presenting to a high-level audience such as executive leaders, board members, etc., we need to pretend as though we are priming our “very smart neighbour who knows nothing about the subject at hand”. This requires speaking in plain language, avoiding lingos and zooming out on the subject. Simplifying is easier said than done, though. It is very hard to reset your brain to a fresh state if you’ve been intimately close to a complex subject. Practising this with your spouse or even your really smart neighbour is an effective trick. You must strike the right balance by not compromising the integrity or meaning intended but still making the message digestible. As Albert Einstein once said,

 “everything should be made as simple as possible, but not [any] simpler”.

Building Meaningful Business Relationships

As discussed earlier, FP&A is often uniquely positioned among other corporate functions, as it interplays with a broad range of different verticals at the corporate level and across the operation. This dynamic naturally occurs as a product of FP&A’s very function, i.e. enterprise-wide planning, reporting, and analytics. Trafficking in information bi-directionally is the name of the game, and sometimes, those transactions are more lopsided in one direction. In other words, FP&A might be asking more from other business units than the other way around. This asymmetry, real or perceived, is challenging because it can cause strains in relationships and ultimately make information gathering harder over time.

To overcome this trap, we can deploy several methods. For starters, seek to build a real relationship outside of the ‘transaction zone’ instead of only interacting with key stakeholders when you need something. This may seem trite, but in my experience, it humanises both parties and creates mutual trust. When you need to ask for something, this groundwork will likely elevate your priority level for the other party. Not to mention, it helps you get to know your fellow teammates better.

Secondly, look for ways to help unsolicited. Sharing an interesting article, volunteering relevant information, or simply offering up a favour – these things don’t go unnoticed. It isn’t manipulative, rather, it is a common courtesy with a dash of strategy. Ultimately, meaningful business relationships are the currency of FP&A, enabling a flow of information that’s as valuable as the financial data we analyse.

Conclusion

This article is a call to action for all FP&A professionals to embrace the human element of our roles. By nurturing our soft skills, we not only enhance our ability to create harmony and influence within our organisations but also unlock the full potential of our technical expertise. Remember, soft skills, much like the financial models we craft, can be refined and perfected over time. Let the lessons of my own story be a testament to the growth that awaits us when we commit to this vital aspect of our professional development. As we continue to navigate the complexities of finance, let us do so with the confidence that our soft skills will help us create not just value but human impact.

References:

1 - Microsoft. "2023 Future of Finance Trends Report." URL. Accessed July 31, 2024.