FP&A Trends Survey 2023: Define the future of FP&A
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By Muhammad Zeeshan Taqi, FP&A Team Lead at Telecommunications Regulatory Authority
After spending 15 years in the corporate life holding various finance leadership roles within a diversified range of industries and in organizations of different sizes and nature, I have realized that leadership is not about position, it’s all about perspective and our ability to create a positive and strong influence within the organization.
If you aspire to become a strategic finance leader one day, you need to focus on the 6 areas for improvement:
In this article, we will look into each of these qualities in more details.
Source: Muhammad Zeeshan Taqi
It is very important to understand that leadership starts from our own selves. If we are not able to influence or manage our own self, then we can’t influence others.
Personal leadership plays a vital role in leadership development journey which is often ignored by many finance professionals aspiring to take leadership roles. Two major elements in personal leadership include:
Personal branding is nothing different than corporate branding done by companies to sell and promote their products and services. We are also an entrepreneur as we are in the business of selling our talent. Therefore, if you have all the necessary skills and talent, but you don’t have a strong personal brand within your organization, your management and colleagues will not perceive you as a value creator and treat you as a more analytical person limited to financial analysis and reporting.
As you climb up to the corporate ladder, a strong personal branding may not be enough. Being an FP&A Director, CFO or any other senior-level professional, you will face lots of challenges and have to deal with difficult people by facing resistance and counter-arguments, there you need a high level of emotional intelligence by managing your own emotions and understanding and managing emotions of others.
This is another key pillar of the leadership development for financial planning and analysis (FP&A) professionals. In order to climb up to the FP&A leadership position, you need a high level of business acumen and strategy knowledge. This will help you understand the value creation model of the business, how the organization creates value for different stakeholders including internal and external customers, how to measure the value being created and how to minimize leakages in value creation using enterprise performance management.
Having an analytical mindset is not sufficient to get your seat in board meetings and to create influence at the C-suite level. You should understand the existing strategic position of the organization and where they want to reach by understanding their vision and mission. Best way to build your strategic mindset is by asking the right strategic result-oriented questions from the right people within non-finance business functions.
For strategic finance leaders, it is also important to have a good understanding of the company’s operations in order to support them in achieving operational excellence and in executing their strategy at the operational and tactical level.
To better understand the company’s operations and various activities involved in supply chain, it is recommended to use Porter’s value chain model. The model can help understand how different support functions (procurement, IT, HR etc.) work to add value to the entire process. FP&A leader should collaborate closely with all these business functions including sales & marketing to understand which activities are adding more value and contributing to the overall strategic objectives of the organization.
Activity-based costing can be used to calculate the cost of each activity for budgeting and financial reporting, so it will be easy for financial planning and analysis function to measure the performance of each business function against these activities and this will help the organization to streamline their operations.
This doesn’t mean that you need to become a technologist, rather you need to have an in-depth understanding of how to leverage emerging and existing digital technologies such as machine learning, artificial intelligence, big data and advanced analytics etc. to create an enormous amount of value for the entire enterprise, not only the finance function.
Finance leaders have a holistic view of the entire organization and they understand various performance metrics of every business function. Therefore, they are in a position to lead digital transformation projects for their enterprise by collaborating with other C-suites including CEO, COO, CIO/CTO etc. This collaboration can help maximize the ROI on these projects.
Financial planning and analysis (FP&A) leader should also understand various digital technologies that they can leverage within FP&A function, particularly, the use of big data and analytics including predictive and prescriptive analytics. Technology can significantly enhance the predictive capability by enabling faster response to rapid changes in the business environment.
Here comes the most important pillar of the leadership framework. To execute and bring results, an FP&A leader must be able to influence and lead others by having strong networking skills, close collaboration with colleagues, coordination & effective communication with non-finance business functions and all stakeholders and ability to manage the organization in times of crisis.
As already mentioned, an FP&A leader needs to collaborate with different business functions including sales, marketing, business development, supply chain, IT, HR etc. This collaboration should help achieve strategic alignment among these different business functions and to accomplish strategic objectives of the organization and identify and manage any gaps or misalignment of activities. You can achieve it only via strong public leadership rather than just your technical skills or knowledge.
To climb up to the level of Strategic Finance Leader, strong financial acumen is essential, because you need to understand the strategy and operations of the company and need to connect the dots using the finance lens.
Financial leadership includes strong grip over technical accounting including IAS/IFRS, risk management and compliance, mergers and acquisitions, financial management, financial planning, budgeting & forecasting and integrated financial reporting.
An FP&A leader should be able to integrate financial planning with strategic and operational planning in order to drive the overall business performance that will result in the financial success of the organization.
In conclusion, to become a strategic finance leader, you need to be aware that all pillars of the leadership framework play a vital role in your overall success. It’s hard to achieve the world-class level of strategic finance leadership without improving all of the six areas mentioned above.
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