Andrew Codd

Andrew Codd is the producer of the Strength in the Numbers Podcast which interviews real finance practitioners to break down their hard-won lessons and deconstruct their practical methods that work on the job and which you won't typically find in textbooks or exams so that we create more influential finance professionals worldwide who solve meaningful problems for their organisations and in return have fun, rewarding and successful careers in finance.

 

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Two Ways FP&A Professionals can build trust

By Andrew Codd, Founder and Lead Producer The Strength In The Numbers Show

The author Andrew Codd is the producer of the Strength in the Numbers Podcast which interviews real finance practitioners to break down their hard-won lessons and deconstruct their practical methods that work on the job and which you won't typically find in textbooks or exams so that we create more influential finance professionals worldwide who solve meaningful problems for their organisations and in return have fun, rewarding and successful careers in finance.

Andrew Codd's LinkedIn account: https://www.linkedin.com/in/andrewcodd/

The great thing about being in FP&A is that we get to observe in real life and hear stories about many interactions, good and bad, between many colleagues across the business. I’ve even tried many different approaches to building trust myself but the best way I’ve seen of describing the process and practically implementing it in a way that works is actually based around some ideas from “The Speed Of Trust” written by Stephen M. R. Covey where he represents building trust like a well-rooted tree born of two dimensions: character and competence (see image of a tree above). Character includes your integrity, motive, and intent with people. Competence includes your capabilities, skills, results, and track record. 

Both dimensions are vital. For instance if the competence, which is represented by the branches, leaves and fruit of a tree above the ground is strong, because we have a known track record of producing accurate and complete reports as well as supporting some successful decision making, but our character is weak because we don’t keep our commitments or others perceive we have a hidden agenda then when a storm comes along the tree will be blown over. We will not have built sustained trust.

Similarly, let’s imagine a colleague who is sincere, even honest, would you trust that person fully if he or she doesn't get results or have the skills to deliver the required outcomes? 

How to build trust

Step 1: Is a bit like the airline metaphor when the oxygen mask drops in the event of a loss in cabin pressure and you have to tend to yourself first before helping other passengers. You’ve got to start with yourself. 

Step 2: Is to find opportunities to build your own credibility by balancing each of the 4 Cores of Credibility: Integrity, Intent, Capabilities, and Results. As we all know in FP&A a person's reputation and brand is a direct reflection of their credibility, and this precedes them in any interactions or negotiations they might have. When our credibility and reputation are high, it enables us to establish trust fast. Recall the trust equation from the last article speed goes up, the cost goes down and results get better. 

Luckily there are 13 behaviours that have been identified in high-trust leaders around the world that act like force multipliers in building and maintaining trust. When you adopt some or all of these ways of behaving, it's like making deposits into a "trust account" of another party as I wrote in my book:

  1. Talk Straight
  2. Demonstrate Respect
  3. Create Transparency
  4. Right Wrongs
  5. Show Loyalty
  6. Deliver Results
  7. Get Better
  8. Confront Reality
  9. Clarify Expectation
  10. Practice Accountability
  11. Listen First
  12. Keep Commitments
  13. Extend Trust 

Step 3: Is that you’ve got to begin to allow yourself to trust others, because if you don’t trust other people how can you expect them to trust you? In effect, you’ve got to give to get.

And these are all characteristics demonstrated by the guest mentors on our Strength in the Numbers show. The reason why they’ve become so influential as FP&A professionals and gone on to solve meaningful problems for their organisations is that they practice these behaviours day-in, day-out, and it’s because they have built up their credibility and the trust others have in them by having great character, built on integrity and no hidden agendas, that’s why their willing to freely share with you their hard-won lessons on the show in a way you can practically implement in your work, as well as continually working on improving their capabilities and delivering a track record of results. 

So what techniques would you recommend to build trust with others and increase your impact in the business? Or what steps would you take yourself?

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A Bigger Role For FP&A – Insight Brokers

By Andrew Codd, Founder and Lead Producer at The Strength In The Numbers Show

The author Andrew Codd is the producer of the Strength in the Numbers Podcast which interviews real finance practitioners to break down their hard-won lessons and deconstruct their practical methods that work on the job and which you won't typically find in textbooks or exams so that we create more influential finance professionals worldwide who solve meaningful problems for their organisations and in return have fun, rewarding and successful careers in finance.

LinkedIn account: https://www.linkedin.com/in/andrewcodd/

There’s been a steady move towards having more business partner roles in FP&A, similar to other support functions like IT and HR, but what does this all mean for FP&A? 

The good news is that our traditional FP&A roles are still necessary, the advance towards business partnering is more simply a reflection that business expectations have shifted. It’s no longer about us explaining the variances, what happened last month or last quarter. That’s a minimum expectation on us.

The core skill set that we have in analyzing data and sensing the commercial implications reflects that we are being called upon to partner with the business more often by providing them with the deeper analysis of what the data actually mean.

However, in some instances these heightened business partnering expectations have meant that FP&A as a group may now lag behind marketing, sales and other customer-facing functions that are investing widely in digital technologies to capture valuable data that are less focused on tangible assets and more directed towards intangibles like customer satisfaction; partner relationships; the quality of business processes and the reputation of their brands. Notice how none of these data-points are financial.

Naturally, some of you may be thinking or asking whether FP&A will get left behind?

As with any shift in expectations, there’s always a chance we can get it wrong, although a key privilege we in FP&A have is that we generally already have, or can more easily gain access to, a wide and inter-connected view across the enterprise. So do I believe we have the potential to still contribute towards our partners’ enhanced expectations and our enterprises’ success? Of course, but to do so will mean that we may have to play an even bigger role, that of the insight-broker.

This role has three parts:

Raw information

From our FP&A position we broadly understand its business model, data structures and sources, so we’re ideally placed to go hunting down the necessary data and analysis required to contribute valued insights for successful decision making.

Analysis & insights

Even though we may not have a credible claim to provide all the information needed by our partners in this digital age, we do have an enterprise-wide overview and the required skills to work with diverse internal stakeholders to certify that they’re assembling and analyzing data in the most suitable ways to improve performance. Our data-orientation and quantitative skills allow us to engage in qualifying new data sources as well as involve the language of money to better support decision making and ultimately build better business models that survive the present and thrive into the future.

Benchmarking

As insight-brokers we can liberate these data for application and benefit elsewhere in the business. We can identify areas that work well and benchmark these against others that could operate more effectively. By brokering and facilitating insights between partners we can contribute our overview and professional objectivity as part of these collaborative conversations, to safeguard and enhance the quality of data-driven decision-making.

I end this post with an observation from outside our FP&A profession that today’s most competitive & sustainable business models are less based on physically installed fixed assets but instead come from platforms of insights that go deeper into our intangibles, founded upon our information, human and organisational capital. The often quoted Ocean Tomo Study estimates that 87% of the S&P500's market value from 2015 was due to intangibles, a 70%pts growth over the last 40 years.


FP&A has already played our part in supporting this shift, to continue playing a relevant role today and into the years ahead we will need to play the bigger role of insight broker so that our organizations and our profession can reach their potential.

So do you think FP&A have a bigger role to play? What tip would you recommend to others that increases our relevance today and into the future?
 

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4 Steps to becoming a more valued FP&A professional

By Andrew Codd, Founder and Lead Producer The Strength In The Numbers Show

The author Andrew Codd is the producer of the Strength in the Numbers Podcast which interviews real finance practitioners to break down their hard-won lessons and deconstruct their practical methods that work on the job and which you won't typically find in textbooks or exams so that we create more influential finance professionals worldwide who solve meaningful problems for their organisations and in return have fun, rewarding and successful careers in finance.

Andrew Codd's LinkedIn account: https://www.linkedin.com/in/andrewcodd/

Within any organisation you’ll find some groups of people who are the most well-known and highly valued. Given there are many functions, groups, roles & people within our organisations today how can FP&A become, and be seen to be more valued?

We can find the answer by distinguishing how these organisations distinguish between the people who they consider as vital as opposed to functional. In fact Daniel Priestly in his book Key Person of Influence summarises it well when he notes:

Vitality is more valuable than functionality. You can’t get the results you want without a vital person because they add something a functional person doesn’t have.

The Difference between Functional & Vital

Generally, if you begin to look around Finance organisations today you can quickly start to see the functional areas, they’re the ones being downsized, off-shored or gradually replaced by robotics. In effect they’re easily replaceable, a functional person is one possible solution to the performance of a process; if there’s a cheaper, more efficient or effective way of getting it done, the organisation will assign lesser value to that person. Harsh but true!

How many colleagues do you recall within General Accounting, Payables, Receivables, even some analysts that have been great at what they do but regardless have either been replaced by one of the options above or not backfilled at all? They’re also likely to be the first people to be let go following a merger or business transformation. Functional does the job, but functional is still interchangeable.

On the other hand, you can recognise vital people in these organisation’s, they’re generally the ones who have roles created for them, perhaps crossing more than one function, with objectives expressed in terms of key success factors as opposed to a generic job description. They’re there to deliver specific results as opposed to being aligned with any particular process. A lot of (but not all) FP&A business partners, Commercial FP&A managers, and FP&A directors tend to fall in these categories. The job requisitions for vital people are increasingly the ones that are getting signed off for recruitment, offer relatively higher compensation plus more flexible benefits.

I also suggest there are two useful definitions for vital as they apply to people in organisations:

One definition means ‘hard to replace’ and the other means ‘life-force’. Vital people see themselves as being the ‘hard to replace life-force’ of a project or initiative.

So how do we ensure that we either stay vital or even become considered as vital to our organisations?

Steps to Becoming Vital

STEP 1:

Look around your organisation and identify who you regard as a vital person, what is it about them that you feel makes them so vital?

STEP 2:

Now identify someone who you consider as functional. Similarly, why do you think of them as such?

STEP 3:

Draw a simple T-account, and list out your thoughts to Step 1 on the Credit (Vital) side and do likewise for Step 2 (Functional). Here's my attempt below:

 

WITHIN FINANCE DIFFERENCES BETWEEN
Functional Vital
Turns up to work worn out Shows up everyday energised
Competent when executing a set of prosesses to defined standards Activities aligned to the result or outcome, cares less about the how
Does the job as specified or directed Asks questions about 'why'  we do things this way and is self-directed
Learns to get better at to the processes and they make marginal improvements Understands & anticipates needs of partners & managers 
Sometimes may reactively solve problems Proactively finds problems to solve
Trends to look at the past Helps partners and managers make better decisions about the future
Fearful that someone might come along who can do things better than they can Feel as if they've mastered a specific area and hard to replace them
Keeps-the-score Makes-the-right-score  
Only sees black & white rules & standards, without acknowledging any grey areas Appreciates the intangibles (People, Processes & Technology) and different shades of grey 
Thinks about getting a job done Thinks in terms of Results and increasing Value 
Has narrow network of colleagues Seems to know & get access to the main decision-makers in the organisation
Stays up to date with the standards Has their own unique take on things
Concerned about being downsized / outsourced Concerned about creating value
Associates with people who reaffirm that life is tough Likes to be seen by their contemporaries & likes challenging debate & stimulating ideas
Concerned about any technology could replace the tasks that they know how to complete Sees any new people who show up are potentially new partners, not competitors
Scared to take a holiday as worry about what will happen while they are gone Loves vacations and appreciates as a time to get re-energised and to stimulate ideas
Prefers to take more for themselves, reluctant to acknowledge help of others Demonstrates humility and shares credit with others who helped deliver the outcome
Complains overlooked for promotion Happily engages in retraining themselves and evolving with changing trends
Analyses what has happened Figures out what might happen & advises the best course of action
Comforted by colleagues who don't push them or inspire them to step up  Open to people pushing them and aiming for a new level to play at

 

STEP 4:

Finally, compare and contrast your answers, if you wish to become more valued what could you be doing more of to be considered as vital and increase the credit side of the account. And on the other hand what could you be doing to be less functional and so lower your debits?

 

What do you choose?

Naturally, a useful outcome from drawing these comparisons is that now, having read this article, you can choose to decide whether you want to become a more functional person or a vital person. You can focus on being busy or on getting results. You can choose either to take a stand for the way things are done or the way things could be done. Only you can decide what you choose to do & how you show up, and only you can be the judge of your own decision.

For those of you who want to move more in the vital direction, I strongly encourage you to examine FP&A as a platform as it offers a great opportunity to drive better outcomes for organisations. Valued FP&A professionals are those who help managers by asking thoughtful questions of all the necessary stakeholders, brokering and linking up points, adding a considered commercial overview and financial angle, to ultimately drive better outcomes for them and their businesses.

So what are your recommendations for becoming a more valued FP&A professional?

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The One Big Value Driver that FP&A’s has Always Known About

By Andrew Codd, Founder and Lead Producer The Strength In The Numbers Show

The author Andrew Codd is the producer of the Strength in the Numbers Podcast which interviews real finance practitioners to break down their hard-won lessons and deconstruct their practical methods that work on the job and which you won't typically find in textbooks or exams so that we create more influential finance professionals worldwide who solve meaningful problems for their organisations and in return have fun, rewarding and successful careers in finance.

LinkedIn account: https://www.linkedin.com/in/andrewcodd/

FP&A teams have been growing in popularity ever since Eugene Moynihan introduced first wrote about them in "The Financial Analyst and the Computer," Financial Analysts Journal, in 1964, because they have always known about one big thing that drove and accelerated value better than anything else, which other functions and teams sometimes forget. This is why organisations then, and even those today, need a FP&A team. So what is this one big thing? 

Trust! High levels of Trust drive value. There’s even a trust equation but before we get into that I’d like you to think of someone you work with or have worked with, with whom you have a high level of Trust. What first impressions spring to your mind when you ask yourself: 

  • What’s it like to work with him/her? 
  • What’s it like to communicate with him/her? 
  • How fast can you get things done with him/her? 
  • What kind of results do you achieve together? 

I’d also like you to think of a second person, only this time, you may figure out where this is going, with whom you have a low level of trust or where it’s not where it needs to be. What first impressions spring to your mind when you ask yourself: 

  • What’s it like to work with him/her? 
  • What’s it like to communicate with him/her? 
  • How fast can you get things done with him/her? 
  • What kind of results do you achieve together? 

Can Trust be Quantified by FP&A 

Now how would you describe the differences in the relationships? Night and Day? Successful or Unsuccessful? Eager to work with one of them but slow to work with the other? In effect, we’ve just put a qualitative value on the impact of trust but can you put a Quantitative or Financial one to build out the business case for high trust? 

Well for many, trust is intangible and that that means people don't really know how to get their arms around it. But the fact is some researchers have attempted to estimate the costs of low trust, in effect, suggesting they are like a very real tax, and likewise the dividends from being a high trust organisation are similarly quantifiable. 

Taxes of Low Trust 

In 2004, one estimate in the United States put the cost of complying with federal rules and regulations - put in place essentially due to lack of trust - at $1.1 trillion, which was more than 10% of their gross domestic product at the time. A further study conducted by the Association of Certified Fraud Examiners estimated that the average American company lost 6% of its annual revenue to some sort of fraudulent activity. 

Dividends of High Trust 

Similarly, FTSE Russell discovered if you invested in the publically-traded companies featured on the 100 Best Companies to Work For® list, and each year divested stock in the companies that were no longer on the list and invested in companies added to the list, your returns would be nearly 3x times that of the general market. Furthermore, a 2015 study by Interaction Associates shows that high-trust companies “are more than 2½ times more likely to be high performing revenue organizations” than low-trust companies. 

The Trust Equation 

But even intuitively FP&A have always known that we’ve always had to ensure trust in the numbers, whether financial or non-financial, in order to help decision makers drive sustained profitable growth in our organisations. We’ve always aimed to provide an assurance that numbers are as complete and accurate as they can possibly be, whether reporting them historically or projecting them forward to ensure our enterprises continue as going concerns. In essence these relationships can be represented in terms of an equation: 

When trust goes up, cost goes down, and speed goes up resulting in a “high-trust dividend” which enables our organisations to succeed in their communications, interactions, and decisions, and to move with incredible speed. 

By contrast, when trust is low, in a company or in a relationship, it places a hidden "tax" on every transaction: every communication, every interaction, every strategy, every decision is taxed, bringing speed down and sending costs up. My experience is that significant distrust doubles the cost of doing business and triples the time it takes to get things done. 

So given we understand there is a business case for trust we next need to know how to build it. I shall do this in a follow up article but it is also related to why we bring guest FP&A mentors onto our Strength in the Numbers Podcast, that have a credible track record in FP&A because they know role FP&A plays in building trust and they share their stories about how they have practically driven value for their organisations. How their experiences can help you become more influential and solve meaningful problems faster and at lower cost, in fact the episodes are free, so you have no excuse to go onto learn some new practical approaches towards having a more fun, successful and rewarding career in FP&A. 

So what techniques would you recommend to build trust with others and increase your impact in the business? Or what steps would you take yourself? 

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How Mowing the Lawn Can Help FP&A Gain Better Influence

By Andrew Codd, Founder and Lead Producer The Strength In The Numbers Show

The author Andrew Codd is the producer of the Strength in the Numbers Podcast which interviews real finance practitioners to break down their hard-won lessons and deconstruct their practical methods that work on the job and which you won't typically find in textbooks or exams so that we create more influential finance professionals worldwide who solve meaningful problems for their organisations and in return have fun, rewarding and successful careers in finance.

LinkedIn account: https://www.linkedin.com/in/andrewcodd/

Summer along with the odd rain shower means that for those of us with lawns we find ourselves more regularly mowing them but why do we mow them in the first place and what can that teach us in FP&A about better influencing others? 

The question is important because last week I ended by saying that even when well-intentioned and motivated people are eager to succeed they still face the challenge of understanding where and how to focus their time and effort and so may not necessarily take any action. It’s like they freeze, or worse know they should do something but instead choose to do nothing. And in our organisations, we might see something in the numbers that should be acted upon, a worrying trend perhaps when profits are declining or an opportunity to grasp by finding some unused budget to reinvest elsewhere, but sadly no action is taken. Why?

Human Action

In his book "Human Action", Ludwig von Mises suggested that three requirements must be present for individuals to take action. These are:

  1. a dissatisfaction with the present state of affairs;
  2. a vision of a better state; and 
  3. a belief that they can reach the better state.

So back to our mowing the lawns example, we will mow our lawn only when we are dissatisfied with its present condition and believe it will look better having tended to the job and know how to perform the necessary task.

So similarly if we in FP&A wish our organisations, colleagues, business units, customers, suppliers, and other stakeholders to take action on our advice, or budgetary controls we set out, we simply need to ensure we take them through these three steps. For instance, in recent times decision makers have been bypassing FP&A teams to self-serve themselves with insights because just like on the front lines between organisations and their customers, a decision maker will switch suppliers of decision support when they become dissatisfied with their current supplier and believe another supplier will serve them better and are able to switch. Likewise, managers and employees will subvert controls around travel expenses when they aren’t happy with them, can see a better way and believe they can get around them without getting caught or impacted adversely.

And even within FP&A teams, we see these 3 steps play out with FP&A leaders struggling to keep hold of talented staff and ensuring their teams are continually engaged in adding value to the organisation. Indeed, on one of our podcasts Larysa Melnychuk of FP&A Trends mentioned that in one of their recent surveys:

“In the UK up to 70% of CFOs say this is the most difficult position to fill”

 #070: Forward Looking Finance and FP&A with Larysa Melnychuk, 
Strength in the Numbers [18:53]

And whilst our conversation was targeted around attributes, incentives also play an important part for talented FP&A professionals, particularly when FP&A employees become dissatisfied with their current employer, see a better state where their skills are put to more meaningful use or are more appropriately rewarded, then decide to leave their current jobs to move employers or even become solopreneurs acting as financial mentors to other businesses (notice the rise in virtual CFOs for instance).

FP&A Strengths

Now in FP&A, we have a number of strengths that make us ideally positioned to take others, including our own teams, and even individually, through these three steps. If we’re leveraging our broad view of our organisations, our access to data & information, as well as access to decision makers we should be able to identify current states of dissatisfaction (step one). Our training and experience should allow us to translate what a better state looks like in terms of financial outcomes (step two), and even our perceived independence and integrity that comes with working in FP&A, putting the organisation’s interests ahead of our own function’s, should enable us to have some credibility to help foster a belief in our proposals or controls that others will buy into (step three). 

Whilst there are FP&A professionals doing these three steps well, particularly those in more commercial-facing FP&A teams who interact a lot with customers as well as across other functions, a lot of the rest of us are still sitting behind our desks not getting out there, and so failing to interact with others in our organisations. And because we’re not fully utilising our strengths or demonstrating the complete value we can offer them, we are putting ourselves at risk of becoming irrelevant.

Tackling Incentives with the Right Skills

Unfortunately, when it comes to improving the incentives to better influence others it’s simply not the case of leveraging those hard-type technical skills that we’ve been typically trained and certified in, so they won’t be covered in accounting exams or on FP&A courses. They’re more softer, communications-type, influencing, real people and business skills that are becoming increasingly important in our organisations and they are the type of skills we get better at by practicing them again and again. 

And that’s why we bring on guest mentors to our Strength in the Numbers Show, to share with you their stories and hard-won lessons and practically figured out how to leverage their strengths to take others through these steps to contribute more value in and for their organisations. And help you learn how to leverage your strengths in the numbers faster.

So what techniques would you recommend to improve the incentives to influence others? Or what steps would you take yourself?
 

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Author's Articles

January 10, 2019

The great thing about being in FP&A is that we get to observe in real life and hear stories about many interactions, good and bad, between many colleagues across the business.

November 7, 2018

There’s been a steady move towards having more business partner roles in FP&A, similar to other support functions like IT and HR, but what does this all mean for FP&A?

October 17, 2018

Within any organisation you’ll find some groups of people who are the most well-known and highly valued. Given there are many functions, groups, roles & people within our organisations today how can FP&A become, and be seen to be more valued?

September 18, 2018

FP&A teams have been growing in popularity because they have always known about one big thing that drove and accelerated value better than anything else, which other functions and teams sometimes forget. This is why organisations then, and even those today, need a FP&A team. So what is this one big thing? 

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