James Myers

James Myers is the founder and CEO of FP&A Strategy Consulting, helping to accelerate finance transformation resulting in smarter organizations that focus their talent on issues that matter.

James is a thought leader in FP&A and has presented at many Finance summits.  He has also held various finance and operations leadership roles in multinationals such as Dell and Nokia and has clients such as Hewlett Packard Enterprise. 

James holds advanced degrees in finance and accounting and is a qualified Chartered Accountant.  In his spare time he is also a Co-Program lead for the Silicon Valley Startup Leadership Program and runs the Silicon Valley Power BI User Group.

 

 

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Could FP&A help your company survive a downturn?

By James Myers, Global Finance Executive and Finance Transformation Consultant

FP&A Tags: 

Companies reducing the size of their Financial Planning & Analysis (FP&A) finance teams are cutting valuable resources in the misbelief that is not a priority. That’s untrue. So what’s the role of FP&A in today’s company anyway?

Our worlds are moving at hyper speed, so to be successful we need to focus on our core mission. In FP&A this mission is to help organizations accumulate new knowledge faster than their competition. 

“In the information-age the organization that can most effectively accumulate new knowledge and leverage that insight to make better decisions wins.” Barry O’Reilly

FP&A is the winning strategic player for fast moving companies. In reality, this mission has become obscured, so first, you must take time for reflection and then re-evaluate your direction. More than surviving the downturn, it is time for action. FP&A can lead when you focus on:

Three Principles of FP&A

  1. ACTIVE PARTNERSHIPS: Take a more active business partner advisor role when converting your company’s strategy into an action plan
  2. PROACTIVE RESOLUTIONS: Answer business problems that are aligned to the plan and that action can be taken on, don’t focus on solutions looking for a problem
  3. CHANGE THE GAME TO WIN: Use the insight and data to help change the course of your company by influencing the strategy to a winning one based on factual data

The winning FP&A Value Cycle© is a framework to create huge value within your organization. Your FP&A team are the intersection of 3 key elements: Strategy, Business and Data. They create momentum between each intersection, driving the cycle forward. 

To win in today’s economy, a company must learn and take action faster than their competitors! FP&A is truly a forward-looking part of the organization. Together, we will drive the cycle.

FP&A value cycle

1. ACTIVE PARTNERSHIPS

“A strategy that fails to define a variety of plausible and feasible immediate actions is missing a critical component” Richard P. Rumelt (Good Strategy Bad Strategy: The Difference and Why It Matters)

FP&A is a consulting support function to the organization’s business leaders. Being a business partner and building a plan is not new; being a leader is. The first step in planning is to start with strategy and translate it into actions vs. sending out a slew of excel spreadsheets! Being able to translate the vision of the company’s direction with FP&A is often difficult, but rewarding. Not building a plan that is aligned to it will be disastrous. Think of the strategy as a beacon and the plan is the instructions on how to get there. For FP&A having a deep understanding of the strategy and vision and translating that into a plan that is aligned to all the aspirations of the company is critical. 

2. PROACTIVE RESOLUTIONS

Deep understanding of the business problem is time well invested – i.e. what is the problem, who has this problem and the value that will be gained from solving it (this last one is often left off). The VALUE is the key to getting the resolution! 

Once the strategy has been translated into clear instructions, it’s time to get to work solving some of the known unknows – the things we know we don’t know. Techniques like design thinking, customer discovery interviews and 5 Whys, are all great tools to gain deeper understanding of organizational problems and their associated value. This will be seen as proactive by leadership and embraced as a solution. Unfortunately, what I often see is teams creating endless reams of data and dashboards with no real understanding of the business problem they are trying to solve or the value they are generating from this insight. 

EXAMPLE:  Target, a US retailer.  In early 2012 their strategy was to provide long-term value to guests. This strategy was translated into goals and targets and through that process, the business asked the question, who are Target’s loyalist long term guests. Through analytics, it was found that parents to be were the most loyal long-term guests

Notice the direction of the datawe started with the strategy and moved into business questions, not from the data. Often when people have too much data, they start from the data to figure out the answer and generate reams of reports that solve no problems. 

Target has reams of data on their customers, and it turns out, through predictive analytics they can predict with 80% certainty what trimester you are in. Armed with this information it becomes very easy to target certain customers with coupons, and they were able to grow from $44 billion in 2002 to $67 billion in 2010 3.

3. CHANGE THE GAME TO WIN

Armed with the new insights we have an opportunity to influence and drive the winning strategy. Generating insight that drives the business is great, however to make a longer-term impact we need to complete the cycle.  These insights must be fed into the strategy - this is the most critical part. Once the insights are generated, the only way to incorporate that knowledge back into the cycle is to influence the strategy that in turn influences the plan and in turn influences the insight. For Target we can see how the strategy evolved over time as they realized the power of driving customer insight and in 2015, their strategy evolved to: Target will create a more guest-centric experience. For a company to grow smarter, FP&A must become more forward looking. 

In order to survive and thrive, FP&A must begin to leverage the FP&A Value Cycle© for continued growth!

References:

1.  The most important metric you’ll ever need – Barry O’Reilly

2. Good Strategy Bad Strategy: The Difference and Why It Matters

3. Forbes - How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did

4. Target’s 2011 annual report

5. Target Shares Roadmap to Transform Business

James Myers is the founder and CEO of FP&A Strategy Consulting, helping to accelerate finance transformation resulting in smarter organizations that focus their talent on issues that matter.

James is a thought leader in FP&A and has presented at many Finance summits.  He has also held various finance and operations leadership roles in multinationals such as Dell and Nokia and has clients such as Hewlett Packard Enterprise.  James holds advanced degrees in finance and accounting and is a qualified Chartered Accountant.  In his spare time he is, also a Co-Program lead for the Silicon Valley Startup Leadership Program and runs the Silicon Valley Power BI User Group.

LinkedInwww.linkedin.com/in/jamesmyersw

 

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The Top Three Recommendations for Mastering FP&A Dashboards

By James Myers , Global Finance Executive and FInance Transformation Consultant

Dashboards have become a powerful tool for FP&A to share insight and gain respect. When designed correctly, they deliver a clear message on what’s working and what’s not, and the actions to take to fix the issue. Technology now enables us to create dashboards in minutes, allowing us to share information in ways we could never before…you must leverage this technology! The big question has moved from “How do we create dashboards?” to “How do we harness this powerful tool to drive business behaviour?” Do it right and you win the day for FP&A!

Why are dashboards so important?

  • They make complex things understandable
  • They are excellent communication tool to Upper Management
  • The help with business alignment driving behaviour in various directions
  • They can be interpreted at a glance – executive can consume volumes of insight quickly and don’t have to page through endless reports and PowerPoint presentations (which they never do)
  • Makes data accessible to everyone (access dependent) in a user-friendly on-demand way

Without a focused strategy, most dashboards have:

  • Too many metrics making it difficult to decide what’s important
  • Too many messages in each metric, making it difficult to interpret
  • Conflicting metrics which result in internal conflict
  • “Vanity Metrics” that give “the rosiest picture possible” but do not accurately reflect the key drivers of a business.
  • Poor user experience making it hard to access the data
  • Low Adoption – “But, no one using the dashboards as the provider of no or limited value” (my personal favourite example)

In my experience, my top 3 recommendations for improving the quality of your dashboards are:

1.      Simplify

2.      Measure adoption

3.      Actions

1. Simplify

“The ability to simplify means to eliminate the unnecessary so that the necessary may speak.” - Hans Hofmann
Usually, there is so much noise created by dashboards it’s impossible to figure out what’s important. Having it focused on fewer metrics than more is the key to a successful dashboard. Reduce the number of metrics down to about 3 or 4 to have an impact. 

To be able to determine the most effective metrics requires a deeper understanding of what drives the most value in an organization. This can be determined by talking to key stakeholders - understand what decision they need to make and the information they need. For a more encompassing solution, you will need to start with the strategy and work backwards: understanding the actions derived from the strategy; the drivers of these actions and ultimately the measures for success that will drive these actions

2. Adoption 

"We must learn what customers really want, not what they say they want or what we think they should want." – Eric Ries
Adoption is the leading indicator of the value you are generating. Frequency and time of use are key to determine the success. The biggest challenge is making sure that your dashboard is solving a problem or adds value to a stakeholder. By using design thinking and empathizing with your users is the first step in improving the quality of your dashboards. 

Take time out to put yourself in their shoes and understand what the real business problems are that you are trying to solve. Once the dashboard has been developed, the next step is to continue the feedback loop and have an iterative improvement cycle. Continue to measure your adoption metrics and for any unexpected changes do a deeper dive – speak to stakeholders to determine why their frequency has increased/decreased after a new improvement. 

3. Actions

“Action is the foundational key to all success” – Pablo Picasso
Metrics that help drive actions are worth more than those "Vanity metrics" that just tell you where you are. Actionable metrics reflect the key drivers of the business and lead to informed business decisions and subsequent action. Actionable metrics need to be driver based and the more you understand the drivers of your business, the easier these will be to create. At all costs, avoid the trap of “Vanity metrics”. IT’s tempting to use measurements that give “the rosiest picture possible” (Eric Ries) but they do not accurately reflect the key drivers of a business. Things like the vaulted Revenue Performance – tell us where we are, but provides no clear guidelines on how to increase revenue or mitigate the risk of a decline!

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Research: Successful CFO’s empower FP&A teams to be more strategic

By James Myers , Global Finance Executive and FInance Transformation Consultant

The survey found that the rapidly changing landscape has forced change at the C-suite in FP&A. To be successful and keep up with the rate of change, they need their FP&A teams to step out of the data collection and validation and play a larger more strategic, customer facing role.

This is the conclusion of the recent FP&A Empowerment Survey (Nov 2017). I’m honored to have been part of this watershed in-depth research project conducted by some of the current thought leaders in FP&A. The team included Ernie Humphrey and Larysa Melnychuk. The survey gained insight into why FP&A teams are struggling to make a real business impact. The solution requires reassignment and a refocus to strategic vs. being overloaded with data and outdated tools.

Fact Confirmed: FP&A teams are not optimized as they are spending too much time on low-value activities.

Fact Confirmed: FP&A as a function is underinvested in technology and repetitive processes are not automated.

Discovery: The value of FP&A is not fully understood by many Top Executives making the investment in solutions difficult.

We had an overwhelming response to our survey and had a total of 311 respondents with a good mix across geographical, company size and position segments. What was interesting is that these discoveries hold true across all of these dimensions

1. FP&A Teams Aspire to spend more time on strategic activities

On average FP&A professional spend 21% of their time on high-value activities. We defined high-value activities as: Business partnering; strategic support; customer-facing activities and driving actions.  For me this is in line with what I expected – the number one frustration of FP&A professions is by the time they’ve pulled the data together, there is never enough time to provide insight. What was a surprise is how far away we are from where we think we should be: the answer back is we should be spending 48% (Fig 1) of our time on high-value activities. In other words, we need to be spending more than double the amount of time on high-value activities and in the case of more senior roles, this was almost triple the amount of time.

FP&A in my mind should be seen as a consulting function – a function that should be helping the business with data driven decision making. So what is the solution to reducing low-value activities and freeing up the time to be more strategic?

Fig 1:

Time on High

2. The need for Technology investment

Seventy-nine percent (79%) of companies report an upgrade in FP&A technology would empower FP&A to deliver better results.

From my experience this does not come as a surprise – The solution is very simple: free up time by replacing repetitive tasks of data collection and validation (which together account for 51.5% of analytics time) by technology that can automate all of this. In practice this is never that simple - business and data in finance is a little bit more complicated. Before investing blindly in technology, you will also need to look at the problem more holistically – what is the problem that needs to be solved and what are the impacts on People, Process and Technology. This is why investment in FP&A costs so much – there needs to be a lot of upfront work in not only bringing in the right technology solutions, but also investment in time to improve the process and manage the change. This is why you often hear of ERP implementations failing, the promise is they will halve your workload, but by the end you find its doubled.

So investment in FP&A is expensive, so how do we get the support we need to make these investments?

Fig 2. Driving transformation required investment in Technology, Process and People

3. The value of FP&A is not clearly perceived or understood by top executives

The value of FP&A is not clearly perceived or understood by top executives

A staggering twenty-seven percent (27%) of respondents conveyed that their companies do not view FP&A as an area of strategic investment. Even more surprising was fifty-six percent (56%) of respondents conveyed that their companies don’t think that FP&A has an impact to the bottom line

So to frame the problem: To free up time for FP&A to be more Strategic, we need investment in Technology, People and Processes, but if the perception of FP&A is low then investment will be difficult to come by. 

When asked what is the biggest barrier to investment thirty-eight percent (38%) of companies reported it was difficult to justify the ROI of investing in FP&A against shorter-term investments in sales or marketing.

Conclusion

To be successful, the C-suite needs to commit to reform, investment and respect for FP&A. The information age is forcing the office of the CFO into a more data driven, strategic role away from the back-office accounting role of the past. For CFO’s to be successful, they need their FP&A teams to step out of the data collection and validation and play a larger more strategic, customer facing role. To enable this transition there needs to be the investment in tools and solution, but more importantly there CFO’s and FP&A teams as a whole need to be able to sell the value they are generating!

Download the full report

 

James Myers is the founder and CEO of FP&A Strategy Consulting, helping to accelerate finance transformation resulting in smarter organizations that focus their talent on issues that matter.

James is a thought leader in FP&A and has presented at many Finance summits.  He has also held various finance and operations leadership roles in multinationals such as Dell and Nokia and has clients such as Hewlett Packard Enterprise.  James holds advanced degrees in finance and accounting and is a qualified Chartered Accountant.  In his spare time he is also a Co-Program lead for the Silicon Valley Startup Leadership Program and runs the Silicon Valley Power BI User Group.

LinkedInwww.linkedin.com/in/jamesmyersw

 

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Presenting FP&A Strategy’s Data Maturity Model to Accelerate your Finance transformation

By James Myers, Global Finance Executive and Finance Transformation Consultant

It’s the middle of the year and it’s time to take charge of your “data destiny” before the budgeting and planning season starts. What exactly is your data destiny? No, it’s not the new Netrunner card game where the objective is to control all the data in the Universe.

It’s understanding how you can leverage all your internal and external financial and operational data to give you a strategic advantage. Relevant data is the key to understanding it all, but too often this is disbursed throughout your organization. 

In 2017, Globally, 39% of all CFO’s are pursuing a significant upgrade in their company’s information, data, and communications systems (1). This trend is real and I’m already seeing companies moving swiftly to take advantage of new BI trends and hire more data-centric talent into their Finance teams. More than a “trend”, it’s a “shift”.

Why is this Tectonic Shift in Data happening Now?

  • Data quality issues - Multiple data sources require manual aggregation & consolidation which are prone to error resulting in a debate about the accuracy of the number and not the insight
  • Timing to insight - Low frequency and the length of time it takes to receive the insight, limits the ability of stakeholders to take early corrective actions
  • Data is offline – adjustments and data manipulation are done in offline Excel spreadsheets, usually by one person and no one else knows how it’s done
  • Data hoarders – Data is power and if no one else has it, it makes one important

TAKE CONTROL

Your Data Maturity model

FPA’s data maturity model is a step-by-step process to help you move along the value/maturity curve until you achieve your ultimate goal of game-changing data analytics.

Step 1: Aggregation = Single source

Having all your data in one place is the first major step toward data nirvana. This often requires a lot of IT heavy lifting, but it doesn’t have to be. There is new technology out there that will help, but my advice is to start small. Find the most critical data and focus on that – run through all the steps before on boarding the next set of data. This will enable you to prove out the solution and demonstrate the value quickly – Once you start adding value it will be easier to find more investment.

Step 2: Accuracy = Strong executive support

This step is all about agreeing on terminology and rules. This part is heavily reliant on all the stakeholders agreeing to a single naming convention; methodology and taxonomy – it’s all about standardization. In mature large companies, this can be one of the hardest tasks as it often requires change management. To ensure this part succeeds you will need to have strong executive support. You will also need to validate your data and bring the offline logic into the system. Accuracy is key as there is nothing worse than spending more time debating numbers as opposed to their meaning. You will need everyone bought into the idea that your single source of data is the only source otherwise you will fail in the next steps

Step 3: Access = Mastering dashboards

This is typically the easiest because of the development of powerful BI tools, but unless there is strong governance it can easily get out of hand (see Mastering Dashboards to Build Value). Good dashboards are designed to drive strategic initiatives into the company and to ensure users can identify issues quickly and know what corrective actions to take. Try to avoid dashboard design that results in: confusion; groups competing against each over or more common just being ignored. Security is key at this stage – making sure that the right users have access to the right data at the right time. 

Step 4: Actionable = Think!

Building dashboards that keep us informed are interesting but don’t add a whole lot of value. Take revenue for example – this is a typical metric you will see on any dashboard e.g. how much have we booked to date; how are we performing to targets or year over year growth. What we really want is to drive actions into the organization. The best way to do that is to focus on the underlying drivers of revenue e.g. what is your pipeline conversion rate; what pipeline coverage do you have or what is the impact of your marketing promotions.

Step 5: Accountability = Support

The key to driving insight is starting with the business problem. Too often I see people bombarding their stakeholders with data, normally in the form of 70 page PowerPoint decks with detailed tables and 11pt type. That only alienates. Take a step back and take the time to understand your stakeholder and what’s really important to them. Spend time on understanding the drivers behind this and create dashboards that give your stakeholders key insights that help them identify the outcome of their actions. You’ll know when this support is working when they come back and ask for more.

YOU HAVE A DATE WITH DESTINY

This is the time for data leadership. Discerning and communicating it in a meaningful way to the organization is literally the most important job you will ever do! Use FP&A’s Data Maturity Model to accelerate your FP&A transformation. The time to get ahead of this is right now.   

 

Footnotes:

1. THE CFO ALLIANCE - 2017 CFO SENTIMENT STUDY: 39% of respondents reported they will be pursuing a significant upgrade in their company’s information, data, and communications systems in 2017, up from 29% in 2016

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FP&A Value Cycle – Data Leadership Strategy

By James Myers , Global Finance Executive and FInance Transformation Consultant

Never before has an FP&A professional had so much opportunity to change the course of history.  Uncertainty is becoming the norm and companies are struggling to be nimble or have become too dependent on the past to create the future and find it difficult to adapt to change. While “disruption”, the latest buzz word, we are seeing the more nimble companies winning, but by definition there also have to be losers. How does your company navigate these uncertain times? 

We view the role in FP&A as a value cycle, giving us the framework to create real value.  We offer strategic support to an organization.  We are now able to help guide the organization in line with its vision.  We lead insight generation and are able to align business to the data and understand what impact it has on the business and finally we create value through insight allowing us to guide the strategy of the business forward.  FP&A professionals offer a high value output through strategic support and insight, creating value from data.

Ultimately, the amount of cash a business generates dictates its success, so finance always has a seat on the executive team. Now we are seeing the role expand beyond the traditional back office accounting support function into something more - we are seeing finance teams being closer to the action, empowered to be creative and suggest new ideas.  

The great news is that all finance professionals can use “validated learning” 1 to impact business decisions, supporting them with data, then guiding their organization through times of uncertainty. FP&A professionals are becoming the strongest influencers, outside the CEO. The cycle of Strategic Support, Insight Generation and Value Creation drives business direction, turn by turn, towards their ultimate goal

As FP&A professionals, high value output should be our ultimate objective and to really drive the value in an organization we must focus on 3 main areas: Strategy, Business and Data. 
The challenge is these are often in addition to all the other requirements in our job description including: Consolidations, Budgeting, Forecasting and Monthly Reporting.  Yet, as we accomplish these tasks at hand, we need to also drive forward the value cycle as this is where the real business value lies.

  • Strategy – the direction of the company including the long term vision and shorter term missions with tactical goals.
  • Business - the partner and customers externally and Sales and Marketing organizations and go-to-market teams internally.  
  • Data – the data that is held in an organization internally or external data sources.  In larger organizations there may be an operations or data analytics group that manage this data, but it can be found in many different departments. 

Between Strategy and Business, FP&A’s role is to lead as a strategic partnering. Strategic partnering is taking the agreed strategy and helping the organization translate this into action, ultimately drive business success and shareholder value in line with the vision.  Finance teams have always played a role here especially as they have adopted an independent advisory role and a custodian of the company. Remaining independent from the rest of the business can mean that ideas and strategies are fresh but aligned to the vision. In my experience, a key part of decision-making is looking at new proposals from all angles. Finance teams must remain independent to ensure that they have a distinctive perspective.

Between Business and Data – we have insight generation. The role here is working to translate business needs into queries.  How often do you get a request from the business to pull a set of numbers together, and this inbound request from the business doesn’t have many details or even make sense.  It’s our role to question the request and understand the true need, so we understand the drivers and are better equipped to find the right data to answer the questions.  Here I often go through a process of problem diagnosis, customer analysis and data identification.  A great tool to help you with this is the “5 Whys” technique - The “5 whys” technique was created by the Toyota Motor Corporation and is an iterative question-asking technique used to explore the cause-and-effect relationships underlying a particular problem.

Finally, value creation, the key learnings that help guide a business through uncertainty - decision are now supported by data.  These learnings can ultimately determine the direction of the business, its vision, mission and tactical goals.  Value creation often takes the form of a data visualization, but it is the wisdom in knowing that only once we understand what question we are trying to answer and figuring out the right data to answer that question, will you be able to interpret the insight into business direction.  Too often I see in FP&A professionals creating reams of reporting without thinking “What question I am trying to answer?” or “What action do I hope the business will take as a result of my interpretation?”.

In the perpetual cycle Value Creation keeps the spin going - Between Big data and Strategy is the sweet spot for FP&A. Now, successful companies take a more analytical approach, moving away from a “Gut Feel” to a “Validated Learning” decision, as Eric Reis calls it. With validated learning, can we influence the direction and strategy of a division, business groups or enterprise?  Yes.

The Value Cycle is our approach at redefining FP&A’s role in the organization. To take a leadership position influencing the direction and outcome.  It is our role to help facilitate this process by taking the insight that we have generated and converting this into more long term strategic thinking. The place where true wisdom lives.

  1. http://theleanstartup.com/principles
  2. http://en.wikipedia.org/wiki/5_Whys
     

James Myers is the founder and CEO of FP&A Strategy Consulting, helping to accelerate finance transformation resulting in smarter organizations that focus their talent on issues that matter.

James is a thought leader in FP&A and has presented at many Finance summits.  He has also held various finance and operations leadership roles in multinationals such as Dell and Nokia and has clients such as Hewlett Packard Enterprise.  James holds advanced degrees in finance and accounting and is a qualified Chartered Accountant.  In his spare time he is also a Co-Program lead for the Silicon Valley Startup Leadership Program and runs the Silicon Valley Power BI User Group.

LinkedInwww.linkedin.com/in/jamesmyersw

 

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Author's Articles

February 20, 2019
FP&A Tags:

Companies reducing the size of their Financial Planning & Analysis (FP&A) finance teams are cutting valuable resources in the misbelief that is not a priority. That’s untrue. So what’s the role of FP&A in today’s company anyway?

September 13, 2018
FP&A Tags:

Artificial intelligence (AI) is now becoming a reality in Finance. AI is already impacting our everyday lives – through the adverts we see on Facebook, the shows selected for us on Netflix to the Google automated assistant being able to book meetings for us. 

May 29, 2018

Dashboards have become a powerful tool for FP&A to share insight and gain respect.  In this article, the author shares his top 3 recommendations for improving the quality of your dashboards. 

January 25, 2018

The information age is forcing the office of the CFO into a more data-driven, strategic role away from the back-office accounting role of the past. For CFO’s to be successful, they need their FP&A teams to step out of the data collection and validation and play a larger more strategic, customer facing role.

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