Part 2 of the 6-part “FP&A Business Partnering” series on how FP&A professionals can improve their effectiveness by establishing strong working relationships with business stakeholders.
In my last blog, we discussed what FP&A business partnering is and the focus you need to be successful. Now we’ll turn to how to implement the concept in your finance function, and more specifically, with your FP&A teams.
Before we examine some of the implementation options, it’s important to state that you cannot just send your FP&A team home on a Friday and have them equipped with a new business card on the following Monday with “business partner” added to their titles. Many finance functions have tried that in the past, and none of them – I repeat, none of them – have been successful. Being a business partner requires a specific skill set that needs to be added to what the FP&A professional is already able to do. Furthermore, specific conditions should be in place to increase the chance of success.
Two main options for implementation
Depending on the current state of your FP&A function, you have choices to make before implementing business partnering. To simplify, we’ll look at two stages:
- Your FP&A function is basic without a state-of-the art system, and it is frequently challenged on whether the numbers and analyses it delivers are correct or not.
- Your FP&A function has already seen quite a bit of transformation and has a cloud-based BI platform and advanced financial models to predict the future. It’s well-known for its financial savviness but doesn’t get out of the office much, except when summoned to meetings.
If you’re in stage #1, you’ll find that trying to implement business partnering will be an uphill battle. As a business partner, trust is your main currency. Yet if you keep showing up with wrong numbers in dated Excel graphs, no one will trust you. Instead, look to transform some of the more basic processes and invest in new systems to bring you up to date.
If you still want to go ahead and implement business partnering, you need to be very clear when setting expectations with your business stakeholders. Accept that your business partners will do a fair bit of reporting to begin with while you upgrade the other areas of your FP&A function.
In stage #2, your stakeholders have plenty of trust in your FP&A team, yet they’re not used to being engaged with your team members on their decision-making. Rather, they’re used to just receiving their report and making up their own minds. To change that, you need to formulate a value proposition to help them create more value, and then positively surprise them with your insights. You’ll likely also need to train your financial analysts and FP&A managers in partnering skills and plan for how they can further build their business knowledge.
A role or a mindset?
Another important choice you need to make is whether you will create specific roles titled “FP&A Business Partners,” or if it’s simply a mindset you’re implementing. We’ll explore the mindset in a later blog. But if you go for creating a new role, you also need to be specific about how the role of FP&A business partner is different from that of an FP&A manager or a financial analyst.
The main difference is where your old roles deal with reporting and analysis, a business partner uses the analysis to deliver insights to business stakeholders to influence their decisions and create an impact. In the case of creating a role, you also need to be mindful of what people you put in the roles. Countless times, I’ve seen new roles created and filled with the same people, with no real training provided. Don’t expect something different to happen just because it has a new name.
Here’s a quick step-by-step guide to select and develop your business partner team:
Select the most important attributes of the business partner role – for example, problem-solving, communication, etc.
- Carefully evaluate your people based on the attributes you’ve selected.
- Categorize them into three buckets: fit for purpose, maybe, and not fit for purpose.
- Create an action plan for the maybes and find other roles, or let go of the not-fit-for-purposes.
- Hire new people to fill the holes based on your selected attributes.
- Develop or find externally suitable training to accelerate the performance of your new team.
In conclusion, you need to analyze the current state of your FP&A function and whether it falls into state #1 or #2. If state #2, then decide whether it’s a specific role you want to create or simply the mindset of a business partner. If you create a specific role, then follow the step-by-step guide to select the right team.
This article originally appeared on LinkedIn and is republished by permission.
Read Part 1 of this series: What Is FP&A Business Partnering?