Part 5 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.
Last week, we discussed how to build a partnership, covering one part of the equation of business partnering. This week, we will look at the other. If your FP&A team really wants to take part in strategic conversations and influence the direction-setting in the company through business partnering, there’s no way around understanding the business—because how can you set the direction for something if you don’t understand what it is?
However, it’s one thing to say that someone must understand something and a completely different thing to gain the understanding. Let’s take a look at concrete initiatives to take.
The simple plan
There are simple initiatives you can take tomorrow, and then there are more structural initiatives where you first need to have the trust of your business stakeholders. To start with the simple plan:
- Use resources already available to you, like company intranet, business news, annual reports, and investor presentations
- Network with people from the business or other finance people, as they might understand some parts of the business that you don’t
- Talk to your leader or team about the business either in structural meetings once a month/quarter or during casual conversations whenever your company launches a new product, wins an important contract, etc.
- Stay curious and never miss an opportunity to ask questions, although you also need to show progression in your understanding, as the quota of “stupid questions” doesn’t last forever.
These initiatives will get you started and help you gain trust with your stakeholders, but it won’t get you to your end goal, which is to influence strategic decisions.
The advanced plan
To accelerate your business understanding further, doing the above is not enough. Hence, you need some more structured initiatives, including, but not limited to:
- Take a job in the business for a while and walk a couple of miles in your business stakeholder’s shoes. That will right away enable you to start insightful conversations, deliver recommendations, and create a business impact.
- Sit next to your business stakeholder at least for a couple of days a week. Then you get a chance to pick up on what’s happening on the business side of things on a daily/weekly basis—plus it gives you a chance to build a closer relationship with your stakeholder.
- Visit customers and vendors together with front-line sales or operations to understand their pain points. This will help you create a shared language with your business stakeholders and understand the challenges they face every day.
- Shadow your business stakeholders for a day to get insights into what they are doing daily. It will also help your relationship-building.
- Invite your business stakeholder into your regular FP&A team meeting to talk about how (s)he sees FP&A helping the business.
Arguably, doing all this will take a lot of time for you and your business stakeholder. However, without making this investment, you will never be able to provide the strategic support that the senior leadership team expects of you and your team.
One example that comes to mind is in shipping, where companies would often send their office-based staff on a so-called vessel tour. This simply means that you take a trip with a vessel from Point A to Point B. Then you would see what it takes to load cargo on board, including terminal operations and what it takes to steer the vessel per plan and run a smooth operation. Suddenly you have a lot more appreciation of how a shipping business is run. Next time, you could join that sales call with a customer whose cargo you’ve just seen transported, and start an informed discussion about how you and your company can support the customer even better. Now that’s developing and using a business understanding!
In conclusion, if FP&A truly wants to become a business partner and help set the strategic direction of the company, then business understanding will be crucial. Having this understanding will enable you to put your analysis to use in many new ways. You can derive insights that no one thought of, simply because they didn’t have the insights into the numbers that you do. Moreover, understanding the business will help you to build a solid partnership with senior stakeholders, as they will value that you understand their pain points and what the business is all about. That’s a true win-win proposition, so why not start tomorrow building or expanding your business understanding?
This article originally appeared on LinkedIn and is republished by permission.
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