Being an accountant demands a flexible and creative mindset, and this is especially true for financial planning and analysis (FP&A) team members. FP&A is asked to collaborate across the organisation and answer the questions at the core of the business.
It's a job that demands both fine-tuned mathematical knowledge and the meta-skills to adapt to countless situations — but FP&A's success also has much to do with who's on the team and how the team is managed. FP&A leaders have learned to unleash innovation and creativity, providing lessons that can apply across the organisation.
"What business isn't in an environment where things are constantly changing both from a technology perspective, regulatory, marketing, business landscape, competitors in the playing field?" said Nevine White, an expert in FP&A and the executive in residence at Live Future Ready, where she helps companies prepare for disruption.
"There are so many things that are constantly changing. Not being innovative, even as a back-office function, does you a huge disservice."
One key component of innovation is knowledge because a team can't drive value until it truly understands a company.
"Innovative FP&A functions," White said, "are deeply, deeply knowledgeable of the business that they're in."
But that doesn't mean that every new recruit should be a subject-matter expert. For example, observe the leadership style of Ashish Arora, ACMA, CGMA, based in New Delhi. He leads the financial planning and analysis team at Cvent, an international events-management software company. His unit has grown from a single person — himself — to 25 people across India and the US.
Arora was one of the company's first hires, so he had the benefit of years of experience when he took on his current role in 2012. He was tasked with building his team because he had full knowledge of the business. He knew his team would eventually need the same level of business knowledge, but he decided to look for a few crucial skills at first.
"Financial planning and analysis is both art and science," Arora said. "[We] need to provide forward-looking information to the business so that they can make decisions."
The key element for new hires is problem-solving, he said. "If I leave you in the middle of chaos, would you be able to get your way out of it, or not, by solving these problems?" Arora said. He also looks for candidates with strong communication skills who can tell a story with the numbers.
Arora measures those skills with aptitude tests, including for Excel, as well as up to five interviews with himself and his direct reports. It is only after the new hire has begun working that Arora worries about the worker's direct knowledge of the business.
"When we are hiring them," he said, "we assure that they're good at problem-solving, they're good at Excel, they're good at communication — and then we layer in the business knowledge on top of it."
Once they're in the door, his new hires spend months shadowing other analysts and managers. Just as important, they immerse themselves in the sales function, sitting in on calls, and watching as the sales team courts customers.
"They listen in on the questions that customers ask," Arora said. "They understand the business faster, and they're able to relate to it."
That learning is crucial in a high-growth, sales-oriented company, he said.
"'How does Cvent make money?' That is the biggest question that I ask," Arora said. "Unless you know that, you can't make any kind of financial analysis."
Over the long run, Arora has built an inner circle of loyal and dependable employees. "Those pillars are the ones that already know your business," he said. "It's not something that gets built in a day or two."
How budget line items become real
That's a philosophy that White has embraced, too. In her job at a publicly held telecom, she made a point of taking her team on periodic visits of company facilities and customer sites. Suddenly, budget line items were transformed into real equipment and operations.
"Finance people are visual learners. Analytic thinkers are visual learners," she said during a recent conference presentation. "... The more they visualise what this is, the easier it is for them to gut-check the numbers and ask themselves, 'Does this make sense?'"
Like Arora, White built up her analysts' knowledge by embedding them in the day-to-day operations of frontline units, having them work "shoulder to shoulder".
"They went on customer calls, they went on trouble calls," she said. "They would walk the network with the technicians. They understood what it meant to be in that customer-facing position."
As her team got more comfortable in the field, they were able to make connections and introduce new ideas. For example, when a maintenance crew found itself paying out too much overtime and struggling to hit its metrics, it was one of White's team members who suggested adding a third technician shift.
Her team continued to grow its own curiosity, networking with leaders across the business, including a skip-level meeting with the CEO, growing knowledge and building relationships.
Outside the lines
Once they've learned the nitty-gritty details of the business, FP&A leaders can push their team members from engagement to innovation.
"You have to make people comfortable with colouring outside of the lines," White said. And the best way to do that is to take them outside the narrow context of the business function.
So, at one recent job, she started a book club. "We were in an FP&A department, but we didn't read a single finance book," she said. "We read books in all different areas about business, about skills, about life, about innovation."
One of the most successful titles was Michael Lewis's Moneyball, a fascinating nonfiction look at how a baseball team transformed itself with statistics. By diving into adjacent topics, White was able to lower the stakes — no one felt that they had to prove their finance skills in a discussion — while encouraging the team to think about and discuss higher ideas.
"It level-sets the organisation in the sense that it doesn't matter if you're the entry-level analyst or the VP," she said. That kind of communication, she said, gives rise to incredible conversations and allows for ideas to flow across groups outside of the company hierarchy.
The end game
Ultimately, the goal of FP&A should be to provide value through partnerships with other business units, according to Rob Teis, CPA, CGMA, who previously held an FP&A role at Walmart. In a recent survey by Genpact, 87% of finance respondents said that FP&A is meant to enable agility and adaptability.
"There's no cash registers in FP&A," Teis said. "You can't go out and sell more FP&A services to help the company or anything like that. You have to provide your value to internal customers."
White describes her approach as business partnering — "taking that deep knowledge of the business and providing reliable and useful information to the leaders that you're supporting".
Building leadership's trust and understanding, she said, is crucial to innovating in the FP&A function. White continued: "It's really hard for people to show that emotional courage to try something completely different and figure out a much more innovative way to approach the planning aspect of that business."
To take on that challenge — to really encourage and enable innovation — FP&A has to stay firmly grounded in the facts of the business while creating a clear-eyed vision of a better future.
- "10 Ways to Generate and Deliver Great Insights," FM magazine, April 2018
- "Why Curiosity Is Key in FP&A," FM magazine video, 3 May 2017
- "How FP&A Teams Are Linked to the Business," FM magazine video, 3 January 2017
Andrew Kenney is a freelance writer based in the US. To comment on this article or to suggest an idea for another article, contact Neil Amato, an FM magazine senior editor, at Neil.Amato@aicpa-cima.com.