Six ways to get finance out of the silo

As a growing number of companies look to form stronger links between finance and other business functions, managers are finding that there is a shortage of finance professionals with business-partnering skills, according to new research by Robert Half.

The company’s 2013 business partnering report polled 1,000 group or divisional finance directors spread evenly across the UK, France, Germany, Belgium and the Netherlands.

In the UK, most executives (81%) want to develop partnerships between finance and other parts of the business, but 33% of respondents said it is difficult to find candidates with the right experience to implement a business-partnering approach, compared with the average of 29% in all countries.

Robert Half’s research highlights a new skills gap for finance departments that want to make the transition from traditional accounting roles to ones that help other departments optimise performance, make better business decisions and improve risk management.

“Ten years ago, you needed a really strong technical accountant who could tell you what your business was doing and what it needed to focus on,” said Robert Half UK Director Estelle James. “You didn’t need them to support business strategy, and that’s what has changed. As opposed to reactively reporting on the success of strategy, business partners today need to be at the table to help determine and influence what the strategy is going forward.”

Small talent pool

UK directors polled for the survey said the most important qualities needed to fulfil a business-partnering role were deep industry knowledge (40%, compared with the average of 36%), deep business knowledge (41%, compared with an average of 34%) and strong analytical skills (29%, compared with the average of 30%).

When asked which skill is in shortest supply when recruiting, 26% said communication skills, followed by leadership skills (22%).

“A lot of these competences come from previous experience within that business unit, so the pool of talent is going to be pretty small,” James said. “There’s a lag between the demand and supply for that range of skills.”

Businesses are looking externally to plug the skills shortage, indicated by 70% of UK respondents to the survey. This is due to businesses (58%) finding it difficult to retrain existing finance professionals’ business-partnering skills.

A mixed approach

Deirdre Evans, ACMA, CGMA, deputy director of finance at National Trust, believes a combination of internal grooming and external hiring is the best strategy.

“The benefit of upskilling the people you already have is that they generally have a good understanding of the business and can help new recruits settle in,” she said. “When you bring new business partners in, you tend to raise the bar of business-partnering skills across the department because they have a strong commercial acumen and relationship-building skills.”

On the difficulties of retraining talent, Evans said many accountants who think they are business partners struggle not to be drawn into “pounds and pence” level of detail. She said successful business partners need to focus more on translating financial analysis into layman’s terms, relationship-building and coming up with solutions.

At National Trust, which manages conservation projects across the UK, business partners help project managers ensure they get the best value for money on projects, which can often be held up by adverse weather and other variables. The role has become much more important in the past few years because of a tough economic climate and growing public scrutiny of charity spending.

“Business partners help to determine what projects we want to do. A lot of our projects are conservation projects that do not generate a return,” Evans said. “So we have people in the business working with property managers and regional directors to help them understand what’s coming up.”

Tackling the shortage

Businesses should look at retraining staff before hiring, said Peter Simons, a development and innovation specialist at the Chartered Institute of Management Accountants, which is a partner with the American Institute of CPAs in the CGMA designation.

“If you talk to banks or insurance companies, they will tell you how difficult it is to recruit accountants who have the business understanding required,” Simons said. “However, if you talk to people in the engineering sector, such as Ford, Rolls-Royce, British Aerospace or Siemens, where there is a tradition of apprenticeship, they see it more as a question of how do you develop people to have these skills.”

This approach is already popular among some of the UK’s largest companies, including the nation’s largest commercial TV operator, British Sky Broadcasting.

Business partnering: Six steps to get started

1. Define your objectives. Every company is unique, and it is essential to establish specific inter-departmental objectives that align with the overall business strategy. Establish what it is you are looking to do and change. It may be that you want finance to work more closely with HR or IT, so set specific KPIs that relate to success.
2. Establish buy-in. Successful business partnering requires complete inter-departmental buy-in, so the full backing of the chief executive is essential. According to the Robert Half report, 45% of UK directors believe wider acceptance from the business is necessary to enable partnering to prosper. James said previous research indicates the chief executive is the top influencer in successful business-partnering programmes.
3. Conduct a skills audit. Assess the competences that exist in-house, establishing which team members bring the technical skills, business acumen and communication skills necessary to partner. Understanding the aims of other business functions that you will partner with will serve as a road map for the finance team. Developing your talent through mentorship, professional development and leadership training can help identify business partners that may have been overlooked.
4. Perform a systems and process review. Once the right talent is identified, it is essential that they have access to the necessary information and reports that will allow them to provide added value. Understanding each department’s objectives, and providing data to support key initiatives and goals, will help bridge the gap between finance and the rest of the business.
5. Engage an interim solution. An interim professional can help your company manage the transformation to a business-partnering environment or help with its ongoing execution. Interims can also mentor staff or help manage the backlog of the day-to-day work while the initiative is under way.
6. Identify the right talent. Sourcing external talent for business-partnering roles can be challenging, because until recently the concept as a functional role did not exist for many businesses. Hiring managers therefore need to critically examine candidates’ experience and how they played a commercial role with their previous employer. Look for candidates with strong data manipulation, cost accounting and financial analysis expertise, along with effective interpersonal and communication skills.

Related CGMA Magazine content

“Finance Chiefs Plan to Increase Business Partnering”: Finance teams are planning to invest more time and resources into business partnering despite the barriers that hinder its effectiveness, such as inadequate systems and skills.

“Poor Talent Management Hinders Companies’ Growth, Innovation”: Inadequate talent management is hindering the competitiveness and financial performance of businesses, a CGMA report suggests.

“Are You an Accountant or a Problem-Solver?”: The corporate finance professionals who climb the value chain will be interpreters and collaborators able to leverage data as a strategic asset while working across functional areas to solve problems and innovate, according to executives.