CFO Role - Strategic Business Partner
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"Never was so much owed by so many to so few".
Full Articol by Andrew Codd here
Marco's comment: "Never was so much owed by so many to so few". A quote from Churchill that well fits with the role of the Finance Strategic Business partners in a company. Usually a relatively small team that drives excellent results to the benefit of all.
Within any organisation you’ll find some groups of people who are the most well-known and highly valued. Given there are many functions, groups, roles & people within our organisations today how can finance business partners become, and be seen to be more valued?
We can find the answer by distinguishing how these organisations distinguish between the people who they consider as vital as opposed to functional. In fact Daniel Priestly in his book Key Person of Influence summarises it well when he notes:
Vitality is more valuable than functionality. You can’t get the results you want without a vital person because they add something a functional person doesn’t have.
The Difference between Functional & Vital
Generally, if you begin to look around Finance organisations today you can quickly start to see the functional areas, they’re the ones being downsized, off-shored or gradually replaced by robotics. In effect they’re easily replaceable, a functional person is one possible solution to the performance of a process; if there’s a cheaper, more efficient or effective way of getting it done, the organisation will assign lesser value to that person. Harsh but true!
How many colleagues do you recall within General Accounting, Payables, Receivables, even some analysts that have been great at what they do but regardless have either been replaced by one of the options above or not backfilled at all? They’re also likely to be the first people to be let go following a merger or business transformation. Functional does the job, but functional is still interchangeable.
On the other hand you can recognise vital people in these organisation’s, they’re generally the ones who have roles created for them, perhaps crossing more than one function, with objectives expressed in terms of key success factors as opposed to a generic job description. They’re there to deliver specific results as opposed to being aligned with any particular process. A lot of (but not all) finance business partners, FP&A analysts, commercial finance managers, and finance directors tend to fall in these categories. The job requisitions for vital people are increasingly the ones that are getting signed off for recruitment, offer relatively higher compensation plus more flexible benefits.
I also suggest there are two useful definitions for vital as they apply to people in organisations:
One definition means ‘hard to replace’ and the other means ‘life-force’. Vital people see themselves as being the ‘hard to replace life-force’ of a project or initiative.
So how do we ensure that we either stay vital or even become considered as vital to our organisations?
Steps to Becoming Vital
Look around your organisation and identify who you regard as a vital person, what is it about them that you feels makes them so vital?
Now identify someone who you consider as functional. Similarly, why do you think of them as such?
Draw a simple T-account, and list out your thoughts to Step 1 on the Credit (Vital) side and do likewise for Step 2 (Functional). Here's my attempt below:
Shape your Financial Planning Cycles
Big Data Will Yield Finance’s Big Stories, Nobelist Predicts
As a rule, CFOs are rational individuals. Adept at thinking in terms of logic and numbers, they tend to look for quantitative explanations for the ups and downs in the valuation of their companies and of markets as a whole. They’re likely to assume that reality will conform to those models.
SPACE to define your Strategy
Interesting methodology to help your Commercial Strategy
CFOs don’t always qualify as finance leaders
Few CFOs give themselves high marks for effectiveness, and only a small proportion have the necessary traits to qualify as finance leaders, according to a new report.
The report, from the business software giant SAP and Oxford Economics, surveyed 1,500 finance executives around the world, and identified the six traits of high-performing CFOs:
1. Have strong influence beyond the finance function;
2. Drive strategic growth initiatives;
3. Improve efficiency with automation;
4. Be very effective at core finance processes;
5. Collaborate regularly with business units across the entire company; and
6. Work closely with the governance, risk and compliance team and excel at handling regulatory change.
A 7 Days guide for the pursue of Happiness while working in Finance
While reflecting on how Finance associates can help increasing Happiness in their working environment and companies, I read various blogs and articles on the matter and decided to propose a 7 Days behavioural based approach.The major caveat coming from a recent book “Emotional Agility: Get Unstuck, Embrace Change and Thrive in Work and Life,” by Harvard Medical School professor and psychologist Susan David is that the following suggestions will work if you like being a Finance associate and you like what you are doing: ‘Happiness, Susan David found, is the by-product of pursuing things that have intrinsic value to us. In other words, when you do something you love, that’s when you’ll feel happy’. So the suggestions are valid for those that are already convinced about their choice.
Create your own Happiness regimen
Research is clear: Happiness, resilience, connection, and kindness are skills that can be taught and developed over time—with practice.That’s why UC Berkeley’s Greater Good Science Center, in collaboration with HopeLab, launched Greater Good in Action: "Synthesizing hundreds of scientific studies, Greater Good in Action collects the best research-based methods for a happier, more meaningful life—and puts them at your fingertips in a format that's easy to navigate and digest.The practices in Greater Good in Action are for anyone who wants to improve his or her social and emotional well-being, or the well-being of others, but doesn't necessarily have the time or money to invest in a formal program. We hope they serve as building blocks for creating your own happiness regimen.While we’ll never have a sure path toward happiness, we believe these practices can create lasting improvements in individuals, families, and communities. Over time, they can evolve into habits, and from habits become a new way of experiencing the world."
Another source of inspiration are “The 10 keys for happier living” created by Action For Happiness (AFH), an international non-profit of people dedicated to the creation of a happier world, which has the Dalai Lama as its patron. They’re a list of happy guidelines, unique because they’re both practical and research-based.
What I propose are then some "small changes that all add up, when it comes to mood".
The 7 Days Guide for Finance
Monday: Giving - Do Things For Others. You are back at work and on your desk the last week Sales report. Division Two, the one the company is counting a lot for this quarter results, is again behind budget. Give them a call, let them that you care, offer your support. “I am sure we are all together doing the right things. It just takes time for our initiative to generate expected outcome” you may say. Show some compassion, maybe it was your team to set such a high target to the Division head.
Tuesday: Relating - Connect with people – Make three extra connections today. Take the stairs and go to Departments of your organization where they usually do not meet you. The Labs? A nearby Warehouse? The Internal communication team?. It is up to you. Stop to chat with them tell them what the Company is doing, learn some new name. Show your Emotions: say something positive: “Your proposal to expand the Labs has really positively impressed me. It will be stretched to fund it but you were so passionate behind the idea that we are taking the risk”
Wednesday: Exercising - Take care of your body. Are you exercising in the local company gym or prefer more exclusive places? Pay the fee, go to the company gym: notice which healthy actions lifts your mood and do more of them. “Try to limit your sitting and sleeping to just 23 and a half hours a day” suggests Dr Mike Evans.
Thursday: Awareness – Live life mindfully – “Reflect - Learning how to be still, to really be still and let life happen – that stillness becomes a radiance” say Morgan Freeman. Notice and appreciate the good things that your company is doing, list the KPIs where you are beating competition, call to your mind all the efficiency projects you team is committed to, think to some individuals that helped you in your life to become who you are, that were meaningful to you. Clear your table, quit your email and reflect on small positive things. Vanessa King, AFH's lead positive psychologist and architect of the keys, who’s writing a book on them, suggest to canvass friends to find out what you are good at – then do more of it.
Friday: Acceptance No-one’s perfect. But so often we compare a negative view of ourselves and the difficulties to make things happen in the place where we work, with an unrealistic view of other people and the organization they work for. Dwelling on our flaws – what we are not rather than what we have got- makes much harder to be happy. Friday’s SWAT could mean maybe 'Sell What’s Available Today', putting passion and determination instead of desiring someone else’s’ s success. Notice things you do well, however small.
Saturday: Resilience. ‘Fail again, fail better’ sustains Samuel Beckett. Get from Netflix the movie Pursuit of Happiness based on a true story about a man named Christopher Gardner. Gardner has invested heavily in a device known as a "Bone Density scanner". He feels like he has made these devices. However, they do not sell, as they are marginally better than the current technology at a much higher price. As Gardner tries to figure out how to sell them, his wife leaves him; he loses his house, his bank account, and credit cards. Forced to live out in the streets with his son, Gardner is now desperate to find a steady job; he takes on a job as a stockbroker, but before he can receive pay, he needs to go through 6 months of training, and to sell his devices. Or watch again Life is Beautiful where a gentle Jewish-Italian waiter, Guido Orefice, meets Dora, a pretty schoolteacher, and wins her over with his charm and humour. Eventually they marry and have a son, Giosue. Their happiness is abruptly halted, however, when Guido and Giosue are separated from Dora and taken to a concentration camp. Determined to shelter his son from the horrors of his surroundings, Guido convinces Giosue that their time in the camp is merely a game.
If the week was heavy take the day to shift your mood and bring new perspectives to the challenges you are facing.
Sunday Trying out – Keep learning new things Surprise your family cook a new meal, bring them to visit a new nice place, "As long as you live, keep learning how to live" said Seneca. Find time to lose yourself in what you love.
It’s Monday again, you enter smiling your office. On your desk the Quarterly Report…Division Two made the Sales target. It is time to set your goal for the next quarter. Share your dreams; tell to 3 people what this is important for you and the company. Set your personal Happiness goal and share with them. Be The Happy CFO
Happiness and Finance, The Future of Finance, Artificial Intellligence and Innovation. Search the articles on LinkedIn
In today’s highly competitive business environment, corporate culture must be a top priority,CFO plays a critical role.
A ‘financial’ strategist is a strategist first, and a financial second. For decades financials have been applying solutions to become a strategic business partner for the C-suite, from financial engineering and tax planning, to centralising (global) operations and deep analytics today. To avoid drilling deeper and still find nothing, reverse engineering the strategic role of the financial will show another route to be of value and increase the yield on IRR or profits with double digits…
Being a business partner will increase your scope and you will be more dependent on others. Learning to delegate, choosing the battles to fight for, saying no without compromising the relationship, continuing to expand your knowledge, surrounding yourself with the right people and supporting them would be the keys to success.
The profession is having to shift from one previously dominated by a technical skillset to one that is much more socially capable of developing rapport with others. And what better way to develop these required influencing skills than by summoning up the courage to engage in conversations with non-Finance professionals, for example when you’re waiting in line at the café, at dinner parties or even networking events where you may get asked: “what do you work as?” or “what do you do for a living?”
Organizations are running away from a vague “gut feel” to a fast analytical and experimentation led style of leadership. Never before has analytics been so important. A survey of Fortune 1000 CFO's also found that the vast majority—81%—felt they worked at companies that viewed their finance operation as a vital “strategic business partner,” involving Finance in top-level decision-making. They are seeing this across every industry where finance teams are heavily involved in strategy, tasked with not only modelling growth opportunities, but cost benefit analysis and cost cutting exercises. Leading companies that are embracing analytics are making decisions based on data and this is giving them an advantage in the market –Why aren't you?
Whilst there are very few books out there on Finance Business Partnering there are so many others available that detail the broader business skills necessary to be a successful finance business partner. So where does an aspiring Finance Business Partner begin their search for knowledge? I recommend the following 5 books that I consider as the best bang for your buck to start with. Happy Reading
Storytelling is not only for kids at bedtime but is certainly also for grownups in the middle of their careers and for companies in general. Those that tell stories will get others to listen and if you’re a company leader or even a sales person that’s exactly what you’re aiming for. There’s one department in the company though where the art of telling stories hasn’t really found its place yet. The finance department.
In this episode of the FP&A Trends TV Series, Dr Steve Morlidge, CPM Thought Leader and Author of ‘The Little Book of Beyond Budgeting’ and ‘Future Ready’, outlines the ideas behind Beyond Budgeting and the benefits it can bring to organisations.
In this episode of the FP&A Trends Series, Maria Olsson, Group Head of FP&A at Coats Plc and a member of London FP&A Board, shares her thoughts on the latest developments of modern FP&A. FP&A continues to evolve out of the Finance function and into the business, as custodians of core management processes such as business forecasting, working alongside business leaders, and will ultimately come to nest under the office of the COO.
As the CFO role has expanded, so, too, has the value of a top-notch finance chief. Today’s CFOs have more oversight and responsibility – and a role in setting an organisation’s strategy. To keep up with the rapid evolution, CFOs must ensure that they’re developing emotional intelligence (EI).
The role of CFOs has come under great scrutiny in recent years; their reputation has been cemented as a roadblock on fast growth, but this is now longer the expectation as companies look for further responsibilities from their C-suite. A CFO’s new remit has had to adapt to a more strategic role encompassing mitigating risk, but not in its previous form where constant caution and very little risk-taking were the norm. They have had to adapt to an approach involving accelerating business growth, improving operational efficiency and identifying opportunity. They are arguably the most progressive out of the whole C-suite.
A strategic advisor The role of the CFO is now very much one of a strategic business adviser. Often this involves analyzing how non-financial forces and factors could potentially influence future performance and profits.
What does the Finance Team of 2030 look like?
A lot of younger finance professionals today have it tough, the nature of their work and the functions they support are evolving quite rapidly and that makes having a view of where they’d like to be in their careers over the next 5 to 10 years difficult to visualize.