The CFO has made FP&A a top priority as previously described, wanting significantly more value from the investments made in this function. To achieve this, FP&A must also do things differently otherwise we cannot expect different outcomes.
To do something differently, new skills are needed. You could say we need to revolutionize the FP&A professional. The question is then into what? We know the purpose of FP&A which is “to drive the right strategic choices in the company.” This must be enabled by adopting a new mindset based on the 4Cs (Curiosity, Courage, Crystal Ball, and Clarity). Therefore, what we must build is a skills model that enhances the mindset and enables us to deliver on the purpose.
Only then can we make a concrete “ask” to FP&A professionals about what they must do differently in the future to deliver better outcomes and train their skills where gaps are identified.
A radically different skills model
In the past, what made you a successful FP&A professional was your technical skills like Excel modeling and ability to analyze data. To some extent that will always be the backbone of FP&A, yet they are not the determinants for your future success. Instead we must build a different kind of skills model that doesn’t try to capture all skills needed but only those that are critical to success. The model will be built around the mindset attributes with the purpose in mind.
Those individual skills will be further described in a later post so we can dig deeper into that discussion. Now, we will examine this new model from a practitioner’s point of view. To do that, I’ve enlisted Mr. Itamar Ahrenbeck who shares his views on the model and what it would take to revolutionize the FP&A professional.
The main issue that FP&A professionals have faced so far is structural. Meaning their time was mostly dedicated to “back-office” activities such as closing and reporting. However, now that automation of those tasks is well under way, FP&A must reallocate their time to gaining the skills needed to bring concrete value and get closer to the business.
How to build these skills
We first need to differentiate between the soft and hard skills that are needed for the new age FP&A professional.
The hard skills like modelling and technology can be gained with periodical training, with an emphasis being put on automating and making it as easy to replicate as possible. The hybrid skill of business understanding will be best gained with direct exposure to the other departments of the company. That can be in the form of on-the-ground visits to production plants, workshops on the current initiatives that marketing is working on, or just grabbing a coffee with people from sales to understand their challenges.
Finally, one way to improve soft skills such as influencing and communication is via a mentorship program where ideally the mentors come from both Finance and non-Finance backgrounds. That way they can guide FP&A on how to work with teams that may have a different decision and thought process as the one they’re used to.
Where to begin making changes
Start off by analyzing where you and your team stand: what skills you believe are your strengths and which ones you should work on. Meet with your colleagues from other departments to understand what their challenges are, how you could gain more exposure to their work initiatives, and what they would expect from you to have a greater impact going forward.
Most importantly though is acknowledging that this must take place and that to develop these skills it requires stepping out of your comfort zone. For too long FP&A professionals have remained within their comfort zone as this is likely the most dominant reason for the lackluster returns FP&A has provided to the CFO.
What are you going to do to develop these skills? What barriers do you see for effectively developing them? Of course, if it was easy everyone would have probably done it by now and we recognize that this is hard. However, better to accept the challenge than be left behind. We must revolutionize the FP&A professional now for the function to transform and start yielding the ROI that the CFO expects.