“Transformation!” is the clear message from Chief Financial Officers. To do that we must address the mindset of the entire FP&A team. Operating within your organization’s framework, as we discussed in the previous posts, “A Framework for the New FP&A Department”, in this blog series, will frame how your FP&A team carries out this mandate.

We asked several Financial Planning and Analysis professionals to share their perspectives on the mindset needed for success now and in the future. Their comments highlight a common theme of the need to elevate the technical expertise of finance to the level of strategy. This occurs by placing the everyday decisions normally seen in operations into the larger strategic context: Does this support where the company is going? How do we know? The focus on future allocation of capital and resources is what separates FP&A from other finance departments and helps fulfill FP&A’s “Why” statement:

Drive the Right Strategic Choices within the Company

Let’s hear from the practitioners:

Gaileon Thompson, Senior Vice President, FP&A Group Manager, US Retail Bank Operations, Citibank, AFP Board of Directors

FP&A can be the voice that plays the devil’s advocate by asking the probing questions and by challenging assumptions to ensure that the strategy under consideration is attainable. To that end, FP&A can also proactively bring insights to the table that marry the available data and financials together to help shape how the strategy unfolds.

Nikolaj Lynge, Head of Business Intelligence at Maersk Supply Service

Today’s corporate decision-making relies on trusted advisors providing critical recommendations to increase the likelihood of success. The core of the FP&A mindset is this advisor role. The role builds on three tricks: 1) a net present value (NPV) mind for thinking about (almost all) decisions; 2) a curious mind wanting to understand how value is generated; and, 3) a team-approach ensuring decisions benefit the organization.

Geetanjali Tandon, Digital & IT Transformation Finance Lead at Bayer Crop Science, Chair of the AFP FP&A Advisory Council

An FP&A professional does not just look at the numbers but rather tries to dig deeper to understand the story that the numbers are forming. This deeper thinking helps FP&A influence leadership to reflect on the strategic choices and the possible story that choice will create within the vision and mission of the company. A financial analyst uses not only the financial numbers but also market trends, economic indicators as well as works closely with the business to understand the assumptions to provide insights on the impacts of decisions. This mindset of obtaining various points of view, being able to formulate and understand the big picture and weave a story with numbers around it is what sets an FP&A professional apart.

Tania Trifunoski, Commercially focused Financial Planning and Analysis Leader

You need curiosity to develop, challenge, and influence the strategic thoughts of key decision makers. You’ll need courage to explore historical data and reveal where there is a risk to a strategy option. Also, a crystal ball to financially model the impact of the strategic options. And, clarity of the company’s growth environment so that you have awareness and can adapt while navigating to the preferred strategy.

How to develop this mindset for your FP&A team

Strategy is about making choices, and strategic frameworks are tools that will help you develop and consider options and actions. Here are four actions you can take to develop the strategic mindset:

  • Curiosity: You must ask questions to ensure 1) options are explored and 2) each option is evaluated with the same rigor 3) allow your mind to wander a bit and investigate the data, the business, and the assumptions.
  • Courage: You must have the courage to ask the questions, even if that means challenging senior management about which strategic options will be best for the business, and the tactical options that will get you there.
  • Crystal ball: You must have foresight into what might happen if a certain choice is made. Develop your modeling abilities to predict multiple outcomes, press for clarity on assumptions, and deliver a recommendation.
  • Clarity: Strive for clarity in your presentations to foster communication and alignment. That may mean in-person meetings or visualizations. It definitely involves listening and reading the reactions of your partners.

Mindset guides actions which will guide your stakeholders’ reactions; success is built on the team working cohesively together. FP&A has a lot to offer and bringing this mindset to the table is critical to successfully serving the company.

How will you approach adding these elements to your team’s strategic mindset? Do you have the tools you need to make highly informed decisions based on accurate data? How can you best support your FP&A team so they can improve their budgeting, forecasting, and planning?