In this article, we discuss how to build an FP&A team.
“Coming together is a beginning. Keeping together is progress. Working together is success.”
The role of FP&A in business has changed drastically during the past few years. ‘Strategic advisor,’ ‘change agent,’ and’ business partner’: these terms are very characteristic of the new trends arising in the world of FP&A. Building an effective FP&A team that would play according to the ‘new rules’ is a much-discussed topic. During the last meeting of the FP&A Board organized by FP&A Trends Group in Amsterdam on 6th November, this topic also brought up an interesting discussion. In the article, I would like to give you a short overview of the leading opinions on this subject proposed by 43 leaders of Finance of global companies discussed during the abovementioned event. Even if Data Crossroads is a coaching and training enterprise in data management, the FP&A function is one of the most important data management business partners.
Clarifying the vision
The first step in optimizing your team is re-assessing your vision of the role of FP&A in the company’s strategic development. You can clarify your vision by answering several questions:
- Who are your key ‘customers’ within your company, and what are their core needs?
One of our assumptions is that your key ‘customers’ are the management team on different organizational levels, from top management to operational. Their core needs lie in the area of effective decision-making.
- What value can FP&A deliver to the ‘internal’ customers?
Your key value proposition to your customers is to support the decision-making process to:
– Increase sales
– Reduce costs
– Improve gross margin, including product and customer gross margins.
- How will you achieve it?
There are many ways to do it, but the most important is developing business partnering by optimizing your FP&A team proactively.
The next part is optimizing your FP&A business capabilities (which we will discuss in future publications).
Once your vision is clearly defined, it is time to get buy-in from your top management to support this change initiative.
The second step is assessing which FP&A roles are required to perform the new FP&A capabilities and fit your new vision. These roles will require corresponding skills.
Next to traditional roles, some new ones appear due to the changes within the FP&A world. Think, for example, of ‘FP&A architect,’ ‘analyst,’ or ‘influencer.’ Once you have defined the roles, connect these roles to the required skills. Skill matrices are the most commonly used tools in this case. While building such matrices, make mapping between FP&A capabilities, roles, and skills.
Forming the team
Now you are ready to assess your team’s skills and whether some need to be developed. This is a crucial moment. It doesn’t only concern professional skills. The “soft” skills are just as essential and can be key to bringing business partnering to a new level.
You can map the skills matrix to each team member during this stage. By doing this, you will achieve a few things: first, you will assess each employee’s level of potential development. Secondly, you will be able to specify the training requirements for each. And finally, last but not least, you will be able to assess the staffing requirements: will your current team be able to fulfill all your new requirements, perhaps by developing themselves, or do you need some ‘fresh blood’?
Training and diversifying the team
As a result of the previous step, you can start bringing changes to your team. Keep in mind that there is not only a need for individual training and development, but it is also necessary for the team as a whole to learn how to act and collaborate more efficiently.
The FP&A Board has come up with the following tips during the discussion:
- Pay attention to the attitude and personality of each team player. The skills they possess should be complementary to each other.
- Explore the idea of diversification within your team while also ensuring the team’s sustainability. Next to their core skills, every team member should be able to back up their colleagues.
- Pay attention to developing and safeguarding your business knowledge within your team. Companies with multiple products and markets need to support information sharing within your team and other business teams within your organization’s ecosystem.
- Align the objectives of the group and the individuals. Create a motivating environment.
- Motivate rotation within your team and other financial, risk, and business functions.
All that you have read above is not a one-off exercise. FP&A practices should embed change management and should focus on continuous improvement. This 5-step approach is, on purpose, shown as a closed circle.
As soon as you finish the first round of changes, you will find yourself at the beginning again, and you can start round 2: assessing changes in your environment and adapting the FP&A function. The secret to success is creating an open and creative work environment for business partnering.
Dear reader, you are also more than welcome to take part in the brain-storm around the subject. We would love to read your opinions in the comments section!
For more insights, visit the Data Crossroads Academy site: //academy.datacrossroads.nl/courses/how-to-bring-data-management-into-finance-practices/lesson/data-management-fundamentals-for-finance/