How can you implement a collaborative FP&A culture?

In my experience - exposure to FP&A is something not done in most organizations. Showing real numbers- despite how scary they are can really start to align employees on the behaviors needed to drive an ultimate outcome.

Collaborative FP&A is all about People n less about the softwares/tools which is just an enabler. Managers/Finance leaders should make that cultural shift from Siloes to Collaborative working with other parts of finance & business. Make the numbers tell a story with actionable insights to the management. Ensure accuracy of numbers n single source of truth. Drive home the point how FP&A team will add value & ease/eliminate pressure on business non value add time spent on financials. Align budget cycles with business, co-own the process, set clear expectations/deadlines, keeping the communication channel open throughout the process etc.. are some of the things that can be done to achieve Collaborative FP&A.

Aligning the FP&A vision with department leaders means understanding what it means for that leader to "win". You have to know what they are pulling to, so that they feel like you truly are there pulling with them. We wanted every department leader to feel like we were an extension of their team, not a separate team. When budgetary discussions came up, they knew we had the context in mind and that we also cared about their numbers.

Implementing a collaborative Financial Planning and Analysis (FP&A) culture involves fostering an environment where various stakeholders within an organization actively participate in the financial planning and analysis processes. This collaborative approach helps ensure that financial decisions are well-informed, aligned with organizational goals, and supported by a shared understanding of financial data. A good example of a strategy for implementing a collaborative FP&A culture is Communication and Transparency. That could be fostered by open communication channels between finance teams and other departments. Another example is to ensure that financial information is communicated in a clear and understandable manner.

I believe that it is important to educate and involve everyone in the company. I've often heard that a company culture starts at the top and works its way down. This was usually in terms of ethics and compliance, but the reason that that statement proves true is because the entry level workers are looking up to the leaders for an example. This makes it equally true that if the people at the highest levels of a corporate structure recognize those that work at the entry level and work to educate them and give them opportunities to the the importance of their FP&A strategies they will build allies that can see opportunities at every level.

Establishing a collaborative FP&A culture within an organization, suggested steps to achieve this, include leadership commitment, defining the culture, communication and transparency, cross-functional teams, technology and tools, training and development, data sharing and integration, clear objectives and KPIs, regular meetings and updates, employee involvement, feedbacks, collaborative decision-making, agile planning and forecasting, celebrating wins, performance metrics for collaboration, improvement, empowerment, external collab, adapting to change, and measurement and evaluation. The main idea is that a collaborative FP&A culture can align financial goals with company objectives, foster innovation & improve decision-making processes.

While it's easy to for FP&A teams to feel like the smartest ones at the companies, we had to maintain a perspective that "we could be wrong" and that pushed us to constantly explore ways to either improve our technical ability or our outlook on the macro trends that could have an impact on the forecast. At our regular FP&A meetings we could discuss current events, recent learnings, wins/losses and it became normal to share "here is what wasn't worked" and it always helped other team members avoid those mistakes but it helped us keep challenging the status-quo.

The biggest pitfalls most teams deal with is not clearly defining key terms and names. Someone might say we are at 100% retention... but is that ACV retention or logo retention? Maybe we haven't lost any logos, but the overall contract values have decreased, in which case, we have had attrition. Making sure that you align on the definitions is key in making sure that when you are showing data, that everyone knows what it means for the business. After having clear definitions, then it's setting clear indicators that every department lead cared about and in a way that made sense for them.

One of the most important things to establish as a culture and brand for an FP&A team is being focused on being the "source of truth". If leaders don't feel like they can trust your data, then they will never trust your recommendations. We wanted leaders to say things like "reach out to finance to make sure our numbers match up". If they didn't, they knew that something was wrong in their reporting and not ours because we had established ourselves as that source of truth. They could rely on us to provide the right answers and the right definitions. Making sure everything reconciled was a big part of the checks we would put in our models and in our presentations.

One of the most important parts of being great at FP&A is learning to sell. A lot of times the answers you have to give business leaders aren't great, but learning how to deliver that answer in a way that they can also resonate with is extra important. At the end of the day, you want it to feel like it is "their" target, "their" budget, and that only happens when you have successfully sold them on how we got there as an organization.