CFO, it’s time to break down the finance silo you’ve been living in
Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on creating impact through business partnering | Interim | VP Finance | Business Finance
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When you ask business leaders for feedback on your finance function, you will often hear the brutal truth. I’ve been part of many such exercises, and one quote has stuck with me over the years: “Finance is largely a faceless organization, where we never know whom we’re interacting with or what service we can expect.” What a reality check for the finance organization.?
To some extent, we shouldn’t be surprised by such feedback. With offshoring/outsourcing, digitalization, and automation, many finance processes are now run by people far away from the business or by bots. That’s not conducive to collaboration, and while efficiency and cost levels may have improved, cross-functional collaboration has suffered equally.?
It’s been a consistent trend in the past two decades with an overly focus on the cost of finance to revenue. If we all focus on efficiency, we will undoubtedly end up as a faceless organization. If efficiency is the yin of Finance, then effectiveness is the yang. We can’t just be cheap - we also need to be good. Good means adding more value to the organization than the cost of Finance itself. It means producing high-quality numbers and using them to drive better decision-making.?
Using the numbers is much more than making self-service dashboards available and sending reports through e-mail across the organization. It means that we must collaborate with other functions, build strong relationships with them, and influence their decision-making. This has been a high-level topic for the past two decades, but we’ve seen much less progress on the effectiveness agenda than efficiency. That’s why we made cross-functional collaboration a top 10 priority for CFOs in 2024 .?
This blog will uncover different frameworks and approaches finance teams can use to boost collaboration with other functions. Whatever their current opinion of Finance, we see an open-door invitation to come and contribute to driving the business. Business leaders want to make the best possible decisions, so why wouldn’t they want Finance’s help??
Becoming customer-centric?
We often ask finance teams if they’re customer-centric or finance-centric. Customer-centric, in this case, means their internal customers, such as Sales, Marketing, Operations, etc. Unsurprisingly, the majority say they’re finance-centric. That means they focus on their deliverables and deadlines and are often frustrated by the lack of quality input they receive from the business.?
Here, it’s vital to remind finance professionals that they are not the center of attention in a company. It wouldn’t even be enjoyable if that was the case. In companies where Finance is at the center, it often means the company is in going concern trouble. Instead, we should focus on our stakeholders' key priorities. That is where we should focus all our energy and skill on helping them be successful. That’s because if they win, the company wins, and if they do so also in part due to our help, we win!?
To structure your efforts, we can recommend the NASA framework. NASA stands for Needs, Acceptance, Solution, Acceptance. Let’s break that down:?
You can move on to the following priority when a solution is accepted and implemented successfully. This makes the framework repeatable and ensures you continuously deliver results and create value. However, you may need an overall stakeholder mapping before initiating the NASA framework. Highlight all main stakeholders within your scope and rank them based on their importance, strength of relationship, and current satisfaction level. This exercise will help you prioritize the right stakeholders.?
Take a holistic view of your value chain?
It’s important to note that it’s not a one-person job to succeed in having successful stakeholder collaborations. In the finance function, multiple teams, e.g., accounting, business finance, and FP&A, drive value with various business stakeholders. When developing solutions for your primary stakeholders, you must take a holistic view of your value chain.?
A helpful framework for doing this is SIPOC. SIPOC stands for Supplier, Input, Process, Output, Customer. This elegantly highlights everything that needs to be considered before presenting a solution to the customer. Let’s again break that down:?
It may seem daunting to consider all this to develop the right solutions for your stakeholders and even to take a customer-centric approach in the first place. However, this is how Finance gets a seat at the table, becomes involved in decision-making promptly, and makes a difference between ensuring compliance with rules and regulations and controlling outputs across the company.?
A simple approach to getting started?
It’s easy to start a process like this when you join a new company. However, most of you are working in a company now and may wonder how you can get started. It’s pretty simple. Just follow this six-step process:?
1. Identify your main stakeholders
2. Prioritize them using importance, strength of relationship, and current satisfaction
3. Book a meeting or lunch with your three most important stakeholders
4. At the meeting, state your intentions, i.e., to help them be successful
5. Ask them how business is going and what are their key priorities
6. Get acceptance for your understanding and suggest that you can help solve their challenges?
Utilize the remaining parts of the NASA and SIPOC frameworks to develop proper solutions and get buy-in acceptance to implement them. Remember to follow up on the solutions. Did they deliver the expected results? If yes, consider pushing for more. If not, analyze why and suggest a different path forward.?
Collaboration and breaking down silos may seem fluffy to many, especially finance professionals. However, the structured approaches presented here will make it tangible and much more straightforward. Soon, collaboration between Finance and other functions will flourish, and value creation will be boosted. It will be a trustworthy source of competitive advantage for your company.?
How strong is Finance’s collaboration with other functions in your company? Does Finance have a seat at the table, and do you get involved in decision-making at the right time? If there’s no clear answer, we hope you can use the advice presented in this blog to help you become a much better collaborator.
This was the eleventh and final blog post in our new series, "The Top 10 Priorities for CFOs in 2024." In this series, we will explore the issues even more deeply, share candid perspectives from the frontlines, and offer actionable advice on what the Office of the CFO should do to create more value. Read the previous articles in the series below.
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Catch the insights from our latest series, "The Modern Finance Function," here.
You can read all blog posts in our previous series "Demystifying AI in Finance & Accounting" below.
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Anders Liu-Lindberg is the co-founder and a partner at Business Partnering Institute and the owner of the largest group dedicated to Finance Business Partnering on LinkedIn, which has more than 12,000 members. I have ten years of experience as a business partner at the global transport and logistics company Maersk . I am the co-author of the book “Create Value as a Finance Business Partner ”, a long-time Finance Blogger, a LinkedIn Learning instructor , and a Top Voice on LinkedIn with 340,000+ followers.
Helping Finance Managers of ‘busy’ SMEs improve profits | Turnaround 'busy' loss-makers | Improve profits of the already profitable | A proven step-by-step process | 90-day projects | Training & Coaching throughout |
6 个月Excellent blog/article., Anders. An acid test to consider... If the Function Manager you are supporting - wouldn't be prepared to take your full salary cost onto their payroll - then you're likely NOT providing them with the valuable insights and understanding they need to improve their decisions. ??
Business Advisor| FP&A | IFRS | Financial Reporting | Senior Consultant | Business Transformations
6 个月Does Finance have a seat at the table at the right time? Is such a crucial question that often gets ignored! Yes, finance is involved but the timing also needs to be right. Thank you for highlighting the two primary frameworks Anders!
Senior Finance Business Partner | ex-Accenture | FP&A | Deal modelling | Unlocking value | I help Finance get a seat at the table
6 个月Thanks for the article Anders Liu-Lindberg. It hits the right spot being both general and applicable to many situations and still actionable in a typical organizational structure. From experience, such a proactive approach is usually welcomed by stakeholders; while in rare cases there may be reluctance to change. It's then up to us as Finance professionals to convince our customers with business acumen.