To Create Your Future Finance Function, You Must Think Like A Start-Up

The story continues to develop on Instagram so if you want a look behind-the-scenes of BPI and entrepreneur life you can check it out by clicking here.

One path for accountants to take in the future is FP&A. If you would like to learn more the future of FP&A then join the virtual forum "Treasury and Finance in the Next Normal" come September. It is free to sign up and you can do it right here.

This is the channel "Trends in Finance and Accounting" which has more than 62,000 subscribers! Click "Subscribe" to receive a notification and an e-mail when I publish new articles on this channel every Thursday.

There are two things driving change in Finance. One is the automation of manual processes and digitalization of the finance function. The other is a business demanding more value from Finance through richer insights and a better ability to influence decisions. 

That means new capabilities are needed to deliver on the changed expectations. Behavioral science, commercial excellence, data science, engineering, etc. How often do you see these capabilities mentioned in a job description for a finance role? Except for data science, I bet you have never seen any of them before. 

Finance leaders must, therefore, think very differently when setting their future finance team and, in some ways, they could benefit from thinking like a start-up. This will allow them to build a team from scratch consisting of people they like to work with and people who bring different capabilities to the table. This will supercharge their team’s ability to solve the complex problems that businesses are faced with today. 

This was just one of the interesting topics I discussed with Jeppe Rindom, Co-founder and CEO at Pleo.io as part of the interview series, where I speak with start-up founders in AccountTech. We also spoke about completing the digital transformation and the legacy challenge that large companies have in doing so. 

The critical element to success is setting the right team 

Jeppe is the cofounder of Pleo.io, which he founded five years ago. He founded the company with the ambition to make everyday life in modern companies easier by taking care of most aspects of spend management. 

Pleo is essentially a credit card provider that through an app helps you manage and document your corporate spending on the go. This also gives the finance function an easy overview of what has been spent in the company. Here is how the idea came about and it is not how you normally think ideas for a start-up are born. 

“My Co-founder and I did not first get the idea for a product. Rather we had the ambition to build a company that had an impact and with a scalable product. We had an appetite to build a cool company rather than solve a specific problem” 

There is an almost fairytale-like story about start-up founders, who wake up in the middle of the night with a great idea and then start building their business the next day. That is far from reality though according to Jeppe. 

“95% of all entrepreneurs develop an idea over time. Rather than waiting for an idea to fall from the sky, they go with their gut feeling about the potential in a certain area and learn as they go” 

Jeppe and his co-founder also started working on a different product before getting the idea for Pleo.io. However, they found that working with salary and benefits was not scalable nor was it exciting. It did lead them to the adjacent area of corporate spending though and within four weeks they had developed the idea for what was to become Pleo.io. Corporate spending had clear pains meaning there was a specific problem to solve. However, getting the idea is not even half of the success. 

“The most important part of succeeding with a start-up is setting the right team. When you think of it, this is the most luxurious thing about starting your own company. You can pick a team of people you like to work with and with capabilities that complements you” 

Getting the right people into the company that both have a passion for the project and that you work well with is the largest barrier to succeeding with a start-up. 

“The first five-ten people that you hire are the most critical ones and they will help you build the core of the company that will help you grow. Some companies focus on the customer and others on the product; however, I believe that the most important focus you can put is on your people. Get the right people and the customer and product will sort themselves out” 

No finance team is built like this. No finance function works like this. All finance functions would do well to start adopting this! In Finance, we are obsessed with the deliverables i.e. the product such as the month-end report, the investment proposal, the business review presentation etc. 

The people we hire for the team are asked to do the same job. They might have slightly different preferences as to what they like doing but in principle, they all just do the same. 

Innovation is limited and new products are only launched after a lengthy process, which is very internally focused. Once in a blue moon, we might ask a customer of the product what she thinks of it. Just consider how Jeppe and the team used Design Thinking to develop their product. 

“We stated our vision and mapped out the idea in a matter of days and in the next couple of weeks we had created a first potential product offering. Then we started to speak with customers to validate both the idea and the technical feasibility. It was a very customer-facing innovation process”

 This leads to two essential questions that finance leaders must ask themselves and finance professionals should challenge their leaders. 

• Do we need to hire new capabilities…
• …or do we need to start working in new ways? 

One is aiming at driving change by changing the people and the other through changing the way of working. Likely we need both i.e. some new people to fuel a different way of working. For instance, if we want to apply Design Thinking in Finance, we will need to train our people to a new way of working. At the same time, we should bring some people in that have tried to work with Design Thinking before. Regardless, how you answer these questions will likely lead you to build your team differently and push you to start working in different ways. 

Legacy and manual processes are likely what is stopping you 

Few finance functions have the luxury of building teams from scratch though and for large companies, this is a major challenge. Not only is it hard to fully blow up teams and start from scratch, but they also battle with old legacy systems. To build the finance function of the future they face many challenges indeed. Jeppe also sees these challenges. 

“Large companies carry a lot of legacy in the form of outdated ERP systems that are customized to a degree that they are hard to replace and hard to further develop” 

New companies do not have the same challenges and according to Jeppe most new companies simply build a digital finance function from the beginning. Primarily it is the legacy challenge that is holding back the finance function at large, but that does not mean nothing has happened. 

“When I got back into Finance 10 years ago, it did not feel like much had happened since I helped my father’s accounting business back in 1992. However, in the past five years a lot has happened and in principle all the tools are available for a fully digitalized finance function especially if we can solve the legacy challenge” 

This means that we should stop asking “what is possible?” and instead move on to asking “how can we make it happen?”. If you ask Jeppe on his view on the finance function of the future, we must complete the on-going digitalization. 

“We must complete the digital transformation and lift the burden of manual processes from the finance function. Only then can Finance become the trusted advisor it truly needs to be” 

Completing the transformation also creates new opportunities in insight generation where Finance also plays a crucial role. 

“The finance function must claim ownership of data in the company and broaden its view on data to not only include financial data but also data about customers, marketing, etc.” 

The new way of building finance teams, the completion of the digital transformation, becoming a trusted advisor and innovating in new ways all put new and heavy demands on the finance professional. 

“Finance professionals must accept that their entire career is becoming a learning journey. Thinking that you only learn between 19-25 years of age in school will not get you very far” 

The world is developing fast so if you are not continuously learning, you are falling behind and eventually coming to a standstill. The continuous learning opens for different profiles in Finance Jeppe says. 

“Some of the strongest finance profiles will not necessarily have a finance background in the future. We need people that understand data science, engineering, and customers” 

There are those that believe that there will not be (m)any people in Finance in the future. Jeppe is not one of them though. He simply believes that the number of people will remain the same, but that they will be doing something very different. 

Could you restart your finance function and work like a start-up? 

That is the question I am left with after having talked to Jeppe. The benefits are clear to me, but so are the challenges of doing so. Here are some questions to answer and start working on to get you going. 

• What does it take to complete our digital transformation?
• What does it take for me to revamp my team for a better blend of capabilities?
• How can I turn the speed up on my innovation process and better involve the customer?
• How can I become a continuous learner? 

You will not be able to build the finance function of the future without answering and acting on these questions. However, if you do you will get ahead of the curve fast and elevate the impact of yourself and your finance function. 

Now tell me; what are the main challenges for your finance function to complete the digital transformation and how do you plan on overcoming them? Do you have complementary capabilities on your finance team, or have you hired five clones to do the same job?  

It is time we start action these last large barriers for Finance to become a trusted business advisor sharing deep insights and influencing decision-making for the better. That is the future of the finance function and it better start today! And thinking like a start-up might just be what gets you going.

If you like what you read and would like to make a voluntary donation to support my continued content creation you can use one of below options. All content continue to be provided for free!

For international donations please transfer via PayPal here: PayPal.Me/liulindberg

For Danish donations please transfer via MobilePay on 876201

This was the third article in the series about Danish start-up founders in AccountTech. You can read previous articles below.

Meet The People Who Are Disrupting Accounting

Why Is Accounting Still Working Like It Is 1999?

You Do Not Need To Know Accounting To Disrupt Accounting

Continue reading below for more articles about how digital is impacting Finance.

Inevitable Retraining Of Finance Professionals Is On The Horizon

Why The Digital Revolution Hasn’t Caught Onto Finance Yet

Tech vs. People. Where Should Finance Invest?

A Digital Reality Check Of The Finance Function

How To Make Robots A Part Of The Finance Family?

Why You Should Only Robotize Standard Processes 

Robots and Humans. A Marriage Made In Heaven Or Hell?

A Tale Of Robots: From Assembly Lines To Knowledge Workers

Robots Must Solve Business Pains To Be Successful

What AI Competencies Do Your Finance Team Really Need?

Here's How To Test If Your AI Solution Will Be A Success

You're The User Of AI. Yes You, So Take Charge!

Blip. Blop. Accounting Robot. Are You Ready?

Are You Ready For Robotics Process Automation?

Have You Met Your Robot Accountant Yet?

Robots Are The Future Of Analytics

Your Robot Accountant Has A Name, It's Dixie

If you want to become a better business partner you should consider taking our online course "Business Partnering Explained - Value Creation Unlocked" to get a better handle on the role. It's accredited for 5.5 CPD hours.

Anders Liu-Lindberg is the co-founder, COO (Chief Operating Officer), and CMO (Chief Marketing Officer) at Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 8,500 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” and a long-time Finance Blogger on LinkedIn with 45.000+ followers.