Decision ≠ Action - But What Can Finance Do About It?

We all know the story of a senior management team that decides to implement a new initiative. We can use a savings program as an example since many will likely experience this these days. It gets broadcasted on the intranet, every senior management team member gives a townhall about it and every middle manager will talk extensively to her team about it. Yet, a few months down the road few savings have come in and the financials aren’t looking any better. Why is that? Let’s investigate that further! 

We often equate business partnering to “supporting business stakeholders to make better decisions”. If we make better decisions, it should have a positive impact on the company, right? Not necessarily, as a decision doesn’t equal action. No matter how great decisions we make, they must be followed up by action or execution.  

Yet, what can Finance do about it? We don’t execute. We support decision-making and follow up that the actions that are taken lead to the desired results. Is it good enough to simply take a leap of faith that the decisions we make lead to the expected actions?  

Let’s explore that further as we this week look at “stronger execution” in our business partnering formula.

The long journey from strategy to action 

To understand how Finance can play a role in driving stronger execution, we must first understand the chain of decisions that happen in a company. A good framework for this would be Roger Martin and A.G. Lafley’s book “Playing to Win”.  They boil strategy down to making choices about Where to Play (i.e. markets, products, etc.) and How to Win (i.e. what tactics will you use to reach your goals where you decide to play). Once these choices are made in the strategy room, they get cascaded all the way down to the lowest level employee in the company noting that at each organizational level new choices are made about where to play and how to win. In addition, a feedback loop is established so the lowest level can share ideas with senior leaders about how the strategy is working. 

However, there’s still a need for something that sparks the mobilization of resources across the organization to act on the decisions made, a catalyst you could say. We believe Finance can play the role of the catalyst that’ll ensure a stronger execution of the choices cascaded down into the organization.

A catalyst is one that takes charge of an overall process even if that person is not the leader or most senior person in the group (think Peter Skillman in the famous IDEO project where they were tasked with re-designing the shopping cart). This person knows what outcomes should be achieved, knows the capabilities of the people on the team, and knows what process to follow to ensure the best possible outcome. The catalyst is likely not the one making the decisions or choices about what actions to take but she’ll make sure that they’re properly delegated and executed by staying in close contact with each of the group members or groups within the team. She’s that extra spark that makes the team come together and perform at a high level and gets things done. So how would this look from Finance’s perspective and a business partner more specifically? 

From executive order to money on the table 

Anders has told this story many times before, so you likely know the situation, complication, resolution, and impact but this time we’ll look at it through the lens of the catalyst. 

2013 was a challenging year for this drilling contractor hence steep savings targets were set for 2014 putting everyone in the company under pressure to deliver. 

Situation

Two drilling managers for drilling rigs under construction had been given a target to save 10% (USDm 2X2) on their start-up budgets. 

Complication

No one had any ideas and the deadline to act was fast approaching (note here, a decision was taken higher up to save this money, yet no action was taken, yet). 

Resolution

Enter the catalyst… One day everyone was gathered in the finance managers office for a round of monthly performance management. Suddenly, one of the drilling managers puts the fish on the dish and says “so, what are we going to do about this savings target?”. This was followed by a moment of silence as no one had any ready-made ideas. He then continued “should we organize a workshop to figure it out?”.

That was the finance manager’s cue to jump into the catalyst role. He wasn’t the most senior at the table and couldn’t make any decisions. Yet, he quickly called in for the workshop, facilitated the workshop on the day by setting the scene, breaking the team into two groups for brainstorming (placing a catalyst from Finance in each group), and gathering the ideas at the end. 

Following the workshop, it was time to step into the decision support role to figure out the potential monetary value of each of the ideas and prepare a summary for decision. Once a decision was made the finance manager again ensured (but wasn’t the one sending) that the proposal was sent for final approval. He also followed up on if approval was received and if the people that needed to get things done on the ground in the shipyard knew enough to do the right thing. He couldn’t get things done himself but could stay close to the process and ask questions in case things were drifting. 

Post execution all that was left was performance management of the decision and ensuring that the feedback loop was working so that the approvers at the headquarter and senior management who had decided to cut the budget knew what was going on and if outcomes were coming in as intended. 

Impact

The rest is history as they say. USDm 4 saved and the executive order actually brought money on the table in the end! 

What’s your role in execution? 

Now think back on the last few decisions that your business stakeholders made. What was your role in making those decisions and what happened afterwards? Were you a catalyst of the process or did you mainly provide decision support? Did you stay close to if execution happened as intended or did you wait for the numbers to come in? We’re keen to hear your reflections on this process and how you think Finance can ensure stronger execution in the company. Please share your thinking in the comments and we’ll pick up this important discussion with you! 

Business Partnering Institute can help you become a better catalyst by becoming an assertive communicator and start speaking the language of the business by sharpening your customer focus. You can reach us today at [email protected] or get directly in touch with Anders on +45 2926 6410.

This was the fifth article in the series "Business Partnering On A Formula". You can read past articles in the series below.

This Is How We Succeed With Business Partnering

Business Partnering On A Formula

This Is How Business Partners Have Impact And Drive Value Creation

Here's Why You Want A Business Partner At The Table

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.

You can read a lot more articles about FP&A, Business Partnering, and Finance Transformation below. It all start's with “Introducing The Finance Transformation Nine Box” where you set the ambition for your transformation. You should join the Finance Business Partner Forum which is part of the Business Partnering Institute's online community where we will continue to discuss this topic and you can click here to follow me on Twitter.

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Is Your Product Optimized For Value Creation? (part of a toolbox series where we look at what tools FP&A professionals should leverage to drive value creation)

How Business Partners Turn Analysis To Insight (part of case study series where I interview business partners about how they drive value creation using real cases)

The Future Of FP&A: Two Ways To Take The Reins

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How Finance People Can Be More Successful

The CFOs Roadmap To Transforming Finance

How To Become A Finance Business Partner

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Finance Business Partner Is A Bullshit Job

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Anders Liu-Lindberg is the co-founder, COO (Chief Operating Officer), and CMO (Chief Marketing Officer) at the Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more 8,000 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” and a long-time Finance Blogger on LinkedIn with 40.000+ followers.