FP&A & Strategy – A marriage made in heaven
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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It’s a sad fact that almost 70% of transformation strategies fail to deliver the return that business leaders and stakeholders expect. The factors in failure have nothing to do with the size or maturity of the organization. Some of the most high-profile transformation failures over the past decade have impacted huge multinationals like Procter & Gamble, GE, and Ford.
Success or failure in transformation revolves around the goals, the clarity of strategy, and the communication and team buy-in within the organization. When you’re changing the culture of a business, everyone has to be along for the ride. This is why the finance function holds all the cards in the transformation game. We see the impact of every strategic decision as transactions filter their way into the books. We have a unique birds-eye view of all the operations of the company. To do our job well, we must maintain great relationships with our peers in different functions. We sit in the middle of the feedback loop from planning through action to analysis.? Transformation strategies and FP&A are a marriage made in heaven.
Unlocking Strategic Value
Tony Saldanha, who ran the IT and Global Business Services at Procter & Gamble for almost thirty years, compared the root of transformation failures with Alice’s encounter with the Cheshire Cat in Alice in Wonderland. When Alice asks which way to go, the Cat replies that the direction depends on where she wants to get to. Too many transformation strategies focus on the means, not the end. They don’t take account of what the activity is intended to create, deliver or solve. FP&A has the tools to define the outcome of a strategy and provide clear direction based on reliable data from all around the company and in the market and wider environment in which it operates.
Finance is in a unique position to draw the company together. FP&A engages with every function in the business. This collaboration is essential for the success of the company strategy. Take Ford, whose Smart Mobility initiative was segmented from the rest of the organization. Rather than becoming a beacon of hope, it was seen as a threat, draining investment from other areas. A holistic approach unlocks the strategic value potential of transformation, and FP&A is perfectly placed to ensure this happens. It’s a marriage made in heaven.
Driving Strategic Choices
Data-driven decision-making at the highest level of the business leads the way to effective strategy and successful transformation. FP&A can support this evolution in several key ways.
Financial Planning and Analysis drives the right strategic choices in the company for transformation success. How are you currently driving strategic choices in your company? Are you driving it at all or are you caught up in operational matters like most FP&A professionals? Delivering on the ambition of creating strategic impact is vital for the future of FP&A so get started today!
This was the second article in my latest series "FP&A Transformation Talks". You can read the previous articles below.
While you await future articles in the series you can read my latest series "Unlocking the unfair advantage of FP&A" below.
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.
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Anders Liu-Lindberg?is the co-founder and a partner at the?Business Partnering Institute?and owner of the largest?group dedicated to Finance Business Partnering?on LinkedIn with more than 10,000 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 65.000+ followers and 140.000+ subscribers to my blog. Recently I became an advisory board member at?Born Capital?to help identify and grow the next big thing in #CFOTech.
★ Finance Transformation & IT Project Manager | Data-Driven Strategy | Agile Certified Practitioner | Trainer | Podcast Host and AI enabled Producer
3 年In defence of my former employer Anders their recent share price performance suggests that their latest transformation efforts haven’t gone so badly … the efforts taken to make the necessary changes at the global scale are far more complex than can be covered in a LinkedIn post.
Helping CFO’s & Transformation Leaders in (￡10M+) Global Businesses achieve successful P2P/S2P Transformation through systems automation & innovation, enhancing operational effectiveness, reducing process costs & risk.
3 年Finance transformations are always complex and involve many other teams upstream and downstream from Finance. The better transformations are those which involve the business teams from the start and have clear outcomes set up. Sadly most fail to deliver as they either run out of budget or don’t have the appropriate stakeholder support in the senior leadership teams to see them through. Once the team is disbanded the items left to transform very rarely happen.
Strategy, CFO & Board Advisory Services
3 年Great article Anders Liu-Lindberg! Even the best developed strategies fail without organizational alignment and accountability. I agree that FP&A is perfectly positioned to play a lead role in this effort. Appreciate the content you are sharing and for promoting the benefits of FP&A!
Non-Executive Director | Financial Transformation & Strategic Leadership Expert | Proven Track Record in Driving Organisational Change, Corporate Governance, and Sustainable Growth in Healthcare, Technology & Finance
3 年I like the Cheshire cat and Alice in Wonderland bit Anders Liu-Lindberg
I help business leaders and executives of fast-growth companies reduce operating costs in excess of ￡30m by leading and developing high-performance Commercial Finance, FP&A and Business Partner teams.
3 年Many ways to answer this! Transformation a whole topic in itself. Taking it down a bit to FP&A delivery, it amazes me that so many companies have disconnected strategy and top/bottom planning processes, and then wonder why they are not delivering the strategic vision. So clearly huge opportunities to bridge this gap, you wont get far without partnering with strategy!