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

What differentiates great companies from good companies? On average, they make better decisions!

In its essence, the success of any company boils down to the decisions that are made every day at all levels of the organization, i.e 

• Strategic decisions on “where to play” and “how to win” as a company.
• Tactical decisions on e.g. pricing, products and placement.
• And the thousands of operational decisions that are made every day.  

To have an impact on a company, business partners must, therefore, focus on changing decisions for the better. Otherwise, there can be no impact! 

That’s why this week we’ll delve into why it makes sense to have a business partner at the table and how they can improve decisions.

Why business partners can help make better decisions 

First, we must establish why we believe having a business partner at the table will lead to better decision-making. There are three key reasons. 

• Lack of knowledge among stakeholders as most are not trained in economic thinking or how value is created. Perhaps they’re not even interested in this as they focus on e.g. curing diseases or connecting the global supply chain.
• Pursuing other goals than maximizing shareholder value as some care more about building kingdoms where they can see their power grow. Others are building expert silos within the company where technical experts won’t speak with sales staff and vice versa.
• We’re all biased in our thinking hence we have blind spots that we don’t account for when making decisions. The theory around cognitive bias is well described and there are hundreds of them detailed out. Being biased means we’re making sub-optimal decisions if we make them alone. 

Having a business partner at the table will increase the quality of economic thinking, break down functional silos, and add diversity of thought busting at least some of the biases bound to be sitting at the table. 

How do we impact decision-making? 

Business partners can’t be everywhere all the time, so it’s inevitable that they won’t be able to directly impact all decisions. Hence, we must look at two ways of how business partners can impact decision-making being directly and indirectly. 

• Directly: They’re at the table where decisions are made however, that’s only the first step. One too many times have we experienced business partners having a seat but not using it. Perhaps they took the notes and sent an e-mail afterwards but impact they had none of. Therefore, they must dare to speak up and share their insights as well as challenge the viewpoints of their stakeholders.
• Indirectly: Decisions are made all the time so they can’t always be there physically to impact them, yet they can still impact them indirectly. That can be through making it easy to make the right decisions by nudging their stakeholders to for instance use tools e.g. a price calculator for sales to calculate what price to offer the customer on the go or making simple rules for how to give discounts. 

Whether the business partners should be involved directly or indirectly is also related to the nature of the decision. If it’s strategic or tactical, they’d want to get involved directly because the impact could be substantial. For operational decisions, they must rely on that the decisions made at the strategic and tactical level to guide people to make the right decisions at the operational level. If business partners were to get involved in all operational decision-making they wouldn’t have enough time in a day. 

To help you increase your impact in the decision-making process we’ve outlined below the key steps you need to take to ensure your involvement leads to improved decisions.

You must identify options and risks and then maximize potential and mitigate risks to make better decisions. That’s what business partnering is all about! 

A multimillion-dollar decision with unthinkable consequences 

Let’s look at an example from a global transportation company that was facing a tough decision. 

Situation

A competitor had announced they would increase their transport capacity with 15% in a situation where there was already over-supply in the market. The company had experienced similar situations before and lost as much as half-billion dollars.

Complication

Company financials were tight, and they were in the middle of a turnaround plan so it couldn’t afford a price war, nor did it have the option to take out its own capacity. Meanwhile, in Finance a new business partner had only recently been appointed and it wasn’t a given that he would be involved in the decision-making.  

Resolution

Still, he decided to march into his senior stakeholder’s office as soon as he heard the news and ask how he could get involved. Sometimes that’s all you need to do to get a seat at the table.

Together with the business stakeholders they came up with three options or scenarios and evaluated upsides and downsides in both. The key belief was that with this much over-supply the competitor would be forced to take out capacity on an ad-hoc basis greatly impacting the service delivery ultimately sending customers away from the competitor and into their arms.

It was estimated that even in the best-case scenario though, the company still stood to lose USDm 100. The business partner had quantified both upsides and downsides and the way forward was clear. They knew what to do well in terms of delivering better service than the competitor. They also knew what to mitigate in terms of being a price taker rather than a price setter which could risk setting fire to a price war. 

Impact

Everyone agreed and the business partner set up a tracking mechanism to regularly check-in to see if the plan was on track. Throughout most of the year things went well and what could’ve turned into a disaster landed at a loss of roughly USDm 70 (USDm 30 better than the original estimate). 

How many decisions did you improve in the last week? 

This was a classic case of decision-making and one where the business partner could clearly show his worth by making it data-driven, focused on the economics, and ensuring proper follow-up on the decision base. It also goes to show that it’s simple for business partners to impact the decision-making process yet making the right decision is always hard. That’s why the business partner needs that seat at the table!

How often do you get involved in critical decision-making in your company? How many decisions did you improve in the last week? Share them with us in the comments and we can discuss how to further improve your involvement and elevate your impact for the future. 

Business Partnering Institute can help you get a seat at the table to start impacting the decision-making process. We can also help you better understand how to apply nudging to ensure you stakeholders do the right thing even if you’re not there. You can reach us today at [email protected] or get directly in touch with Anders on +45 2926 6410.

This was the fourth 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

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.

Your Journey To Successful Business Partnering Explained

How To Create Value Through Business Partnering

Everyone Can Adopt A Business Partnering Mindset (part of a six-article series about FP&A Business Partnering)

From Business Partner To Working Within The Business (part of an article series where I interview finance professionals about their careers in FP&A and Business Partnering)

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

What Is The Accounting Profession Paradox?

What Defines A Finance Master?

The New Career Path For Finance Professionals

How Finance People Can Be More Successful

The CFOs Roadmap To Transforming Finance

How To Become A Finance Business Partner

Financial Analyst vs. Finance Business Partner

Finance Business Partner Is A Bullshit Job

How Business Partners Keep A Plan On Track

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.