It’s Time Finance Starts Driving Value Creation

Decisions, decisions, decisions. That’s all a company is made up of but wait what happens after the decision is made? More decisions, or? No, after a decision comes execution. It’s in the execution stage that value is either created or destroyed although the decision that preceded execution is a large factor in determining the outcome. What’s Finance’s role in execution? Years back I would have said “None”. Today I look at it from a more refined perspective by saying we might not be out there turning the nuts and bolts that make the business run but we sure need to be following them very closely. 

Are you leading or driving execution? 

We must look at leading indicators to see if the decision we made and the execution that follows is expected to lead to the desired results. If early on it doesn’t appear to be then we discuss if a course correction is needed rather than waiting the full decision period and only report on the outcome. It could even be that for certain initiatives it’s Finance that leads the execution. For instance, on a cost-saving program that involves advising department heads on how to cut costs and the trade-offs needed to be made.

No matter what though Finance must always be driving the agreed-upon initiatives and follow them closely from end to end to ensure they deliver the expected results. Here are some of the steps that this involves. 

• Create the business case or decision base that documents the assumptions on which the decision was made and the outcomes that are expected to be achieved.
• Design a measurement system of leading and lagging indicators that enable frequently follow up on the progress of the initiatives.
• Facilitate on-going status meetings to discuss if the achieved progress is sufficient or additional actions must be taken.
• Upon conclusion of the initiative document the outcomes against the original business case and explain why things turned out differently if that was the case. 

All of these steps typically reside with Finance, however, most often we miss out on some or all of them. That means that often we don’t know how we performed against expectations or the reasons why things didn’t go as planned. We lose a lot of learnings that could help us make better decisions in the future. That’s not driving value creation! 

Driving impact across the standard workweek 

So how does impact look like in the standard workweek?

It starts at the end of Wednesday where you’ve reached a decision on what to do to improve performance. Here you design the measurement system that’ll be used to track the initiative (if not already available). On Thursday the initiative is running, and you check the leading indicators and talk with people on the ground to check in on how things are going. On Friday you report the progress to the project or management team and in this condensed way of looking at things you collect the benefits.

That’s Finance driving impact in the company starting with moving from being a producer to a user of numbers that can quickly assess how a company is performing, present it to management, brainstorm on what actions to take to improve performance and then ensure that the expected results are delivered.

How does this compare with the work you today in your finance function? If all finance functions were working in this way companies were creating a lot more value than they are today. So, I challenge you to disrupt your own finance value chain and then come and tell me the results. Are you ready to get started?

This is the seventh and final article in the series titled "The Finance Value Chain Disrupted" and you can read past articles below.

The Finance Value Chain Disrupted. Are You Keeping Up?

Don't Be A Producer Of Numbers. B A User!

Who's Running Your Reporting Landscape - AI or Humans?

Are You Dying By The Hands Of Analysis?

From Real-Time Insights To Future Time

Meet The New Breed Of Finance Professionals: INFLUENCERS

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 a Senior Finance Business Partner at Maersk supporting our largest product and I have more than 10 years of experience working with Finance at Maersk both in Denmark and abroad. I am also the co-founder of the Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with almost 8,000 members. My main goal at Maersk is to show how to be successful with business partnering and drive value creation as a trusted partner. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger with 37.000+ followers.