The Role Of Finance In An Agile World
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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Your CEO has just announced that your company will embark on an enterprise-wide agile transformation journey to achieve agility in its fullest extent. You glance at the organizational chart and see no mention of Finance. Instead, you see just three organizational layers: a leadership squad, 20 tribes and 200 squads. It is only natural to start thinking about where you fit in, but the reality is that you must find the answer yourself.
Therefore, we are starting an exploration journey of Agile in the context of Finance and later how we can transform Finance using an Agile approach. In the coming two months we will discuss the role of Finance in this new organizational context and we hope that you will contribute with your thoughts and ideas on how Finance can adapt to service an agile organization.
First, let us explore what Enterprise Agile means and what could be the benefits of moving to such a setup. The article is much inspired by the work of McKinsey but with reflections on what it means for Finance.
McKinsey has defined five traits of an enterprise agile organization.
In short, it is a purpose-driven organization of empowered and networked teams, that decide, learn and evolve rapidly whereby igniting the passion in their people and lastly fueled by next-generation technology. They make another point that is particularly important when discussing Finance’s role.
“Truly agile organizations combine both [stability and scale with speed and flexibility]: a strong backbone or centre provides the stability for developing and scaling dynamic capabilities.”
Part of the backbone is standard operating procedures and a shared purpose and direction. Perhaps the finance function should also be a part of this backbone?
Finance’s role in relation to the five traits
To understand the role of Finance we must examine our role in relation to the five traits that characterize enterprise agile organizations.
Clearly there are many challenges to solve and answers to find both from an individual and functional perspective. We will dig into these in coming articles but to inspire you to think in new ways we will share an example of how on finance business partner carved out a role in supporting an agile team.
Creating an online selling model
A global transport and logistics company wanted to change part of their selling model from an offline environment to an online environment.
Situation
An agile team was formed reporting to a product owner to create a tool that could facilitate the online selling model for short-term contracts.
Complication
A high-level business case had been created yet there was no structured follow-up and while the team was tracking several KPIs it was not always easy to get a good overview of how the product was tracking compared to the offline model and the market.
Resolution
For other purposes, the product owner had been assigned a finance business partner to help him drive overall performance for his product. The business partner saw an opportunity to also play a role in the development of the online selling model.
He started by making the benefit case clearer and establishing a better tracking mechanism. Second, he involved himself with the teams that were piloting the new online model. This both to help them identify the learnings but, more importantly, helping them understand the impact it had on the market. Lastly, he naturally took responsibility for creating further visibility when the online model was further rolled out following the pilot.
Impact
In this case, it was not possible to quantify the monetary impact of the business partner being part of the product development. However, making the business case clearer helped eliminate any doubt from senior stakeholders that changing the selling model was the right move. It also helped the pilot teams better understand the impact of their actions.
For instance, the business partner found out that the way prices were reported, there was a discrepancy between the actual prices and what the KPIs showed. This was a significant difference even impacting overall company level KPIs. If not detected and fixed, it would have led to actions that could have had significant negative consequences for the company.
Let us carve out the role of Finance in an Agile world
We are still defining what Finance’s role should be in an enterprise agile organization. However, we have highlighted how such an organization works and given suggestions or highlighted key questions for how Finance should operate. We intend to try and make these suggestions more concrete and answer the questions in the coming weeks and months. Finance does have a role to play in an Agile world. We just need to define it first.
What do you see as Finance’s role in an Agile world? Have you experienced that some parts or all your company has gone Agile? What has your response been and what role does your company see Finance play? We value any perspectives you can bring into this discussion as it is critical that we find the answers.
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This was the first article in our new series about Finance in an Agile world and how to transform Finance using an Agile approach. You can read previous articles about megatrends impacting Finance below.
How Humans Must Re-Invent Their Role In Finance
The Rise Of The Remote Finance Worker, Or Not?
Will Finance Become 100% Digitalized?
The Future Of Finance Is Agile In Every Possible Way
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.
Should We Keep Talking About Business Partnering? (part of a 17-article series where we deep-dive on our business partnering framework "BP on a Formula".
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 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 47.500+ followers.
Senior Financial Analyst | FP&A, Forecasting, Financial modelling | Drive financial performance through strategic business partnering
4 年Top notch article. Having worked in companies that have gone transformation by leap and bounds. Spin-off, demerger and sell off. I can say with certainty that an agile methodology would have really helped things move in better direction and improved results. Today's FPNA is almost involved in everything, every project but just a money calculator than a true business partner. It's not that they don't know what to do rather they have too much on their plate. To carve out niche time from finance without proper investment results in under achieved results. The most important way is reduce time spent in regular activities budgeting, forecasting by way of inhouse digitalisation and spend the savings in value added activities. To start with, start small on a new project rather than all eggs in one basket. Learnings to be assessed, improvised and then implemented enterprise wise with results to vouch for.
Apprentice DevOps Engineer
4 年Very interesting article. I hear this word "agile" everyday in my life but not in my line of work but from my husband who is in the software industry and always wonder how it will be if agile is introduced into finance. I truly believe now is the time for finance to have an agile approach.
Passionate Leader | Finance Transformation | Operational Improvement | Rugby Mum
4 年Most finance teams need education on what is agile and how they can adapt as a team to embed the methodology and align it with the rest of the business. Finance always seems to be an after thought in transformation projects where they should be involved from the beginning as their team no doubt will be left figuring out the end result.
Financial Controller at Siemens Energy | Ex-Teyseer | Ex-Linde (CA, M.com)
4 年Spot on article in the context of the current and fast paced scenarios Anders Liu-Lindberg
Transformational Finance Leader | FP&A | General and Technical Accounting | Automation & Digitalization | Process Improvements/PM Skills | Change Agent
4 年Anders, you are spot on! Business is transforming and in order to remain a partner, Finance needs to be agile and flexible to meet their ever-changing needs and provide value add.