What capabilities must be in place?

This is the fourth viewpoint on business finance frameworks and strategies. This edition will elaborate on the next-to-last step for CFOs and organisations to take when considering how to set up a strong business finance framework.

The capabilities of finance business partners form the underlying foundation of the “What”, “Where” and “How” of business finance considerations (steps one, two and three of the Strategy Choice Cascade process). At the end of the day, it all comes down to people showcasing a certain kind of behavior, as finance business partnering is more like a personality than a job description.

As the domain of a finance business partner spans a broad spectrum of quantitative and qualitative skills, the role requires a holistic profile. In a nutshell, the capabilities of a finance business partner are a combination of hard skills (analytical and technical skills) and soft skills (interpersonal skills).

Defining the capabilities needed

Finance business partners naturally require an understanding and knowledge of the business strategy, market environment, competitors, products, customers etc. However, the role also requires a specific skill-set combination in order to fully support each of the value-adding tasks that the role encompasses. Managing data and reports may require technical skills, i.e. accounting, reporting, planning, controlling etc. Producing analyses and insights may require analytical and problem-solving skills, i.e. the ability to identify the right prob-lems, generate multiple solutions, bring forward clear recommendations etc. However, at the other end of the spectrum, influencing and impacting the business may require interpersonal skills such as listening, questioning, communicating, sensitivity, building trust and relations etc. (see figure 5).

Figure 5: Business finance capability model

By adopting this structured approach to defining the capabilities needed to support business finance activities, we can eventually develop a full competency model that can clarify the expectations of the role. This competency model can serve multiple purposes related to training, job postings, personal development plans, stakeholder feedback surveys etc.

Developing new behavior

Another important reflection related to the wide range of competencies and capabilities needed to perform as a finance business partner concerns behavior. Research in per-sonality preferences, for example, HBDI [11] and MBTI [12], shows that people tend to rely on inherent predispositions when it comes to ways of thinking, per-ceiving and judging, which often leads to a preference for certain behaviour and activities. In other words, most people do not thrive equally in all roles. Hence, it should come as no surprise that not all business finance activities appeal equally to everyone. We need to recognise that the array of business finance activities depends on employees being able to transition between very different kinds of behavior. This in turn requires a work environment designed to nudge finance business partners out of their comfort zones. For example, an ana-lytically skilled and experienced finance business partner might only need slight encouragement to reach out to the right business stakeholder, thereby unfolding their full value-adding potential. On the other hand, an extro-verted and social profile might need a lot more encouragement to spend the nec-essary time delving into the analysis before approaching the business.

Helping finance business partners explore capabilities outside their preferences might seem straightforward, but it is a task that is unfortunately often overlooked by many CFOs. A classic example that we often encounter is the financial con-troller who has been promoted to a new role as finance business partner. In this case, the financial controller often has the proper technical skills to under-stand the financial and other relevant data, but lacks experi-ence with facilitation, communication and problem-solving. In this situation, if nothing is done to foster and nourish the new behavior, it is unlikely that the finance business partner will move beyond data, reporting and analysis into the activities that truly influence, impact and create value for the business.

What do you think are the right questions to ask?

This is the fourth of a 5-part viewpoint. Stay tuned for the next part to be released shortly. If you haven't read the first two, you can find them here What is our winning aspiration?, Where will we play? and How will we win?

If you would like the full 5-part version of the viewpoint, please drop me a message in the comments below and I will send it to you.

Authors

Claus is a partner at Implement Consulting Group and has more than 25 years of experience working in finance and advising CFOs on their transformation journeys.

This article has been written I collaboration with Christian Frantz Hansen and Nicolai Worziger.

At Implement Consulting Group, we welcome any opportunity to further discuss the topic of business finance.

Notes and references

[9] Thomas H. Davenport and D.J. Patil: Data Scientist: The Sexiest Job of the 21st Century, Harvard Business Review October 2012.

[10] Martin, Roger L. The Design of Business: Why Design Thinking is the Next Competitive Advantage, Harvard Business Press, 2009.

[11] Herrmann Brain Dominance Instrument?, https://www.herrmannsolutions.com/

[12] Myers-Briggs Type Indicator?, https://www.myersbriggs.org