This article is the Second in a Series on ‘How to Transform Finance to Add More Value to Your Business’
In my first article in this series I shared with you our research showing that only 25% of CFOs are delivering financial benefits from Business Partnering, despite the fact that 70% want to transform their Finance organisations to deliver more value to their business.
In this article I’ll take through the Top 5 Business Partnering Levers you need to pull if you want to be one of the 25% successful CFOs - how to deliver ‘Valuable Business Partnering’.
Really successful companies pull all 5 Business Partnering Levers. As a result they’re able to deliver extraordinary business value.
But the harsh reality is that most companies pull only one or two of the 5 levers as part of their transformation journeys. That’s why they leave most of the business value on the table.
Lever No. 1. Agree the Business Value Priorities and Opportunities.
“It’s hard to get buy-in from my commercial colleagues that we really can deliver value as a team, and not just be providers of information, or owners of the budgeting process”, according to aUK FTSE 100 Finance Director.
Start with the business. What are the most important business decisions? Which decisions are material or risky? Is Finance really involved in decision-making today or just providing information as input to the decision?
Agreeing the ‘business value opportunities’ is the first lever for a good reason – it’s the most important lever to get right.
Yet this is the lever that most CFOs skip over, or pay lip-service to.
It’s easy for business leaders to logically agree that Finance should change its role to add more value to the business.
But do you really have the emotional commitment from the business that Finance should drive strategy, genuinely influence business decisions or drive business performance? That’s a bit harder to agree to!
I’ll show you how to identify and agree the business value opportunities in a future article in this series on business partnering.
Lever No. 2. Establish a ‘Business-Value’ Finance Organisation.
Segment the ‘business-facing’ part of your Finance organisation into areas of specialisation. For example consider separating out reporting or analysis roles from business partnering.
The goal is to unburden your business partners from day-to-day number crunching. Too many business partners enjoy double-checking and playing with numbers, instead of focusing on working ‘in-the-business’ influencing business decisions to drive value.
Lever No. 3. Develop Advanced Business Partnering Skills and Capabilities.
In our Best Practice Report we identify the 20 capabilities needed to excel at business partnering in 4 ‘Capability Quadrants’.
We also show you some of the most successful techniques that companies are using for developing ‘Foundation’ and ‘Advanced’ skills.
If you’re in the early stages of business partnering you should focus on ‘Value Finance’ capabilities, such as providing analysis and insight, and ‘Business Acumen’, such as proposing business solutions. These capabilities will give your team the all-important credibility with the business.
If you’ve been practicing business partnering for a while, and looking to shift from ‘Good to Great’, then focus on developing the more sophisticated skills of ‘Engagement’, such as challenging and influencing decisions, and ‘Leadership’, such as becoming a trusted advisor.
It’s worth taking a look at our best practice report and asking yourself the question – do my finance team have all these skills…really?! You can download a copy from our website at www.arcusc.com
I’ll be covering a lot more about the most successful techniques for developing Advanced and Foundation skills for finance business partners in future articles in this series.
Lever No. 4. Free Up Time for Business Partnering.
One of the most common traits of business partners who have been in role for a while is to lose sight of where they’re spending their time. They can get bogged-down in low-value activities if they’re ‘embedded’ inside business units. It pays to have a ‘nitty-gritty’ clean-up from time-to-time, and to re-define where everyone should be spending their time.
For early stage companies, freeing up time to focus on business partnering usually means re-designing ‘back-office accounting processes’ and ‘middle-office management reporting’.
“We could probably do business partnering in Week 3 of the month” a senior Finance Manager from a very large organisation recently said to me. ”But the rest of the time we’re just too busy closing the books, producing the management reports or re-forecasting!”
Lever No. 5. Provide Meaningful Business Management Information and Collaborate.
Finance departments often generate reams of data, especially at month-end. But do you know how much of it is really used for making business decisions?
80% of business decisions are about looking forward and influencing the future, rather than looking backwards. Ask yourself how much of your management information is about looking forward, rather than reporting the outcomes of the past?
In future articles in this series I’ll be showing you how to tackle each of these 5 Business Partnering Levers in your company. And we’ll take a look at some real example case studies to see what’s worked in other companies, and what’s not worked!
First up in the next article will be Lever No. 1 – How to identify and agree the ‘business value priorities and opportunities’.
But first, ask yourself these questions:
- 1. Which of the 5 Business Partnering levers are you really good at in your company?
- 2. Which lever(s) would make a big difference in your organisation?
If you’d like to read our Best Practice Report on Finance Business Partnering please go to our website www.arcusc.com to download a copy.
By Adrian Willmott, from: www.arcusc.com