‘Cracking the code on business partnering‘

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Welcome to this CFO Club Africa podcast, each week we speak to leading finance professionals from Africa and across the globe about their journeys and their insights on the ever-evolving landscape that CFOs and those in finance operate in.

This week we are very fortunate to be joined by Anders Liu-Lindberg. Anders is a bit of an influencer in the finance space, his LinkedIn has over 100 000 followers. On his content channels Anders shares insights about how finance professionals can move from the back office to becoming business partners. He particularly focuses on the role of finance planning and analysis or FP&A, which he regards as undervalued in modern business culture. Anders is based in Denmark, and he graciously gave us some of his time earlier this week.

Anders, for listeners who aren’t familiar, can you tell us a bit more about your journey, your advocacy and the work that you do around getting financial professionals to take financial planning and analysis more seriously.

I’ve firstly been on a journey myself as a FP&A professional, where we live through times where technology and automation has changed the way we’re supposed to work and the way we’re supposed to have an impact in the company. For me, that’s when I went through the term of business partnering, I was told that term more than ten years ago and I’ve spent most of my corporate career trying to become a business partner and I worked in different business partner roles.

What business partnering is, it’s an activity where finance goes together with people from sales and marketing and operations and help them make better decisions, so use all the knowledge and insights that we have from the numbers.

My journey was probably not unlike most other finance professionals who are trying to become business partners, it was hard because there was no guidance, no one telling me how to do it.

It basically came down to you’ve got to do it, I don’t know how, but you figure out a way. So I spent ten years trying to figure it out and I feel like I cracked the code at the end of it. But I was blogging about my journey along the way and so ever since 2012 I’ve been writing, talking, discussing about what should be different in finance and FP&A, and it’s grown significantly since then.

I started my LinkedIn blog in 2014 and that has almost 200 000 subscribers, I started posting regularly on LinkedIn from 2017 and now there are 115 000 followers there. I just want the journey for everyone else to be shorter and easier than mine because I have experienced how gratifying it is when you then become that value-adding FP&A professional. So I want everyone in this field and in this profession who wants to go in this direction to have a better time than me because it’s just so great when you get there.

In simple terms, it’s to come with insights and information that business leaders don’t know about that can help them make better decisions and be able to influence those decisions through having good relationships, being able to communicate, understanding their business. Then if you do that, you’ll have impact, meaning better decision making, more value created. So it’s insights times influence is equal to impact. What finance professionals have mostly struggled with is really this influence piece because it’s not natural to us.

Business partnering is an activity that happens together with other people and if you ask finance professionals why did you go into this field in the first place, 55% say because of the numbers, 35% say because of business and only 10% say because of the people.

I would encourage our listeners to have a look at the blogs that you’ve written that lay out how you make this transition to business partnering. The one that stood out to me the most was The Ten Commandments of Planning and Forecasting, and I was hoping that you could elaborate on some of the commandments, particularly number four, Thou Shall Not Lend Target-Setting Forecasting and Resource Allocation in the Same Process. Can you unpack that for us.

I guess I can first pack it and then I can unpack it because it’s all packed together in the process that we know so well, the budget. If you ask how many companies are still doing budgets, it’s 90%-plus, so all companies in principle are still doing budgets. The challenge with a budget is that you’re trying to achieve too many things at one time.

So it’s your target, where bonuses are tied up to for the year, it’s your forecast and by all means many companies have now adopted rolling forecasts, so they’re doing more forecasting than just budgeting and then there’s also the time when you discuss who should have what resources. Target setting shouldn’t be a short-term thing, it should be linked to your long-term strategic goals. So we need to ensure that we have a process that looks long term and not just one financial year.

Forecasting, yes, reality changes so fast these days, so we need to frequently, in a cycle that fits our business, do the forecasting as needed, so that we can’t just be tied down to a budgeting process. With resource allocation, because the world is so dynamic, opportunities and risks are bound to appear at any time during the year, and if we’ve then tied down most of our available resources in our budget, it’s going to be very rigid to untie it and distribute it elsewhere. We need to have more liquid resources so that we can grab these opportunities or mitigate risks that we might encounter along the way.

There are these ideas that you’ve outlined in the ten commandments and in other blogs about how finance professionals can become more business partnering, and I know that you’ve done work now with your company at the Business Partnering Institute, can you give us an example of a company that perhaps had a more old-school approach when they approached you and how working with your company in implementing some of these ideas has changed their landscape.

I’ll give you a very, very simple example because I think looking at a company level, where things often get complex, and it can be difficult to say this was the exact impact of that change, but I’ll boil it down to one participant who went through one of our training programmes.

Before going on this programme of management reporting, which is something we all do in finance anyway, he had a management report that was based in Excel and I think it had 14 columns and 20 rows, different scenarios and variances and accounts. He had used red and green to highlight what’s above and what’s below, and he had lots of comments all over the place on this sheet. If I’m trying to be the receiver of this sheet, let’s say the head of sales, I get this sheet and I think what is this, I can’t work with it, it’s too much, what’s important, what do we need to focus on. Even if you have green and red, I don’t know which variance is the most important one.

He went through the training and realised this clearly doesn’t work. So he took this big Excel sheet with all the rows and columns and I’m going to make two slides. The first slide is your summary of everything on that big sheet, which had two columns, four accounts, and it had four comments, two green and two red. Now, that I can comprehend, no matter how little I know about numbers, that makes sense.

That’s a transformative difference of your management reporting because if I ask what is the end result of your management reporting, only 20% of finance professionals across the world have a recommendation in there, a lot of it is just data information. It’s nice to know but it doesn’t really help anything.

So that’s the simplest but also the most transformative example of how working with us makes a difference and this participant is a much better business partner than he was before.

You still need to do all the analysis but just don’t show it because they drown in all these numbers. But you need to know your numbers and you need to be able to tell what’s most important here. You need to be able to show here’s the big analysis but then do you really want me to take you through everything and maybe people want you to go through everything once or twice to build that confidence but then when you’ve done it you have shown that I know my numbers, so don’t worry, I’ve got this. Then you can move on to a much better conversation and actually taking action on your insights.

We always ask our guests for book recommendations; can you recommend the three books that have had the greatest influence on you as a professional and maybe even as a person?

The first book, it’s difficult to pinpoint how it has helped me, but it has helped me to transition from corporate into consulting. The book is called Let’s Get Real or Let’s Not Play by Mahan Khalsa, essentially, it’s a book about selling and the thing that stuck with me was that we need to develop solutions that exactly meets the needs of our clients.

That’s what you need to do as a consultant but it’s also what you need to do as a business partner, you need to develop solutions that exactly meet the needs of the stakeholders that you support, otherwise you have no value.

The second book is Strategy Beyond the Hockey Stick by McKinsey & Company. You mentioned the ten commandments earlier and it’s shaped a lot of my thinking in terms of what is it that we need to do in terms of planning and forecasting, which is what FP&A spends most of their time on. It also led me to form a new mission statement for FP&A, which is to drive the right strategic choices in the company. So you need to be talking about strategy, not operational numbers and tactical numbers because you sit there as a business partner to the CEO and to the board, they decide on strategy, and you need to be there and be that helping hand to guide them on the right choices to make.

The last book and now we’re really talking strategy, but the book is Playing to Win by Alan Lafley and Roger Martin, where they take us through their Playing to Win framework, using Procter & Gamble and their success in the recent decades as an example. Our mission is to drive the right strategic choices but, of course, we also need a framework of how to do that and Playing to Win gives us that framework.

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