What will this ‘Next Normal’ mean to FP&A and CFOs
It is hard to believe it has been a year since the pandemic hit our shores. Who remembers two weeks to flatten the curve?
Two weeks became four weeks, weeks tuned into months and now we are just seeing the fog of COVID-19 starting to lift. Vaccinations and herd immunity is on the way to us returning or reimagining the ‘Next Normal’.
What will this ‘Next Normal’ mean to FP&A and CFOs? At the end of January, I had the chance to join Larysa Melnychuk and a panel of global FP&A experts in a discussion to determine what we learned through the pandemic and what it means for our collective future.
Meet the panel:
- Larysa Melnychuk, Founder and CEO at FP&A Trends Group
- Beired, Global Director Financial Planning & Analysis at Guardian Industries
- Pras Chatterjee, SAP Senior Director Product Marketing, Planning & Analysis
- Christopher Saxe, Chief Financial Officer at SecZetta Inc.
- Marc De Haas,Global Finance Director – Cocoa & Chocolate – Cargill
- Tom Hood, EVP Business Growth & Engagement AICPA-CIMA
One participant summed it up well in a LinkedIn post, “It was a great panel and Marc de Haasnailed it with radical business partnering for the ‘Next Normal’. Christopher Saxe captured the ‘Next Normal’ in Survive –> Stabilize –> The “Next Normal” It is time to set our sights on the ‘Next Normal’ NOW!”
The Top 10 Trends facing FP&A:
- XFP&A – Pras & Marc
- Artificial Intelligence & Machine Learning – Pras
- RPA – Robotic Process Automation – Pras
- Integrated FP&A Process – Alex
- Scenario Management – Alex & Chris
- Predictive Analytics – Alex
- The Next Normal – FP&A Business Partnering – Chris
- Bridging the Strategy-Execution Gap – Marc
- Driver based Performance Management – Marc
- T-Shaped Professional – Upskilling and Reskilling your team – Tom
You can get a copy of the full presentation slides here.
The major themes were the focus on technology (AI/ML/RPA/ Data Analytics) and the need for constant forecasting and analysis demanded by the impact of the pandemic on business. Several presenters focused on the need for X-FP&A, X for cross-functional business partnering (57% were already there or moving in that direction). I found it surprising that among the 600+ participants across the globe, only 32% said they had robust multi-dimensional scenario planning.
Another important question: Does FP&A and Accounting/Finance have a seat at the strategy table?
- Only 36% of participants said “always involved early and bring valuable insights”;
- 24% said ‘always asked to provide financial analysis, but no more;
- 29% said ‘Sometimes involved, sometimes left out.
Which brings us to the closing point about talent and what I find as a major insight from our work. Often the focus starts with technology, adding the latest tools and technologies to finance and accounting. Yet as we do that, we stretch the skills and capacity of overloaded finance / accounting teams. In fact, 90% of CFOs say that their teams lack the skills needed for this new environment we find ourselves in. The result is a growing talent-performance gap – the difference between sufficient staff capable of value partnering and well versed in leadership, sense-making, collaboration and story-telling and staff lacking these skills. The result is that despite the need for finance insights, the C-suite does not rely on the finance team, thus the results above.
The T-shaped Finance/Accounting Professional
These critical ‘success skills’ form a horizontal band that we believe needs to be installed on top of the deep accounting and finance skills sets currently in your team. That is what we mean by the T-shaped Professional (see slide 9). These skills were ranked by participants as follows (slide 8):
- Strategic & Critical Thinking (29%)
- Collaboration & Communication (Partnering) (29%)
- Anticipation and Agility (21%)
These skills form the basis for our work creating learning plans with corporate accounting and finance teams. Think about it this way, instead of Artificial Intelligence automating our jobs, think about Augmented Intelligence (inspired by Tom Peters) allowing us to harness the power of technology AND add value and insights to our businesses.
Bottom-line is that if you automate you must elevate and accelerate the skills of your team!
Thanks to Larysa for hosting this panel and my fellow panelists for an enlightening discussion about how we can all prepare for the Next Normal, NOW!