FP&A at the Forefront (Part 2)

The Modern Mandate for FP&A

Chief financial officers (CFOs) face heightened expectations to guide business decisions and create long-term value. They increasingly rely on Financial Planning and Analysis (FP&A) for insights and guidance, pushing beyond its traditional function into a broader, more strategic business function.

This expanded mandate requires a wider, more diverse range of capabilities. Today’s FP&A professionals need advanced technical skills in financial modeling, operational modeling, and data analysis, and non-technical skills like collaboration, communication, and the ability to translate data into business insights.

Sourcing and developing FP&A talent with such a broad skill set presents a significant challenge. Recent industry surveys, including one by recruitment agency Robert Half, highlight the difficulty in finding skilled finance professionals. A dual approach of recruiting and cultivating the skills of existing finance workforces provides an effective solution.

Building FP&A Capabilities from the Inside

Facing a shortage of finance talent, many CFOs are turning to upskilling their existing workforces to augment recruiting. This approach addresses the immediate talent gap and equips teams with the necessary expertise to meet the complex demands and new requirements of modern FP&A functions.

To adapt effectively in this changing landscape, FP&A professionals must focus on developing a specific set of skills focused on strategic decision-making and business growth. Below is a list of critical skills that should be at the core of any upskilling initiative for FP&A professionals:

Critical Skills for FP&A Teams

• Financial Modeling: Advanced forecasting and scenario analysis, coupled with the capability to integrate operational data.
• Data Analytics and Data Visualization: Proficiency in extracting meaningful insights from data and effectively presenting them to non-finance stakeholders, enabling strategic, nuanced decision-making.
• Strategic Business Acumen: Deep understanding of market trends, competitors, customers, business strategy and objectives. 
• Digital Proficiency: Digital skills, such as using platforms that automate numerous routine finance and accounting tasks and provide sophisticated, real-time insights into financial KPIs.
• Cross-Functional Collaboration: The ability to work with teams in various business areas to gather financial and business insights and inform decision-making.
• Communication and Storytelling: Effectively communicate and present financial information and data to non-finance colleagues and stakeholders.
• Environmental, Social, Governance (ESG) Analysis and Reporting: Integrating ESG factors into financial analysis and reporting.
• Risk Management and Mitigation: Identifying, evaluating, and proficiently managing financial risks to safeguard the organization’s assets and interests.

Collectively, these skills empower FP&A teams to navigate the complexities of modern finance confidently, allowing them to take on a proactive and influential role in guiding businesses toward sustainable growth and success.

Common Challenges in FP&A Talent Development

Developing FP&A teams to meet the demands of their expanded strategic advisory roles presents several challenges for finance leaders. Recognizing and effectively navigating these obstacles is critical for successful upskilling initiatives. A proactive approach to tackling these issues will help foster effective FP&A skill development, aligning team capabilities with the strategic needs of modern corporate finance.

• Varied Skill Levels: The presence of diverse skill sets within teams can lead to inconsistent knowledge levels. To harmonize this, standardizing training is key. This approach ensures a consistent knowledge base for all team members, regardless of their starting point.
• Critical Skill Gaps: One of the major hurdles is identifying and addressing critical skill gaps. Implementing structured or customized learning paths is an effective solution to equip FP&A professionals with the necessary competencies, directly addressing these gaps.

• Limited Time and Resources: Balancing work and development within tight resource constraints is a common challenge. To counteract this, incorporating flexible, self-paced online learning, dedicated training time, and microlearning formats (learning a specific skill in 3-5 minute bursts) can be highly beneficial. These methods allow for development without overwhelming team members.

• Resistance to Change: Often, there can be a reluctance within teams to adapt to new ways of learning and working. Promoting a culture of continuous learning and communicating the benefits of professional development, such as acquiring new skills, can mitigate resistance and enhance team adaptability.

• Training Effectiveness: Ensure any upskilling programs teach practical skills that employees can immediately apply to their jobs. When individuals see the relevance of their learning, they become more engaged, retain more of their learning, and make a greater impact on enhancing team performance and productivity.

A Strategic Approach to Skill-Building

When it comes to developing FP&A talent, a strategic approach is key to successful upskilling. It involves aligning team capabilities with business goals, identifying skill gaps, and enhancing areas critical for long-term success. Such a strategy ensures that FP&A teams are ready for both current challenges and future demands.

With this strategic approach in mind, let’s examine key steps to effectively upskill FP&A talent for maximum impact:

1. Align Business Goals and Critical Team Capabilities

Begin by evaluating your team’s capabilities against your strategic objectives. In addition to identifying skill gaps, ensure you understand the strengths and potential of your existing resources in the context of these goals.

Focus on how current competencies align with long-term goals and identify specific areas where skill enhancements can significantly impact your strategy. It’s important to assess both underutilized strengths and critical skill gaps, ensuring alignment with strategic priorities.

Key questions to answer:

• How do our current team capabilities align with our long-term strategic goals?
• Where do we see the biggest disconnect between our team’s skills and strategic priorities?
• Are there areas of strength we’re underutilizing or could leverage more effectively?

2. Targeted Skill Development for Strategic Impact

Integrate a prioritized development agenda with strategic talent development efforts. This approach involves identifying the critical skills required to achieve strategic objectives and prioritizing their development. It’s about addressing skill gaps and enhancing the specific competencies that drive business goals. 

Develop a targeted skill set in your FP&A team that aligns with and supports your long-term strategic vision, ensuring that talent development efforts are deliberate and aligned with your company’s future direction.

Key questions to answer:

• Which skills would have the most significant impact on achieving our strategic goals?

• How can we effectively tailor our talent development initiatives to foster these critical skills?

3. Measure Impact

Measuring the impact of your skill-building initiatives to ensure these programs directly contribute to and align with strategic goals, thereby maximizing the return on investment in talent development. In addition to providing strategic alignment, regularly assess these metrics to identify a clear, quantifiable link between targeted skill development and performance improvements.

Key questions to answer:

• What metrics can we establish to measure the strategic impact of enhanced FP&A capabilities?
• How do we track and communicate the progress of our skills development efforts in terms of contributing to our strategic goals?

4. Partner with Your Organization’s L&D Team

The L&D team is pivotal in aligning talent development with the company’s strategic objectives. They work closely with the FP&A team to identify critical skill gaps and design targeted training programs that support these strategic goals. They focus on creating learning initiatives that address immediate skill needs and prepare teams for future challenges and opportunities.

Key questions to answer:

• How can the L&D team help us create impactful learning initiatives that align with our strategic objectives?
• What role can the L&D team play in sourcing the best learning solutions to effectively build the skills we need to enhance our FP&A function?

Adopting a strategic approach to upskilling FP&A teams should address current needs and prepare for future challenges. By aligning team capabilities with business goals, targeting skill development for strategic impact, measuring the effectiveness of these initiatives, and partnering with the L&D team, CFOs can ensure their teams are equipped with the necessary skills and positioned to drive the organization’s strategic objectives forward.

Charting the Path to FP&A Excellence

In an era of uncertainty and constant change, a robust FP&A function is an asset for CFOs and a necessity for businesses. The future will see FP&A teams further integrating advanced financial and operational modeling, data analytics, and strategic planning skills, enhancing their role as advisors in shaping business strategies. CFOs and FP&A leaders who foster cultures of continuous learning will equip their teams to navigate near-term challenges and position them to drive long-term value creation.

Additional Resources

FP&A at the Forefront (Part 1): FP&A’s Evolution and Critical Skills For Success

From Vision to Reality: Essential Leadership Skills for Implementing Organizational Change

Selecting the Best Online Training Platform for Your Finance Team