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Building the Finance ‘A-Team’ of the Future

Jun 07, 2016

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Nilly Essaides, Director & Practice Lead, Financial Planning & Analysis, AFP

Today, there’s a talent gap in the finance department.

The numbers don’t lie:

  • The top investment finance executives plan to make is in upgrading the skills of their finance staff. Source: Accenture.
  • Only 24 percent of CFOs think their team is up to the task of integrating enterprise-wide information. Source: IBM Institute for Business Value.
  • 60 percent of CFOs look outside their organization for the next finance leader. Source: Deloitte.
  • 64 percent of finance executives report that financial planning and analysis (FP&A) positions are the hardest to fill. Source: APQC.
  • 75 percent of finance executives say FP&A is not well aligned with business strategy. Source: APQC.
  • Nearly 75 percent of CFOs said talent management and skill shortage will have the biggest impact on their future role. Source: Adaptive Insights’ Q1 2016 CFO Indicator Survey.

And yet, building a successful finance team is a huge issue for CFOs. Deloitte’s Q1 2016 CFO Signal Survey indicated CFOs expect to embark on a wide range of efforts to improve the performance of their finance teams before the end of 2016, ranging from strategic and structural shifts to tactical changes in acquiring and developing staff. Particularly prevalent were efforts to improve talent management and development practices and also to strengthen the role finance plays in supporting the business.

Why the talent gap?

Four drivers are making it harder for CFOs and senior FP&A professionals to find new talent:

  1. The growing unpredictability of the business environment
  2. The expanding role of the profession
  3. The advent of big data
  4. The evolution of technology.

Combined, these four forces highlight the growing chasm between what hiring managers are able to find and the kinds of skillsets they want to acquire. Finance chiefs increasingly want to hire FP&A staff with a lot more than Excel and analytics skills. At the same time, the role of FP&A is to serve as the CFO’s right hand, to drive business change, and to ask the tough questions—which requires new competencies, including knowledge of operations, influencing abilities, business partnering and soft communication skills. Meanwhile, as new tools are becoming available for both optimizing and automating low-value tasks and advancing analytics through big data, companies are looking for candidates who are also tech savvy. Ideally, they would like to hire candidates who have experience working with financial consolidation systems and advanced data analytics.

Adaptive Insight’s Chairman and Founder, Rob Hull, said CFOs face two main challenges:

  • First, “the future finance team needs to be skilled not just at looking at financial data but at understanding the business model and having good communication skills to engage business teams and translate data into insight.”
  • Second, according to Hull, the finance team is ever more at the center of a growing volume and confluence of data and is tasked with making sense of it. “As a result, it requires a continuing degree of skill -- and an ever changing skillset-- with respect to being good technology adopters, data analysts and facilitators of taking data and turning it into business decisions.”

As the business and financial environments become more volatile, FP&A professionals must become comfortable with being uncomfortable. They need to make recommendations to management sometimes based on limited data and be more agile in their responses to business change.

According to David Axson, managing director of CFO and enterprise value at Accenture, new skills requirements parallel changes in the behaviors and responsibilities needed in finance. Far more than just a steward of the company’s financial wellbeing, finance also protects the business’ profit against risks, assesses new avenues of growth, and drives innovative insights and value-added analysis to improve business performance. Good FP&A professionals are the ultimate storytellers, providing the meaning behind the financial figures. Owing to this expanded role, finance professionals often now balance core business and finance responsibilities to help the business as a whole, thus putting a premium on skills beyond those traditionally valued by finance.  AFP’s Guide to Addressing the FP&A Talent Gap offers a clear view into the challenges FP&A departments face today, through conversations with experts and six practical case studies detailing how practitioners are facing the challenge posed by the talent gap—and finding solutions.

What to look for

These are the five top skills successful finance professionals should develop:

  1. Foundational finance: There’s no substitute for the fundamentals.
  2. Business acumen: The FP&A executives of today must be comfortable outside the walls of their own department. They need to understand the business model and its link to strategy.
  3. Interpersonal, educator and diplomacy skills: Finance executives need to work closely with business leaders and often create change through influence and consensus building. They need to learn to speak the business language and tell stories rather than share numbers. Their role is to raise financial awareness in the organization.
  4. Intellectual curiosity and innovative thinking: FP&A is increasingly about asking the tough questions and questioning the status quo. Just accepting things because it’s the way they’ve always been done is no longer good enough.
  5. Comfort with technology: Big data and advanced analytics are increasingly in the realm of finance, as are more sophisticated planning tools. In many companies, finance is becoming the analytics hub of the organization. Successful professionals need to become familiar (even if not necessarily fluent) in new technology tools and concepts.

Closing the gap

“It’s no secret that among the challenges CFOs face today, finding and retaining talent remains arguably their most prominent—and frustrating,” said Jim Kaitz, president and CEO of AFP. “Study after study points to a widening chasm in the level of talent companies seek to make their finance departments a more integral part of their business. But the real disconnect lies in what leadership is actually doing to fill the void,” Kaitz said.

Building the “A-Team” of the future begins today. CFOs need to work with the senior executives to identify, onboard and retain top talent, then continue to develop that talent.

Here are three things CFOs can do to improve their chances:

  1. Get top-level involvement. The Hackett Group found that companies that were better at talent management had CFOs who exhibited two times higher engagement in the process, and CEOs who were four times higher in their level of involvement.
  2. Find the right training. According to Kaitz, CFOs from every industry are going to continue to face increasingly growing talent gaps without professional development tracks, education, and specialized training for their finance teams. Perhaps even more important is ongoing training and development so that junior people can keep up to speed and move up the leadership ladder, giving CFOs the opportunity to hand off the baton more seamlessly. For example, AFP is offering the Certified Corporate FP&A Professional designation, a process which includes mastering a comprehensive body of knowledge and passing a two-part exam. In fact, according to the Wall Street Journal, it’s a viable—not to mention cost-effective—alternative path to an MBA.
  3. Finally, create thinking time. One of the statistics The Hackett Group keeps is related to what percentage of their time finance professionals spend analyzing data vs. prepping it. This varies by process but peers generally spent 1.5 to two times more than top performers collecting and compiling data. “This ranges over the years and seems to slowly be going down,” said Jim O’Connor, principal, The Hackett Group. That gap will need to close as well, if CFOs are to build their dream teams. The lesson: companies that keep the routine to a minimum will be able to give their talent a chance to develop new and strategic skills.

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