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To Better Do Its Job, FP&A Must Walk the Line

  • By Bryan Lapidus, FP&A
  • Published: 8/3/2017

A few years ago, I started a new management role by knocking on doors.

I was assigned to a sales person and we spent a day driving around Baltimore, knocking on the doors of doctors’ offices, chatting with secretaries, schmoozing office managers and if we were lucky, even talking to doctors who could ultimately prescribe our services. Then I did the same for a week in Austin and San Antonio. I also went to the medical lab we ran in North Carolina and walked the floor, asked about liquid chromatography with mass spectrometry, and I attended the annual meeting of the sales team in Florida.

FP&A needs to get out from behind the desk and spend time with business partners. While it is possible to build financial models from your home base, and to fit the world into the neat drivers and calculations of the financial model, that will ultimately limit our effectiveness. To be at our best, FP&A must be in the people business, and we need to build relationships with our business partners who are on the ground in sales, the lab, and the warehouse. We need this first-hand understanding of the operations if we want to take a role in strategy and guiding the direction of the company. Financial analysis in the vacuum, removed from the operations of the company, will limit our effectiveness.

In the new FP&A Guide to Integrated Business Planning, sponsored by Anaplan, Lawrence Serven, director of advisory services at KPMG, discusses an example of FP&A members at a utility company who went out with the crews to repair lines. The result was that “when that area had to make a big decision, the business planners had developed relationships and credibility and had earned a seat at the table.” When the business-unit leaders address decisions they know will have big financial impacts, they now ask FP&A to sit in.

The Wall Street Journal interviewed Tara Comonte, the new CFO at Shake Shack in which she talks about same-store sales metrics, stock price, and revenue forecasts. The article also notes that every new employee at “The Shack” has to spend a portion of their on-boarding in the kitchen in order to know the business, the employees and the customers. In starting at a new company, she says it is important to identify and keep the cultural feel of the company.

“I can’t help this company if I come in and try to put in practices or systems or processes that happen to work for me elsewhere,” Comonte said. Even after the mandatory part of her in-store training, she plans to continue visiting and working in the stores to gain additional insights.

Bryan Lapidus, FP&A, is a contributing consultant and author to the Association for Financial Professionals. Reach him

For additional insights download the FP&A Guide to Integrated Planning, underwritten by Anaplan, available for a limited time to registered users of the AFP site.
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