Key Competencies For Finance Business Partnering

14 September 2020 Arti Tawani

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As companies worldwide struggle with rapid geopolitical, demographic, technological, and competitive changes, finance business partnering offers an opportunity to create a strategic advantage.

The complex and volatile environment forces midlevel managers to make more operational decisions that can impact performance. In a 2018 global Gartner study, 61% of business decision-makers and finance executives reported an increase in the number of operational decisions in the past three years. More than half (57% of respondents) said operational decisions have financial implications and impact profitability.

The Gartner study suggests that poor operational decision-making could compromise upwards of 3% of operating profit before depreciation, and that is not a small number.

It is then no surprise that business leaders need and seek active partnership and collaboration from finance professionals who can understand the goals and overarching strategies of the business, analyze financial and non-financial information, and present recommendations to support their decision-making.

While business leaders are happy for the finance team to continue playing the roles of the operator (FP&A, core finance, etc.) and steward (compliance, controls, etc.), today's leaders want finance team members to increasingly focus on being strategists (collaborate with business folks to support strategy formulation and decision-making) and catalysts (challenge the status quo and champion finance as well as enterprise-level transformation).

In a loose way, the latter two roles form the essence of finance playing the business partner role. 

Finance business partnering is what finance teams do when they create value by providing insights (often data-led), thus influencing their business counterparts to make better decisions. 

The leadership hats I wore at Walt Disney Southeast Asia (and in companies I worked for before Disney) — including business operations, sales and distribution, general management, strategy, and business development, and, of course, my core area, finance — convinced me of the difference such partnering can make to the business and, indeed, to one's own career.

Now, as a leadership coach and corporate trainer, I like to champion this partnering through workshops, where I am often asked what skillsets equip finance professional to be a good finance business partner. My response is that it requires a set of new and enhanced skills and a change in our mindset.

But ahead of all that, it is critical to get the basics right: Do the steward and operator roles really well; deliver timely, error-free financial and operating results with unquestionable data quality. Without high-quality systems and data, you will get bogged down in reconciliations and lose insight opportunities, draining your time and credibility as an effective partner.

Next, work on the key competencies required for a finance business partner. From my own experience on both sides of the partnership and my extensive work with business leaders, I have developed a road map that I frequently use in my workshops (see the chart, "Key Competencies for a Finance Business Partner"). 

These eight skillsets and six mindsets, based on my experience and conversations I have had with other CFOs, are at the very heart of successful business partnering and crucial for aspiring finance business partners.

To illustrate, a finance business partner who grasps the larger goals of the business and appreciates the changing market landscape will be able to work with the CEO and business unit heads to determine the key drivers for success in each line of business. From that, the finance business partner will arrive at a common understanding of the key performance indicators to be tracked and how they are to be computed.

If we were to think about which of the 14 competencies are flexed in this instance, those that come to mind include intellectual curiosity, commercial acumen, strategic thinking, business insight through analytics, stretching beyond the comfort zone, a bias for action, and probably a few others. Depending on the industry and the specific role a finance team member plays, some of these competencies may be more important than others. 

Skills to learn

If you wish to equip yourself with these competencies and become an effective finance business partner, here's what you can do, starting today:

  • Work to improve your commercial acumen. Understand the value chain of your organization, and update yourself on industry developments, the competition, the economy, etc. Step out from behind your computer to walk the shop or retail floor, spend time getting to know members of the operating and sales teams, take on projects that give you cross-functional exposure, and follow trade publications and podcasts.
  • Network with fellow professionals outside your organization to share war stories and learn from each other. Join offline and online forums to learn how the latest technological developments can be leveraged to improve finance department productivity and help your business counterparts.
  • Seek opportunities to learn and practice your written communication and presentation skills.

And my bonus tip for you is to reflect on what you are going to start doing to add more value and what you are going to stop doing to free up time and mind-space.

By Raju Venkataraman, FCMA, CGMA