Business Partnering: The Leading Strategy Towards Your FP&A Success

Welcome back to CFO Weekly, where we're talking with financial leaders about how to build efficiency in their teams, create time for strategy, and ultimately get results, with your host Megan Nice. Let's jump right in.

Megan: Today, my guest is Anders Liu-Lindberg. Anders is a partner and co-founder of the Business Partnering Institute. He's a leading adviser to senior finance and FP&A leaders on how to create an impactful finance organization. He's also an internationally recognized thought leader, with around 100,000 followers on LinkedIn. Prior to BPI, he worked for 13 years in various finance roles at the global transport and logistics company, Maersk. Anders, thank you so much for being my guest today.

Anders Liu-Lindberg: Thanks a lot for having me, Megan. I'm truly looking forward to this.

Megan: I want to start with a quote from you, and I got this from your LinkedIn page and you stated that "All finance and accounting professionals face a choice; evolve or be automated. Business partnering is one of those evolutionary paths that these professionals can take. However, despite being a desirable path for more than two decades, only a few have found the way and made it to the other side. Most are still on the journey and are having a hard time making it." Anders, I know you're a leading adviser to senior finance and FP&A professionals and an expert at partnering with the business to create value. I'm really looking forward to hearing how we can start this evolutionary journey and not get stuck along the way, so let's get started.

Anders: Great.

Megan: First, as always, let's start with you and your story and how it is that you got to where you are today.

Anders: It's a tale of two stories, I think. There's the corporate professional story and then there's the story of the creator. If we take the corporate story first, I worked for 13 years in the global transport and logistics company, Maersk. You've probably all seen the containers driving around any country that it might be in. A funny story, my wife is from China, and, of course, they also drive around China. We were once in China visiting the family and my son saw this Maersk container driving by and he said, "Hey, Dad, your office is there." I'm like, that's not exactly how it works, but it's always nice to be in a company that you can find anywhere in the world.

Anyway, I worked there for 13 years in various finance roles and my last role was as a senior finance business partner to a VP of a product with around $8 billion in revenue and $3 billion in investments on the balance sheet. A pretty big role with a pretty huge opportunity to make an impact. I served in various control roles as finance manager in the US, and project manager for the finance leadership team. I did the training, I did the development of the organization, I built organizations and I did business partnering myself. Lots of different exciting experiences there are diverse. At the same time, I was trying to build my brand in different ways, you can say. I was getting active on one, LinkedIn.

Halfway through I began in Maersk 2007. 2012, I started sharing a bit of content on LinkedIn. 2014, I opened my blog on LinkedIn. Since then, I've published more than 600 blog posts on LinkedIn, and today we have more than two weekly blog posts coming out. All that activities have led to various different opportunities like co-authoring a book as a finance business partner, and in 2016 late, a guy called Michael reaches out to me. He was working at Deloitte and thinking that maybe he should do something different for himself, create a company that could help finance professionals become better at business partnering, the human side of the finance organization.

Obviously, I was writing about this as well, so I thought, "Let me meet Anders and see where things can go." It led to the founding of the Business Partnering Institute. In 2018, Michael was the first full-time person to join. I joined as the third full-time person in early 2020, just before the pandemic hit. You can probably imagine how it is to become an entrepreneur just at that time. Interesting experience. Let's put it like that. We are three partners and the business is growing now today I spend more time doing sales and marketing and very little actual finance work, although I write and talk about finance all the time.

It's more about meeting people, meeting potential clients, and so to speak finding out how can we help them, actually, in these challenges that you just outlined in this quote you began the talk with, Megan. That's where I am today. I never thought I would be in sales and marketing, but I'm honestly truly, truly enjoying it and I truly enjoy speaking to finance professionals all over the world.

Megan: It can be a stretch to have a finance background and then be thrown into sales and marketing. I've had to do it myself, so I know it's not the easiest of transitions.

Anders: It's been very interesting, but oddly enough, it's very similar to what I ended up doing even though there was no sales involved in that, the act of selling. What we do is relationship selling where the act of being a good business partner, which is what I've worked on for my entire career is also about building relationships. It's really just taking that relationship-building skill, and using it to sell. Sell sounds so direct and offensive to some people, but if you've built a relationship when people need your help, they will come to you. If they don't, then no problem pushing it.

Megan: Tell us about the business partnering Institute. What does business partnering mean to you?

Anders: Business partnering, what does that mean to us? Well, we've put it on a formula that always works well for finance and accounting professionals. We say business partnering is when you have insights that you can use to influence business decisions to create an impact on the company. Insights are when you have information that business leaders currently do not know about, but can help them make better decisions, a wide playing field. Can be financial, can be non-financial, but it's actually come from all over the place. We just need to help improve decision-making.

However, we also need influence, strong relationships, the ability to communicate, and a good understanding of the business in order to actually gain the ear of business leaders. Because you can have the greatest insights in the world, but if doesn't influence, it doesn't matter. It's insights and times influence that leads to impact, and impact can, of course, be different things in companies. For most companies, it's increased shareholder value creation, impact on our customers and employees, and whatnot. At the end of the day, it's often some sort of economic impact. That's what business partnering is.

What we see mostly is that professionals struggle more with the influence. They have good insights, but they're not able to influence their business leaders' decision-making. That's where we have the issue. That's what we try to do and then work on at Business Partnering Institute. We do this in various different ways. We create thought leadership to help people get perspectives on how to do this. We do training and development to actually teach them how to do this, and they will do consulting to actually make them change ready for the changes that are coming.

We see great demand for business partnering assistance if you can say that, in the market right now. It's been around for 20 years as you also mentioned in the beginning. In the first decade, I think companies were trying to make it on their own. It didn't work because it's hard to actually do this in real life. Now they know they need help, and we're there to help them.

Megan: Why do you think it is so hard to do this in real life? Why is it that most people get stuck along the way?

Anders: The funny thing is that it's actually pretty easy for me to explain why this is. There are two dimensions. It's very simple to understand what business partnering is. Insight times influence equal to impact. The challenge is that it's really difficult for people to do because it's about behavioral change. It's about working with people. I ran a poll on LinkedIn last year. I asked finance and accounting professionals, why did you go into finance and accounting in the first place? Was it because you like to work with numbers, because you like to work with the business, or because you like to work with people?

Not surprisingly, only 10% said because they like to work with people. To be good at business partnering, you need to work with people, build relationships, communicate, and all this stuff. It is difficult, and because it is difficult, many companies have made it complex to understand they've made long guidelines or text around what business partnering is, what you need to do and tools, and whatnot. Think about this if you're faced with a 60-page slide deck, are you going to read it? Are you going to use it to guide you on what to do? Probably not.

No one knows what to do and they ignore the guidance they get and no change happens. We must still make it simple to understand what it is, recognize that it's difficult to do, whereby give people the proper help to actually do it, which could be training, for instance, or it could be leaders that are already doing it or giving the right organizational support. If we recognize that this is how it works, it becomes a lot easier, but most companies have made it difficult for themselves for various different reasons.

Megan: What are some simple ways that a person can increase their influence? You said that's where most people struggle, with the equation.

Anders: To us, it really starts with what we call customer focus or customer-centricity. Now when we say customer, we don't necessarily mean the external customer of the company, but we mean the customer of the finance professional, the business partner. It could be a head of sales or head of marketing or head of planning, whatever it might be, some sort of business leader. Those business leaders have important business priorities. If you as a finance professional can understand what are those priorities and come up with a plan of how to help them, you're already on a great start.

Of course, you need to learn about interpersonal dynamics and do all these personality tests to understand our preferences for communication. Sometimes, finance people, like to communicate in a different way than business leaders so we need to make adjustments in order to have a good conversation around this. Last but not least, we need good structures for how to communicate our messages, because finance professionals tend to communicate with lots of details and if there's something a head of sales, one, it's a lot of details. They want to talk about the business mission and big customers we can land and so on.

We need to communicate in different ways. Those are some of the things that we try and teach finance professionals to do differently, and if they do that, they can do good business partnering and then can have a bigger impact on the company by influencing decisions.

Megan: I'm just curious, but there's so much data available these days so how do you choose what numbers to use to tell your story, and then what is the best way to tell a story to professionals who maybe just don't understand numbers or outside of finance?

Anders: What to look for, my advice is going ask your customer or the business leader. I think too many finance professionals, and I have to be honest I've done this quite a few times myself as well, they just dump all the data into an Excel sheet or if they're lucky, they have a BI tool, and then they are looking hard at the data. Maybe they're organizing the pivot table and are like, " Where are things going wrong and what are the insights here? What does data tell me?" The data rarely tells you anything. You need to know what you're looking for. You have to ask the business leaders, what are your challenges? What insights are you looking for to help your decision-making?

Once you know that, you can go and analyze numbers. Otherwise, it's like looking for a needle in a haystack without knowing what a needle looks like. It's impossible. Go ask your stakeholders, your customers, what insights they need. Then on the other question in terms of how to communicate, well, the challenge is that, as I mentioned, finance professionals often lead with the details. Instead, we need to lead with the answer. What's the situation we're facing? What complications do we need to overcome? What are the key questions we should answer as an organization or as a team, and what is my recommendation or answer to those challenges?

That's where you start by giving the answer and then you can do the underlying arguments. Why is this a good answer? Why is this a good way forward? If they need more details, you have the underlying facts around why is this a good answer. Too often though we start with facts and we try to build it from the bottom up, but if you have half an hour and you lose them in the first five minutes, you're not going to get to slide 18 where you have your recommendations. You get lost in translation. Lead with the answer and then underline that answer and have a plan to go forward. What's your implementation plan? What does the business case look like? And so on and so forth. Then you will get the answer.

Megan: That's great advice. Are most of your client's individuals or are businesses coming to you for help?

Anders: Absolutely mostly businesses and it's usually bigger companies. We do a lot of learning programs. When we do learning programs it's typically teams of 20 to 25 people at a minimum and often we work with bigger companies that have maybe 200 people that they want to train. We run multiple cohorts over several years to ensure they all get the same language and approach to how to influence decision-making. Typically, larger engagements with bigger companies.

Megan: Are these all FP&A professionals or anyone within finance and accounting?

Anders: It's mostly FP&A professionals. Sometimes we have some more accounting or controller-related roles. Sometimes you could have a tax professional or an HR professional because they also need to be business partners, but it's really mostly FP&A. If you look in the US since it could be controllers. If you look in the European sense, but its people doing this FP&A kind of work.

Megan: What are the current trends that you're seeing in FP&A?

Anders: A lot, obviously. We published a video earlier this year on the top 10 trends in FP&A, but if I should try to simplify it a bit more, if you look at the processes, it's certainly around planning. How do we do planning differently in a world that keeps changing faster and faster and faster? What are we planning for? We just published an e-book today around planning which basically said planning as we know it is dead. Because we need to plan a different way so the process needs to change now keep doing the same old budget over and over again. It's like madness. Yes, you need some parts of the budget for different things but it shouldn't be your main point of planning.

For technology, lot happening in the technology space in FP&A these years. I follow the venture market quite close in the FP&A space and in the past two, or three years we've seen a massive amount of capital move into the FP&A tech space so it's probably a sign of some great things to come especially lots of what we call third generation tools are coming in so it's companies that have started in the last two to three years that are ready to compete with the Anaplans in the Workdays of the world and certainly not the Oracles and SAPs either, but they're more targeting, let's say, small to midsize companies that before, let's say, 5, 10 years ago, could never get near an FP&A tool.

Now with cloud and these new tool providers coming in, they can. It spells great news for even small to midsize companies to get the same [unintelligible 00:16:47] FP&A professionals can give to them. In the people space, it's all about business partnering because that's the only way we can increase the impact of the FP&A team. Because right now CFOs remain disappointed with the return on investment they're getting from the FP&A teams, so something needs to change.

Megan: I'm curious, how much automation is going on in FP&A? I had a guest not too long ago that was in the AP technology space and she mentioned that only 5% of companies had automated AP. I'm wondering if FP&A is obviously much more complicated than AP how much automation are you seeing in the space?

Anders: I think the big companies, they're absolutely doing it for their forecasting. I think the Microsoft case, is widely known by now that they use different kinds of machine learning models. I think they have six or seven models with a different kinds of input. They then put that together to prepare the revenue forecasts and not the full P&L still but the revenue forecast, and I think they started in 2016 and by 2019 they had created a model that instead of taking 800 people three weeks to create a forecast now it took two people two days, and it was two percentage points more accurate than the forecast you got from all these people working on this.

It's possible to do, let's say, predictive analytics now in FP&A and I think we will see a lot more of this coming just because it makes sense. If it's more accurate then why not? Then we can focus on instead of talking about what should the number be because how do we make this number happen or improve it if we're not happy with what the forecast looks like? I think it's it's definitely coming, but it's still early days. The pandemic has definitely pushed things in the right direction.

Megan: You mentioned that CFOs were not happy with the return on investment with their FP&A departments. How is it that businesses can better structure their FP&A to achieve its full potential?

Anders: Yes, so I think, definitely revamp the processes. If you spend the first two weeks of a month doing management reporting and then on average one of them doing planning, throughout the year, that's very little time you could actually spend facing your customers, the business leaders to help them drive for initiatives or figure out how to how to close gaps whenever there's very little, let's say customer facing time. That needs to change. I've seen various studies that suggest and we also see this when we run it on outlines that 70% of the time is spent simply just enabling us to go to business leaders to help them make better decisions.

70% of the time working with the data just to make it ready for influence. It's way too much time, so I think that definitely needs to change. I guess the whole business parting piece is about changing the mindset of FP&A professionals because they need to do something different to actually make this work. Otherwise, they're never going to have the impact that CFOs are looking for.

Megan: Do you think FP&A personnel need to take more risks, and if so what sort of risk should they be prepared to take?

Anders: Absolutely they should take more risks. I think in general if you feel about finance and accounting and FP&A professionals you probably tend to think of them as risk-averse people. I get it. That's maybe just in our nature, but if you look at it from a business perspective without risk there's no business. Unless FP&A professionals change the way they approach risk, instead of saying we need to eliminate risk in our business, we should say how do we take the right risks to our business? Then, of course, when we take risks with our eyes open we should have mitigating actions for all means but it's about taking the right risks. We need to be much more open to taking risks because right now business leaders will look at FP&A and say they're just saying no to everything because they don't like risk and that doesn't make sense.

Megan: That's definitely not partnering with anybody when all you say is no.

Anders: Exactly.

Megan: You mentioned processes before, at what point does an organization know that their process is broken or it's just not working within FP&A? When is that obvious?

Anders: Of course, it depends on how big the organization is. If I was an FP&A leader I would at least every six months do a process check to see how much time are we spending on some of the key processes, and does that prevent us from actually having that customer focus that I talked about? If the 70% remains on those key processes that it continues to run that we spend 70% running the process, and we don't change that, then you need to do something a bit more dramatic.

Obviously, companies go through different life cycles and sometimes you need to spend a lot of time building these processes then you run them and then you become a different company for different reasons. Then you need to change it. It's difficult to pinpoint exactly, but I would do these temperature checks at least twice a year to see how we are keeping up with the changes in the business.

Megan: For a company that's ready to start transforming FP&A where do they even start? Are there frameworks to follow or how do you begin the process?

Anders: There are two things to consider. The first is the change journey you're looking into, and the second is changing the mindset because the mindset change doesn't matter what you do to process this and technology. You can always find different change management frameworks, but to me, it's about understanding why we need to change. Is it because of the CEO telling us or CEO or because we are struggling as a company doesn't matter but we need to have a way for what we want to change? Then in the leadership team and it's not just in FP&A, it should be the whole finance leadership team, we need to agree that changing the FP&A is a key priority.

Because if there are 10 other priorities happening at the same time change in the FP&A won't happen. Then we need an exciting ambition or vision for where we want to go, and then change the organization to fit this vision. Then we can launch it to the organization and say these are the changes that we want to make, the organization needs to change. Here's what we're going to invest in technology. Here are some of the project changes we want to make and then we're going to train you. We're going to empower you to take action for these changes to happen.

We've planned for having short-term wins, so it's not just a new planning tool coming two years from now. No. We plan to actually have some wins in three months so we can celebrate because we need to celebrate the wins. Then it doesn't happen in six months. It can take some years to create the change you want. You might start small and then scale and then you also need to make sure that it sticks.

If you run a training program for instance once you have taken the first 20 people through and you still have 40 more to go, what happens to those training people? How do you ensure that they actually start working in new ways? You can't just let it go after the training has stopped. There are a lot of elements to consider there to take your team on the right

Megan: To get people excited about this journey how significant is an improved FP&A to an organization? What benefits does that achieve?

Anders: I've termed the opportunity as the trillion dollar opportunity, and it could probably be an even larger number but now just shows trillion because that's a huge number that people can relate to. Why do I say it's a trillion-dollar opportunity? Well, I say that because an improved or high-performing FP&A team can surely improve the epic or a bit there whatever margin measure you have with at least one percentage point in the company.

If you do that globally you take one percentage point of the global [unintelligible 00:25:04] we probably turn about trillion dollars. It's huge, and one percentage point is probably even conservative. It's a huge opportunity and that's also why CFOs know they need to get more from FP&A that they might not be getting today.

Megan: Yes. You mentioned the need to take more risks, but what other mindset should FP&A professionals develop in order to succeed in their work?

Anders: Yes so we really talk about five key shifts to make. One of them is around risks that we're really talking about. Stop wanting to eliminate risk instead of favoring trying to take the right risks. That's one of them. The second is to stop thinking about trying to minimize the cost in the company or minimize the cost of finance FP&A, so you often see benchmarks when you start the transformation and say your FP&A team costs the 0.5 percentage point of revenue benchmark says 0.3%. You need to be cheaper, but having that mindset up we always need to be cheaper really doesn't drive a business value mindset. It just drives the race to the bottom.

We definitely need to change that storytelling and say nothing about minimizing cost should be efficient all the time. Of course but we need to focus on how do I maximize business value because after all, that's the opportunity. That's the trillion-dollar opportunity we are looking at. It can be revenue, it can cost whatever it changes for companies all the time and we need to maximize that value. The third thing is we need to stop only explaining historical finance performance because we cannot change it. It is history. We might be able to find a few insights from it but it's history. Do we need to say instead how can we improve future performance?

Look at the leading indicators for financial performance, and business metrics, and spend our time there. I'd say good FP&A professionals spend at least 80% of their time looking at business metrics and thinking with their customers about how can I improve these, because after all if business metrics are going in one direction you would expect the financial metrics to follow. There might be some delay, but they should all things equal follow each other. Of course, if there's a mix-up so they don't follow each other you need to understand why, but focus on improving future performance. Fourth we talked a bit about it already but we spend so much time on the data and the reporting.

The mistake actually brings value to the company, but all we are doing is just telling people business leaders what they already know. They might not know if sales are up at 2%, 3%, or 4%, but they know if sales are up or similar to down. It's not really helping them. We need to come up with those relevant insights, something they don't know but can help them make better decisions. Last but not least is the fifth shift, and to me, this is actually the most important one. Stop thinking we can succeed through reaching our own objectives, FP&A finance at large, we are there because there's a company. The company is not there because of finance FP&A, so we are succeeding through others.

I think this is very very important for all finance and FP&A professionals to understand, that we are succeeding through others. We need to change that mindset and say how can I help my business leader be successful and accept that you cannot be a success yourself if your business is not successful. It just doesn't work, and I think if we can make this shift we'll suddenly get a lot more behind acceptance for the sales leaders out there, the marketing leaders out there. Suddenly they're like okay if is not here to beat me up they're actually here to help me succeed because if I don't succeed they don't succeed so let's do this together.

Those are the five shifts to make, and if you can change that mindset from a cost center to becoming a profit driver or value driver, that's huge but that's also web start.

Megan: Yes. As you mentioned teamwork is so important these days, it's time to break down silos and work across the organization to improve the business.

Anders: Absolutely. It's all we should be doing there. There's no other, okay maybe there might be some control and compliance if we're in accounting but otherwise, there's nothing else we need to do. That's it.

Megan: Based on your own experience what advice would you give to someone who's hoping to get into FP&A or maybe just starting out in FP&A to help in their career?

Anders: Start with the right mindset. If you have to benefit I would say the benefit of not having had 10 years of experience in FP&A and maybe being set in old ways, then start with that new mindset. Then always think about how can I improve, and how can I change the time you spend working with data and reporting and analysis, in favor of working with insights influence and impact. Of course, if you are just starting a new FP&A and you're a financial analyst. you're going to the CEO or the CFO or whatever, and present your insights, but you're enabling someone else to do so, and so help them in that in that space but start with the right mindset. I think this is my best advice.

Megan: Lastly, you've given out a lot of great advice today, but if someone listening to the podcast were to remember just one thing, or take away just one thing from this episode, what would you want it to be?

Anders: I'll probably take it all the way up to the highest possible level of what FP&A should do. We didn't talk so much at least not directly today, but what is FP&A's mission in a company, it is to drive the right choices or even sing the strategic choices in the company. That's where the value is created. If you're not driving the right decisions and making choices for your customers, and your business leaders, then you're not adding so much value.

You need to be up there all the way at the strategy table down to execution and the feedback loop back again, and that requires probably the ability to change the form of some things, change the process, use better technology, change the mindset, train the people in all these things that are involved in the transformation. That's what I've been able to do, drive those right decisions and choices in the company.

Megan: For listeners that want to get in touch with you and learn more, what's the best way for them to do that?

Anders: You can always reach me on LinkedIn. It's my primary channel for everything I do, I post content there daily. I have my two blocks or newsletters with close to 160,000 subscribers today, so you can go and subscribe to those, there were three you'll get an email whenever I pop something. There are lots of ways to reach out to me, interact with my content, and get the latest insights from BPI and myself.

Megan: Anders, thank you so much for being my guest today.

Anders: Thanks for having me. I truly enjoyed it.

Megan: I've really enjoyed speaking with you and hearing about your experiences and all the resulting insights that you've gathered along the way. Wish you and the business partnering Institute all the best, sounds like you're both doing really amazing things for the FP&A profession and finance and accounting in general, so thank you for that.

Anders: Thanks, Megan.

Megan: To all of our listeners, please tune in next week, and until then take care.

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