The Pedigree of a Successful FP&A Professional
Financial planning & analysis, or more commonly referred to as FP&A, is a business discipline focused on financial management and strategic alignment. To put it more simply, if a CFO’s position were broken down into its many parts and those parts were translated into separate job descriptions, most of those jobs would be in FP&A.
It may surprise many that modern finance, as we know it today, has been around for less than a century. Further, the ways in which companies manage their finances and planning has been exercised for less than a decade. Bring computing and big data in the equation, and today’s finance has been practiced for just a handful of years. Because of the rapid change taking place in corporate finance, the management of the function is evolving as quickly as ever. There has never been a more urgent need for financial planning & analysis and never a better time for career advancement in finance than there is now.
The pedigree of a successful FP&A professional may look different than that of a traditional accountant or financial analyst. While many of the building-blocks of talent are the same, the application of that talent is wildly different.
Excellent accounting skills – Despite the evolution of the accounting function away from traditional and mechanical tasks toward strategic and analytical ones, the importance of accounting expertise should not be discounted. CPAs are likely to look more like FP&A professionals than traditional accountants. That being said, those working within FP&A will benefit tremendously from a fundamental understanding of accounting.
Critical-thinking ability – The foundation of double-entry accounting ascertains that there are right and wrong answers. The accounting profession is protected by this objective black and white. However, the ideal FP&A candidate must be comfortable with ambiguity and knowing that much of the field is layered with shades of gray. Often there are many good answers and it’s up to the FP&A professional to understand the assumptions, analyze the possible outcomes, and assess the risks attributed to each. This is a different way of thinking than what traditional accountants grow up with and it’s a critical characteristic of FP&A.
Effective communication – FP&A professionals must be able to take the complex and make it extraordinarily simple. This is where the function must truly set itself apart from all others and will find much of its value. Non-financial professionals may struggle to understand the quantitative assumptions behind a decision, while financial professionals may struggle to translate quantitative assumptions into easy-to-understand terms. The FP&A professionals who can effectively exercise both talents will be indispensable members of their teams. Effective communication comes in many different forms – an ability to clearly write, influentially speak, and cleanly display visuals to translate information.
Emotionally intelligent and conciliatory – FP&A is like the financial heartbeat of organizations. Information flows to FP&A from other functional group while financial intelligence and decision support flows from FP&A to other functional groups. Being in this unique position, FP&A has the responsibility for understanding and relating to others across the entire organization in a way most other function do not. As such, FP&A needs to possess emotional intelligence in the form of empathy, diplomacy, and tact to work effectively with professionals from every group.
At the beginning of an FP&A career, development of technical skills should take priority as a means of transforming the organization from the numbers. At the time, the value of interpersonal skills shouldn’t be discounted. As FP&A professionals’ careers evolve, they’ll be likely to discover a greater focus on leadership skills and influence and less importance on technical skills. It isn’t that technical skills are no longer relevant – quite the opposite. It’s that the role of an experienced FP&A manager or director is to analyze decisions, make decisions, and develop more junior staff. That said, interpersonal skills become even more important the more senior the FP&A professional becomes. In summary, there are few positions that require such a mix between technical and soft-skills and can have such a tremendous impact on the decision-making in an organization. FP&A is an exciting career choice and the future of the profession is extremely bright.
