Commercial finance and FP&A were the top areas that organisations were looking to invest in during 2018, according to BIE's Finance Succession Planning and Transformation Report.
This is no real surprise as we see organisations drive towards an increased use of technology and decision support functions, as well as using analytics to predict and develop decisions for the future. Everyone is looking to the future which naturally means the focus is on planning and commercial support.
The current drive for productivity
The current drive for growth means a focus on productivity. This was also reflected in BIE research, with productivity, cost reduction and talent development cited as the highest team priorities over the next 12 to 18 months. The reality is that as organisations come off the back of a cost reduction transformation, they must drive productivity to achieve more business growth. There simply comes a point where you can’t take any more cost out, you have optimised processes and the only other alternative you have is to grow.
Thinking ahead - back to cash?
We are currently in a cycle focused on growth. But at some point, we’ll hit a market correction, and the focus will come back to cash. We’ve seen this happen twice over the last twenty years; a shift from FP&A and commercial finance back to rigorous financial control.
At the moment we’re generally riding the wave of business growth, but eventually the wave will break. It's a bit like getting dumped off a surfboard and hitting the sea bed, it really starts to hurt. In fact it's 10 years ago today since Lehman Brothers went bust and the financial world ground to a halt. We all had to lick our wounds, get back on the board and paddle like our lives depended on it. We reverted to a focus on cash being king and absolute financial rigour.
It goes around in cycles, and we are all wondering when the current wave is going to break. This is going to happen again and when it does happen, we will need people who can run a tight ship on cash flow and make tough decisions on who they’re paying and who they’re not.
Engaging younger generations
Younger generations in the workplace are bringing with them different expectations, and companies are adapting their working environments to suit them. But what does this mean for the finance function?
Certainly, from a finance perspective there are some tasks that can be completed at different times of the day that make flexible working a manageable option. Reporting is a prime example. As long as you are hitting reporting deadlines, it doesn’t matter when the work gets done. However, if the business wants to grow, younger employees need to be around more senior staff so that they can learn from them. And this relies on everyone being present in a physical workspace at key times during the week.
On the commercial finance side, as the supportive network behind an organisation, employees really need to be present within the workplace as the job relies on building a strong relationship with the rest of the company. It will be interesting to see how companies tackle the evolving needs and expectations of the workforce. One thing for certain is that we do need to understand the younger generation more in order to attract new talent to our organisations.
Preparing for the future
With the current focus on investing in commercial finance and FP&A talent to drive productivity and foster growth, we are reminded of how important it is for organisations to engage in appropriate succession planning. We also must not forget the fact that at some point, the urgency will shift back to cash management. For this reason, it’s important to build a flexible and well-rounded finance function by giving people the opportunity to work in other areas, if only for a short period. The challenge many finance leads face is giving individuals the chance to learn new skills, versus delivering the business requirements on a day-to-day basis.
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