Table of contents
Introduction
Business partners act as a link between the various business functions to generate value and increase efficiencies inside an organization. One way for them to amplify their impact and effectively drive change, especially within the finance function, is to become more strategic. That is to not only understand the long-term goals of the company, but also how internal and external forces affect it, in order to effectively support executive decisions across all business divisions. If you are looking to maximize your impact as a finance leader this year, then becoming a better strategic business partner is the way to go. Here are 3 areas you should focus on to make it happen in 2024.
1. Elevating your business acumen
Business acumen is the foundation upon which strategic thinking is built. It is essentially knowing the factors around how a company makes money, what can help it make more, or what might get in the way in the future. You need that foundation as a strategic partner to be able to anticipate and model future situations, while taking into consideration how different decisions or actions may affect the business.
To build or strengthen that foundation, you should master the industry you operate in and have a clear picture of what success looks like for your organization.
Master your industry
Moving from a Controller role in a B2G company to an FP&A Manager at a pharmaceutical company was a huge shift for me. It felt like I was starting from scratch, learning about revenue drivers and product cost structures to effectively lead the budget and forecast process. It reminded me that the skills and strategies that lead to success in one role or company might not necessarily work in another, even within the same company. You need to do the ground work.
Study your organization and industry to answer these questions:
- Which current market and technology trends are affecting your industry?
- What is the impact of legislative and regulatory changes on your industry?
- Which socio-cultural factors typically affect your target customer behavior and how?
- Who are your key competitors in the market and what sets them apart?
Know your benchmarks
Identify which relevant KPIs and factors should be used to measure success, by:
- Researching industry publications for benchmarks and industry standards.
- Reviewing your competitors’ financial statements, if they are public.
- Looking at historical financial and non-financial metrics by studying your P&L and other departments’ reports
- Learning which KPIs your organization already relies on to measure its own success
To take it a step further, think about the benchmarks that your investors or board care about now, or will care about in the future.
For example, what is your current Debt-to-Equity Ratio? How is it trending? A lower ratio indicates that the company is not too reliant on debt to finance its operations, making it a less risky and more attractive acquisition target.
Another example is the churn rate for subscription-based businesses. This rate measures how frequently customers stop doing business with the company. The higher the rate, the more problems it signals.
The key is to be intentional.
These simple steps will help you better connect the dots between what is going on inside and outside your organization, so your analysis and recommendations have more weight.
2. Championing cross-functional collaborations
Most of your success as a strategic business partner relies on your relationships with people. Because after all, what’s the point of having great ideas, backed by solid data, and presented on beautiful decks, if you cannot “sell” them to the business? Doing these next 3 things will help you avoid this common pitfall and elevate your status as a trusted advisor.
Connect wider
Spend time with people you will need buy-in and support from, and encourage your teammates to do the same. The goal is for them to know you, and for you to understand their realities. Don’t focus on titles. Rather prioritize people that others usually consult before making decisions and whose names keep coming back in every meeting.
Understand deeper
As you meet with more people outside your department, act like a sponge. You should ask questions like:
- What’s keeping you up late at night when it comes to work?
- What kind of data or insight would better support you?
- If X happens, what would be the impact on your current targets?
That’s why it is best to set up regular meetings outside of budget and forecast “seasons,” as a way to encourage open and on-going communications throughout the year.
Communicate better
Communicating better is the culmination of the above, as it’s the way finance can help ensure the rest of the business delivers on targets.
Learn to speak the language of the business and break down complex finance concepts so that they understand your world as well. It will allow you to better articulate your value and get buy-in on your ideas and suggestions.
3. Optimizing your tech stack
As you work toward elevating your business acumen and understanding the challenges your business partners are facing one thing will become evident: what you need, what the business needs, and what your current systems can provide are out of sync. This means that you will likely spend a lot of time in the weeds, finding, cleaning, and reformatting data, rather than on developing your business acumen and working with other functions.
Create a Comprehensive List
To move away from this, create a comprehensive list of must-haves so you can implement the right tools, right away. This is a step that is often missed, resulting in adopting the wrong tech. It can lead to having to implement patches, find workarounds, and generate reports or dashboards that are useful to only one group versus the rest of the organization.
So, as you make your list, think about your must-haves:
- Being able to test different scenarios on the fly
- Being able generate report for this department by business day X
- Need a format that is friendly to non-finance and accounting users
- Need 123 financial and ABC non-financial data or metrics to be tracked
- Need new solution to integrate with X ERP or can pull data from Y data warehouse
- Need a provider with an extensive resource library to easily onboard different users
Don’t Do It Alone
A Strategic Business Partner is first and foremost a team player. Don’t hesitate to invite others in that process to get early buy-in on the new tech solution, especially if they will either use it directly or benefit from it later. Remember that the more you include people, the more they will include you, and the greater your influence will become. The greater your influence, the more impactful you will be in effectively driving change in your organization.
Conclusion
In conclusion, to amplify your impact as a strategic business partner in 2024, focus on three key areas: increasing your business acumen, building relationships across functions, and improving your technology stack. This approach will help you stand out as a knowledgeable and trusted advisor, who is equipped with the right technology to drive sustainable change across the organization.