Collaboration - An Essential Skill for an FP&A Professional

Finance planning and analysis ( FP&A) professionals of a company are in a unique position .  FP& A professionals are exposed to a holistic picture of the company's performance. They bring together the information from different groups and put it together to understand the trends and the metrics.

This unique point of view sets these FP&A professionals up very well to be the collaborators within the company.  It is an FP&A professionals deep knowledge about the company and the variables that impact the performance, that makes these professionals the translator of needs between various teams.  The three groups that FP&A needs to collaborate closely with to continuously drive business value and become the analytics champions of the company are  business partners, data scientists and compliance/ regulatory specialists.

Business Partners: Finance has already been collaborating very closely with business partners to drive business performance.   So much has been written recently about the importance of being embedded in the business and  understand how business runs . Business partnering provides FP&A to ability to drive valuable decision making. This will continue to grow in importance as big data becomes embedded in the way we do business.

FP&A - Collaborator of the Future

Data Scientists: With data becoming an essential tool to drive business performance , data scientists are playing a very essential role in harnessing the value from that data. FP&A professionals have the knowledge and expertise not in data and analysis but also in business. This makes them the natural translators to explain business needs to the data scientists. Similarly, they will be able to work with data scientists to translate story that the numbers are telling back to the business in the language that is familiar to the business.

Compliance/ Regulatory Experts: Compliance and regulations needs are changing dynamically  and can have far reaching impacts. These impacts are complicated  and difficult to translate to ordinary business language. FP&A professionals have a very strong background of compliance and regulatory needs. They also work very closely with other teams within finance on a regular basis to understand the impact of changes in the regulatory / compliance environment. The business looks to finance to guide them in this area. FP&A  professionals with their knowledge of business as well as analytics will become the go-to collaborators to understand the impacts of regulatory changes and guide the business accordingly.

To be a valuable FP&A professional, one needs to be an expert in the area of financial analysis and at the same time collaborate across  the functions of business, data science and compliance. The skill of collaboration will continue to grow in importance as technology will drive the digital transformations across companies. 

My Journey of Loving Finance & Analytics

Wish you all a very Happy New Year  - hope you all had a great break  and are back refreshed to achieve you goals in the year 2018.

This break I took a 4 day backpacking trip to Joshua Tree National Park  in Southern California. I have always enjoyed hiking  and camping and this trip  was a great refresher back to nature.   While hiking on the trails of the desert I got to thinking of why I love hiking and also why I love working in finance and with numbers.

The one thing I love about being out in nature and hiking is that it  requires  not only a physical fitness level but also  a level of mental concentration. At times when I was descending down a steep hill, all I thought about was how and where do I make the next step so that I don't slip. I had to look for  rocks,  type of soil , the position of my feet and also the load I was carrying on my back and take each step carefully. It required all of my concentration. But I had  to also look up and see where I was going  and understand the bigger picture. I stopped a few times to just admire the view, take a break, refuel  and  plan the next 2-3 hours.   I am  happiest when I am working on problems with data and analytics  and concentrating  to understand the story the numbers are telling me . All of my energy is concentrated on understanding the analytics and modeling.  But I have to step back sometimes and know  the goals  of the analysis ,  understand the bigger picture and plan the next few steps. This   helps me make sure I am on the right path  and all of my energy is not wasted in going  to someplace I did not want to be .

Another very important aspect that makes hiking  and camping very enjoyable is to make sure you have the right equipment.  To make sure your body supports you in the experience you should have the right backpack so that the shoulders don't hurt and you are able to carry everything you need, the right shoes so that your feet are protected and don't form blisters and the right sleeping bag  and tent so you remain safe, dry and warm.  If we don't have the right equipment, a 4 mile hike  that should take about 2 hrs could take 4 hours with injuries  or harm to your body along the way.   In the same way, analysis is dependent on the data quality as well as the systems one uses. One can continue to rely on old technology   but the same analysis that should take minutes can take hours or days with errors in it. To make the journey of transitioning into big data  and analytics ,  the tools used  should also be upgraded  to make the journey more sustainable and impactful.

Lastly,  for me hiking and camping brings a lot of joy if I  do this activity with  people  who make  the whole experience enjoyable and fun. In these group of people you might find people who have a passion for outdoors or nature, know a lot about geology or ecology of the area or people who have never done it before . In all cases either you learn something  or you have an opportunity to teach something.  As long as the people  that you are hiking or camping with have a passion to learn, try new things,  enjoy the twists and turns  of walking along a trail ,  even the smallest or easiest of the hikes becomes a fun experience.  In the same way, it is the people around me that makes my work fun. Some of the people love analytic, some are experts in accounting  and regulations while others are great business partners who are experts in their own areas. Collaborating with all these people help me perform my best, gain new insights and become a valuable business partners.

In this journey of walking along whatever path you enjoy, don't forget to stop and enjoy the view, take breaks to refuel and have fun. 

Using Numbers to Tell a Story

A Financial Planning and Analytics (FP&A) professional is essentially a storyteller. The FP&A analysts dig through numbers, analyze trends, understand driver and try to answer the question " So what". What are the insights that can help leadership take the right decisions? 

Let’s consider the analogy of making a stock. To make a stock, one must first identify what will the stock be used for - soups, stews, sauces etc. Do you need a vegetable stock, chicken stock or a beef stock?  Once the use and type is identified, then the stock is made by boiling down the right mixture of bones, meat, vegetables, mirepoix and spices, skimming the foam regularly and then filtering the prepared stock to be used in various stews and soups. The clear stock is then used for various purposes while the rest of meat, bones vegetables etc. are discarded. 

In the same way, to do a good analysis we must start by identifying the goal of the analysis. Identifying the question, we are trying to answer will help an analyst understand the story   that the numbers might tell. Once the goals are identified, then we need the right data, assumptions and tools to conduct the analysis, continuously refine the analysis and then present the output in a clear and simple manner.

Analysts tend to present all the work that was done but its imperative to filter down the analysis to the top 2-3 insights so decisions can be taken accordingly. The insights can also change based on the audience that the analysis is being presented to.  One of the most important skills that an FP&A analyst needs today along with strong analytical abilities is the ability to communicate that analysis. This is a skill most of us learn on the job.   Here are a few ways, analysts can be trained on the art of story telling through numbers: 

1) Case studies such as HBS case studies do a good job in training analysts to look through myriad of information and pull out the most important facts. 

2)  Provide a problem with bunch of data related to simple question. The challenge given is to answer that question within 2 slides but the analysts will need to dig through the data and find the top 2-3 insights from that data that can help answer the questions. 

3)  Provide the analyst with the same set of numbers and some background regarding the company but difference sets of audiences (for example   Finance director, marketing & sales director, IT lead etc.). The task of the analyst is to figure out what is the question that each set of audience will be most interested in and then use the numbers to provide 2 -3 insights regarding each of those questions.

Numbers tell a story and the role of an FP&A analyst to understand and communicate that story in a simplistic manner. It is important to help analysts develop and hone their skills of how to make a clear stock of the ingredients they are given. 

What is diversity? - View from Majority and Minority

What is diversity ? The dictionary definition of diversity is " variety ; multiformity".  I actually never thought too much about diversity  till I became a minority in a different country. As a majority  in the country of my birth ( India)  I was among people who looked liked me, talked like me, dressed like me , ate like me  etc. We  still had diversity among us - diversity of languages, diversity of religions, diversity of thought  etc.  But still I  was part of a majority in Delhi - a hindu woman with her mother tongue as hindi. I did not stand out as anyone different and did not have to explain my culture to anyone.

But then in my twenties I moved to USA to study. I moved from Delhi - a city of nearly 20 million people to Pullman , a city in eastern part of the state of Washington  with a population of 33k people. That was quite a change  and here I was different. I was not in majority anymore  . I was among the minority and  not even a significant minority . I would always keep a look out for people who looked the same and that became  the starting point of friendships. I became more conscious of who I am and what is my culture. I took more time to understand my background and how do I fit in this country.

This perspective of being a majority and then a minority in another country has helped me appreciate diversity and give me a viewpoint that I wanted to share with you.

We hear so much about diversity but what does diversity actually mean ? Does diversity mean that

the majority adjusts to the needs to the minorities  by stopping the things that matter to their culture . I find the whole concept of not wishing Merry Christmas ridiculous. If in India someone had told me that I cannot say Happy Diwali  I would rightly be frustrated.  One can celebrate the festivals without offending the sensitivities of others. If some minorities get offended by  the majority wishing Merry Christmas then they need to think of  their own expectations. Even if you don't celebrate Christmas - you can wish someone else Merry Christmas back.  I had an interesting conversation with someone recently at workplace who told me that years ago their was a competition among the employees for best decorated cubicle or office  during Halloween but no one does it anymore. When I probed into the reason " why?" - she said we became more diverse and thought other people might not like it .  I found this sad and disturbing. Being diverse does not mean that you stop enjoying your own culture , Being diverse  for me means being more inclusive i.e. celebrating other cultures too along with your own. For me this would mean that   during Diwali I can wear my traditional dress for the day and wish happy Diwali  or have a good Indian lunch in the cafeteria along with participating in the Halloween competition and wishing Merry Christmas and  celebrating the spirit of peace and kindness during the holidays. For me diversity is  being invited to someone's place for an Easter brunch while inviting my friends and colleagues over  for a Holi party.  Diversity means inclusion not quiet exclusion.

Just like minorities in US need to understand the rightful indignation of the majority , the majority need to start including minorities in their celebrations. In my nearly 20 years in this country - I have been invited only once for thanksgiving  and once for Christmas dinner to someone's place. There are many minorities who have never cooked the traditional thanksgiving dinner or even know what is made on Christmas. Diversity meets inclusion - include us to be part of  your celebrations and come be a part of ours as a participant, Lets cook thanksgiving dinner together, light the diyas for Diwali, make gingerbread houses during Christmas, hunt eggs in Easter, learn the meaning of Hanukkah , enjoy the colors of Holi and taste the food  made during Eid together. Lets change the meaning of diversity  by enjoying all cultures and traditions. Lets share our plates since food is the way to the heart.

New Technology in the world of Legacy Systems

I attended the Association of Financial Professionals ( AFP) conference in San Diego on October 14th - 17th. It was my first time at the AFP conference and it was a wonderful experience to hear the latest developments in finance and treasury. It was great to network with people who have similar issues in their companies and hear how they are approaching to solve the problem, integrating new technology  and preparing for the changes in future.

There was so much new technology that was showcased during the conference. AFP mindshift was a new row of exhibitors as well as speakers that particularly showcased how these technologies are being commercialized and used.  Some of the ones that stood out particularly are blockchain, robotic process automation, artificial intelligence, predictive modeling, big data and analytics.  New startups definitely have an edge up in adopting such technologies as they are not tied down by legacy systems. But one of the main issues holding back companies in investing in such technologies are existing legacy systems.  Companies have invested millions of dollars in existing ERP systems  that are the back bone of their businesses and  with changes happening so quickly around us it becomes difficult to  develop a clear technology strategy for the financial function.

Finance needs to start adapting to technology and partnering with IT on the future technology strategy of the company. No company today can work in isolation from these changes and all its functions -  finance, HR, sales & marketing , manufacturing etc are being impacted by these technologies.   Finance function is being looked on more and more to answer not only the question of what happened   but what should we expect going forward and why - it becomes imperative for the the future finance leader to understand the language of technology and work hand in hand with  information technology experts to shape the technology strategy  of the company for the future. The technology strategy should line with the goals of the business, deliver value and be a united  outlook for the company  with the ability to be agile ( change the course as needed).

Big data for example is not just the domain of finance - but also for marketing, supply chain, R&D etc.  Thus  a company's strategy for data assets should not be based on the needs of one department but the holistic needs of the company itself so we get one version of truth from  the data asset.

Companies need to develop a 3 -5 year information technology strategy  and finance has important part to play in this strategy development to help understand the value in technology investment.

How is your company / organization adapting to the new technology  and planning for a technology strategy ?

5 Leadership Lessons learnt by Coaching Junior Lego League

Legos, Legos everywhere …. That’s what my coaching looks like.  I have been coaching Junior Lego League team for the last 3 years. I started this team when my elder daughter was in kindergarten and now she is in 3rd grade and the team is still running strong. I am starting another team this year with the kindergartners – this time with my younger daughter.   

Leading a team of kids through a season of a Lego league where they learn about a topic, plan and build a model, program parts, learn to work as team, share, argue, put their learnings on a poster board and then finally present and share their findings, has been full of so many leadership lessons for me as a coach. I work full-time in a leadership role and I can see how training a few junior school students provides leadership lessons for all adults

Here are the 5 most important lessons I have learnt from coaching kids for the Lego league:

Model in Kindergarten 

1.       Team ownership and pride: Kids in elementary school play together all the time but they don’t call it teamwork (or rather team play really).  Kids compete with each other to gain praise which is exactly what adults do too but not in such an open way.  I had to constantly work with the kids to help them understand that they are not really competing with each other when working in a team. They should be proud of what they all create and they don’t need to point out what each of them made in the model. It is a “TEAM” effort.  They may not agree with how things were done or all parts of the model but still it is their model which they present to others.  Leaders in real world need to help teams work together and celebrate the successes as a whole – the whole team should own the whole output not just parts of it.

2.       Listen to the ideas: Kids have to be taught how to “listen”. But so does any team – are the members actually listening to each other or predisposed to dismissing an idea in their heads with a “but” or a “no”? While coaching the Lego team, we established rules regarding listening to ideas by letting the kids express their ideas in their engineering journals first, and then present it while other team members listened.  By enforcing this simple rule, we came up with a combinatorial set of ideas for our team logo, model variants to build and test and, final presentation strategies. This helped team members who were not that confident about their ideas be included in the discussion. As a leader in the workplace, I learnt the importance of just listening (and trying not to have misconceptions prior to listening) and taking the time for in-depth discussions and brainstorming which allow everyone to express their ideas in different ways.

Model in 1st Grade

3.       Let them disagree …. But teach them on how to agree: One kid wanted to put a star wars figure in the middle of a wildflower garden model created by the team to show the relationship between bees and hummingbirds – that was a big disagreement in the team.  The kids argued and disagreed about it for quite some time with emotions running high.  As a coach, I let it happen for some time as I wanted to see how they would solve this problem. But with emotions running high and kids being kids, everyone was ready to have a melt down – I had to step in. This is where I worked with them to come to an agreement. Could we have another Lego figurine in the model or a little shed where the Star Wars figure could be put   with a storyline around it.  The kids came to an agreement which seemed to satisfy everyone and the model still worked (phew!!).  We have disagreements in work teams all the time. Some disagreement is healthy – it helps us make our results better. But at some point, the leader should guide the team to an agreement –  to make the output of the team better. We cannot keep the conflict under wraps because it would still keep coming up but rather steer the team to solve the conflict.

4.       Observe and understand the strengths of each kid: Every kid is special and brings a quality to the team. Some kids were good in planning the model and the whole picture, some kids were good in programming, some kids were good in art and making the poster. It takes times to understand what each kid is good at, let them develop the talent and give them a chance to work on things they are not so confident about. The goal of the Lego leagues is to help in holistic nurturing of talent. It was important for me as a coach to let the kids work in their comfort areas and challenge them when they seemed ready for it.  As a leader in an organization, each member of the team brings different expertise – it is important to recognize that talent and nurture it but also give them a challenge in other areas within their comfort zone. Successful leaders nurture the diverse talents in their teams.

Model in 2nd Grade  at World Robotics Festival 

5.       Explain to a “kid with curiosity”: As a coach to kids I had to answer a lot (believe me – a lot !!) of questions over the years and it forced me to explain complicated concepts in simple ways – use tools such as drawing, videos and books. My audience were kids and I wanted these kids to ask me a lot of questions.  I took the time to understand my material and then explain it in 3-4 main ideas. The discussion used to change midway if one of the kids asked an interesting question but I had to make the connection back to the 3-4 main points. As a leader, we have to communicate to our teams and to other business groups.  Using simple storylines, graphics and just fewer words helps to simplify communications. We need to keep our storyline within 3-4 main concepts, encourage the questions but make sure that the audience remembers the simplified message. Think of your audience as a “kid with curiosity” – and start with a very simple storyline to communicate.

Sports is full of stories of great coaches. Great coaches are also great leaders. Coaching kids is a two-way street – on one hand, you as a coach can impart your knowledge to the kids and see them learn and blossom but on the other hand, you can learn a lot from the kids and become a better leader and coach.

Bringing the Change in Finance

This is the 5th blog post in my series  about "Challenges for FP&A in the world of Big Data" Here are the links to previous posts:
1. ERP systems Adapting to Big Data
2. Process Change in Budgeting & Forecasting
3. Data Scientist as a job function within FP&A
4. Finance as the Gatekeeper in the era of Big Data

Now lets talk about Change Management.

Let me start by saying that I am not a change management expert . But I have lived through a number of changes and transformation within different companies.
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Heraclitus correctly said " The only thing that is constant is change"

Organizations are always going through change - some brought about due to changes in the market, some brought about due to change in the direction of the company, change in leadership - whatever it may be. We seem to be a period of constant change. I strongly believe that in order to survive in today's world  one has to be "very" comfortable with change. Look at the pace that new technologies are being adopted everywhere  - in all facets of our lives.  Yes some people have to be pushed towards it a little bit more than others - but people who are not ready for change have a tough time surviving in this economy.  

So when we talk about " change management" - I think it is more about really defining the scope of a particular change and managing the planning and execution of it.  One of the strong beliefs that runs in the companies today is that since " we have been doing things a certain way " we have to hire consultants in order  to bring about a  real change. So in comes an army of consultants  who runs the analysis and tells the company - this  is how you have to do the change.  I don't think this is necessarily wrong but  do we need to discount the talent that exists within the company.

We are all trying to do "more with less". With big data the challenge of change becomes even more difficult . As mentioned by the Harvard Business Article "Big Data : The Management Revolution"  the three key differences in this big data revolution vs increased analytics is  volume, velocity and variety  of the data we are getting.  So the change management within this becomes even more important - since the outside markets are changing at a very fast pace.

I believe that there a few fundamental principles that need to be followed within such a pace of change management:

Project Team 

1. Executive Sponsor: Every  major change project needs a champion or a leader. 
2. Find the experts within your function  and  dedicate them 100% to this project ( this should not be a " development" or "stretch" opportunity for someone) - This internal team of experts should do the initial analysis of processes that need a change, define scope of change , budgets and timelines. This team of experts should be given the access to extract data from various sources and  be given the highest priority during the time of planning.  This team should also be responsible for execution and delivery. 
3. Hire a consultant - But remember the consultant works for you. The consultants can bring in the knowledge of industry and provide advice but the deep dive analysis , opportunity mapping, scope definition  etc should be performed by internal experts / employees
4. Have a dedicated project manager (s) 
5. Communicate  regularly
6. Plan  how to measure the impact and then measure it - Understand the KPIs that should be measured as well as how these will be calculated should be agreed upon before the projects / changes begin.
7. Be Agile: As  teams start executing the projects / changes, more unknown items are discovered which might require course correction or change of goals - be agile and open to change within a project

So lets get ready for the change  with "Big Data" revolution.