Innovation seems to be the buzzword du jour these days.
It can take on an infinite number of meanings, with many fixated on leveraging new technologies or disrupting an entire industry. While extremely broad, both of these can certainly be innovation. But in the world of Financial Planning and Analysis (FP&A), is it critical to go to such lengths to innovate?
No! Focus on adding value by devising new solutions to existing problems. That’s innovation.
In order to achieve this, the top FP&A teams—who have traditionally been considered the eyes and ears of an organization—are leveraging data more than ever to better position themselves to bring the strategic thinking to the table and putting their powerful minds to work.
The proliferation of new technologies and more consumable data visualization solutions is there, but it’s up to your team to turn the data into action—enabling the FP&A team to cross-train in skillsets that are more widely available via training, and leverage their foundational financial knowledge to take on more of the role as the brains in an organization, and not only eyes and/or ears.
Best of all, an advanced statistics degree from MIT is no longer a prerequisite—it starts with two things: differentiation and proactive adaptation.
Differentiation
You don’t have to reinvent the wheel, but you might need to roll in a new direction.
When it comes to innovation, the greatest value-adds are often born from discovering a new way to do something mundane or commonplace—it’s about separating from the pack.
In “The Excellence Dividend”, Tom Peters tells a story about Metro Bank in England—a young bank with a strong brick-and-mortar footprint and a penchant for thinking outside the box. As the “FinTech” industry is disrupted by online-exclusive banks with no physical location, and many financial institutions are closing branches and offering lower fees to incent potential customers, Metro Bank is proving that many of their competitors are barking up the wrong tree.
Rather than mimic what everyone else is doing, the UK-based bank is extending their hours to stay open later, and stocking their stores with dog treats for their customers’ furry friends. It’s been a huge success and they are growing like crazy.
Much like Metro Bank, the top organizations will find themselves with an FP&A team just as scrappy and creative to figure out how to differentiate themselves. It doesn’t have to be with dog treats, but it absolutely involves putting themselves in their customers’ shoes and thinking about what would make their lives easier.
For example, if you are on the FP&A team at large hospitality organization, consider linking up guest reservation history with their check-in or cancelation times to more accurately forecast your upcoming occupancy—this will help ensure you’re adequately staffed and stocked—from the kitchen to the front desk—ultimately creating a better environment overall for each guest:
- Quicker room service
- Better stocked bar
- Expedited check-in/check-out procedures
- Open chairs at the pool
- More widely available tee times
As an FP&A department, think of organizational “insights” as your dog treats. This means having the capabilities and skillsets necessary to identify, dissect, analyze many disparate information sources and translating it into actionable insight. At the end of the day, data is the key element that makes up insights—empowering your team with the capabilities to seek out different data sets to form new insights is key to the long term success of any organization. An interesting example that I came across recently was at a presentation on Business Intelligence in the city of Las Vegas. The city recently moved to a self-serve business intelligence model, enabling anyone throughout the organization to have access to various different data sets. By doing this, they were able to find insights in unlikely areas—for example, a gentleman who was hired to play cards at the Senior Citizen centers was able to leverage the information to best determine which senior citizen center to show up at to entertain.
Finally, enabling your team with the capabilities to investigate and discover new trends and patterns will help your people to spend more time using their brains, and less time getting mired in the weeds.
By making this a core concentration and strategic focus of your department, it will not only help FP&A’s differentiation and identification as a strategic partner to the rest of the business, but also helps to differentiate itself amongst your current team and future prospects by giving them outlets to create and lead.
Proactive Adaptation
Closely related to differentiation is proactively adapting to future needs—this is a necessity to survival. As an organization, you need to continue to adapt and separate yourself from the competition because without these changes you risk becoming a commodity competing on price if you are selling products or services. If you are an internal department such as FP&A, the impact of not adapting is much higher than the risk of remaining status quo—you risk falling behind, missing out on attracting/retaining good talent and not positioning yourself as the strategic leader in the organization.
From an adaptation standpoint in FP&A, consider looking ahead to the “skillset of the future” and curating or developing skillsets to meet those future needs. Here are two things you can do:
- Data Analytics Training
Start looking for training programs to strengthen your team’s analytical skills, such as Power BI, or even enterprise systems and database exposure. Bolstering your team’s ability to identify the capabilities of data visualization solutions, and how to leverage them for forward thinking decisions will be critical to driving new insights throughout the organization. - Take on Larger Roles with Enterprise System Implementations
During many enterprise solution implementations, departments such as FP&A lack the technical chops to ensure the new solution will meet their needs. Building these skillsets up will enable your team to take the driver seat during any sort of enterprise system implementation, which will result in better forecasting and analytic capabilities for the organization.
Effective progress in both of these areas will result in better and faster decision making, but it will also afford your FP&A team the opportunity to put their expertise to good use in areas they’ve routinely stayed on the sidelines for. Investing in their growth and experience on the front-end will only strengthen the output of their planning and analysis on the back-end.
Innovation from the Inside Out
With more data at their fingertips than ever before, the FP&A team is uniquely positioned to lead the innovation charge and ensure the organization is not only keeping pace, but strengthening its competitive edge (or making up for lost ground).
Technology is oftentimes the shiny new toy, but it can also be the biggest distraction to true organizational innovation. In the quest to become more of the brains of the organization, it’s critical to place a premium on helping your people sharpen their skills, get comfortable being uncomfortable, and spend more time differentiating and adapting.
[sch_pullbox]If you’d like to speak with us about how we’re helping the FP&A teams for Fortune 500 organizations transform their thinking to become data-driven innovation incubators, please reach out to us today.[/sch_pullbox]
