4 min read

Evolve the culture of planning

Danielle Dahlstrom

Director of Product Marketing, Finance Solutions

Finance should no longer be the sole owner of financial planning and outcomes. To deliver on targets, stakeholders from across the business must play a meaningful and active role in planning.

The status quo in financial planning meant that finance fully owned the process with input from operations in response to requests for data. Other departments performed their own analyses to arrive at that input, but planning was still finance-owned and operated. Today, the transformational finance leader encourages other departments to be active participants in a more holistic planning process that aligns the entire business around strategic targets and goals. 

Leave the past in the past 

Outdated planning structures rely on finance spearheading and facilitating the entire planning process, from process flow to template creation and distribution, to assignment of targets and performance to targets. Other organizational stakeholders have limited visibility into planning outside of their own realms, which they provide to finance teams to aggregate, validate, and finalize. But it isn’t a collaborative process. In fact, there is little to no collaboration on line items and how they align to execution of broader strategic goals. This siloing creates an environment in which individuals outside of finance feel unheard or unfairly pressured to adhere to unrealistic budgets and targets, and feel little to no ownership of the ultimate results.  

This method is untenable in the current disruptive climate, creating organizational tension and information silos. Stakeholders find themselves sitting on the sidelines of an important process, which they could – and should –contribute to and influence.  

New systems and technologies automated collecting data, and finance procured and “owned” these systems to streamline reporting and output. Expectations were that those systems would answer all questions from leaders and meet the requirements of the business. The technology did not keep pace with the demands and finance has been trying to meet new challenges with old solutions. 

Change is happening 

The world moves too quickly and is too uncertain to expect one department to chart a course for the entire business, especially in a large and complex organization. CFOs must increasingly develop partnerships in all corners of the business in addition to developing tangential roles within their reporting structure.

Today, more procurement, IT, and digital roles report into a CFO than before. Considering how close to the source of information and the processes these departments can be, those roles are natural fits to roll up into finance. Similarly, it’s important for CFOs to understand the entire value chain more deeply than ever before. When presenting to leadership, finance is frequently asked detailed questions about the demand plan, the workforce plan, the sales forecast, and so on, and how these plans align to the strategic targets, address gaps, and then they must still fulfill their piece of the value chain so others can stay on track. When asked, it’s the role of finance leaders to understand and defend those plans – simple high-level comprehension just won’t cut it. 

For example, consider connecting finance to procurement, a cost-center function. By rolling procurement leaders into the financial planning process, they can provide detailed cost analyses with granularity, like the ability to pinpoint savings for using alternative suppliers or costs for manufacturing at different locations. This kind of synergy is why planning is increasingly recognized as a multi-functional activity. 

Accelerate change 

There is an opportunity for CFOs to transform and evolve planning culture to be a multi-discipline exercise. By bringing other stakeholders into the process, CFOs can gain otherwise inaccessible contextual information from budgets when collaborating directly with stakeholders. They will also unlock full visibility for all parties, providing more trust and ownership in the planning process. This, in turn, creates more engaged teams with more opportunities to directly impact the financial plan.  

Motivationally, there is shared ownership fostering a culture of winning together. The entire business is aligned around corporate strategy and targets/goals. Also, closer cross-functional collaboration means more reliable and accurate forecasts, which means improved execution and achievement – the overall goal of any organization. 

Conclusion  

It’s no longer a controversial opinion: Planning is everyone’s job. At its core, planning is outlining the details of how to reach a goal. With the right stakeholders engaged in the process at the right points in time and understanding of the ultimate goal, the entire organization has a higher probability of achieving those targets. Finance should no longer keep information in a silo where other stakeholders simply feed info into it, but instead, make planning a collaborative effort where decision-makers across the business can plan with granularity, context, and realistic goals and KPIs.  

 

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