This is the second in a series of messages from Jens Madrian, former CFO of npower, one of the UK’s big six energy providers. Having led the finance team through full transformation, he tells us how the relationship with the business needs to operate if finance is to contribute maximum value.
This is the second in a series of messages from Jens Madrian, former CFO npower, one of the UK's big six energy providers. Having led the finance team through full transformation, he tells us how the relationship with the business needs to operate if finance is to contribute maximum value.
Finance transformation is not a new topic - many finance teams have needed to become leaner, less dependent on human run processes and more focused on driving performance than accounting for it. As a result, finance business partnering has become de rigeur in recent years; but finance people tend to be more structured in their thinking and more things oriented in motivations than their business colleagues, meaning they may be less entrepreneurial or engaging than the people they now align to. This is a nice way of saying that we prefer to get the process right but can forget about setting up the relationships that deliver the value.
In my experience, there are five things to get right to make business partnering work in practice.
1. Be credible: If you cannot close the books early or accurately enough for the business to know where it stands, you shouldn't expect them to listen to you on more substantive matters. A focus on getting the basics right isn't downplaying your partnering role. It's about setting yourself up for robust discussions later on.
2. Set the targets with the business: Finance can be guilty of handing down targets with little explanation, which just erodes the sense of ownership and accountability in the business for those targets. If you include unexplained stretches, you may find the business perfectly happy to explain away underperformance, or to use language like, "It wasn't my target" or "I told you it wasn't possible". Setting targets is all about the conversations later in the year, and you need the business to have no wriggle room.
3. Explain, don't just report: My finance background means that while I was running large operational teams, I understood the numbers well, but I've noticed this isn't the same for non-finance professionals. Ensuring the business knows and understands the numbers is stage one, what you really want to achieve is that the business fully appreciates why the numbers are what they are. This means you contribute meaningfully to decisions, and constantly educate your colleagues.
4. Hold the business to account on delivering operational and financial performance, ensuring you contribute to decisions that lead to that performance without assuming control. The business will not tolerate being held to account by someone who it feels is watching from the stands; they expect you to be on the pitch with them feeling their pain, rolling your sleeves up when help is needed. Then you can hold them to account on the numbers they committed to.
5. Be a leader in the business as much as in the finance team. Leadership isn't about a set of behaviours, it's about who you are. Leadership status isn't about role, or span of control, it's about the way you engage and treat people, the respect you command, and the fairness and emotional control you exhibit under pressure. Sometimes the business just needs a confidence pill or a wake-up call, but the how you deliver it will be crucial for the overall success of your business partnering approach.
Jens Madrian, former CFO of RWE npower, is an operational CFO with extensive international and transformational experience in large retail/customer centric operations.
Read more from Jens Madrian on Business Partnering later in this series.