How Finance Can Improve at Influencing Business Decisions

These days the pressures and challenges a business faces are constantly changing and the finance function, along with the organization as a whole, must be ready to adapt.

Finance must act as a navigator and support business leaders with information and analysis about the organization’s position and course, contribute to strategic decision-making and enterprise performance improvement.

In other words, finance must partner more with the business and help create value.

To fulfill these new responsibilities, it is important for finance professionals to acquire a new blend of skills that will enable them to partner more effectively with other business areas and exert greater influence on the company’s strategic and operational decisions.

In order to remain relevant and become better at influencing business decisions, finance should do the following:

1. Embrace a forward-looking and commercial view of the business

Influencing business decisions goes beyond tracking and reporting the numbers (traditional financial reporting).

At the core of effective decision support is developing a deeper understanding of the drivers of these numbers and making these numbers work for the business.

Unlike conventional finance teams that focus on historical numbers, effective business advisors take a forward-looking and commercial view of the business and provide strategic insights based on industry and macro-economic trends and competitor dynamics that drive better business performance.

They combine various enterprise performance management (EPM) techniques and methods to examine business performance, interpret and explain to decision makers what the numbers mean for the long-term success of the organization.

It is this understanding of what is required to be effective in the role that differentiates successful effective business partners from the less successful ones.

2. Remain close enough to the business and its operations

Finance is increasingly being called upon to provide decision support on key strategic and operational decisions.

Thanks to automation, the majority of routine accounting processes are now automated and streamlined, leaving enough capacity for finance to focus on value-add activities.

Effective business partners have extensive business acumen that extends the realms of the finance function.

For example, they have a clearer understanding of sales, marketing, R&D, supply chain, and production, which enables them to proactively and confidently support these business areas.

They have a natural interest in the business and how the different parts of the organization fit together to complete the puzzle.

They are also inquisitive with a desire to understand a broad range of commercial and macro-economic issues and the implications these have on business performance.

Effective decision support professionals also have higher levels of credibility and trust with business leaders.

They are able to engage in extensive dialogue with decision makers, challenging constructively their assumptions and decisions to ensure the business is managed in the long-term interests of all stakeholders.

It is through these engagements with business leaders that effective finance business partners have managed to build a reputation for themselves and secured senior management business partnering buy-in.

3. Develop and improve on the soft skills necessary to fulfill the role

In addition to the core finance and accounting skills, key decision influencers also possess commercial insight and strategic thinking combined with influencing, communication and leadership skills.

Commercial insight enables them to stay abreast of developments in their company, industry and the wider economy. These insights in turn help the organization to proactively seize opportunities and mitigate any new threats.

Communication skills are essential for effectively presenting financial data and the decision it supports to non-finance people.

When invited to the decision table, effective business advisors are able to listen attentively to the ongoing dialogue, interpret correctly different scenarios, influence current choices and challenge management thinking to drive better decision-making.

In today’s dynamic environment, repeatedly asking key performance questions and challenging the status quo is key to making effective and reliable strategic and operational decisions.

Not every finance professional is destined to be a strategic business advisor. Some finance people are interested in the technical matters and therefore prefer working under SSC and COE models.

However, where the strategy and structure of your organization allows collaboration and views finance as a co-pilot, it is important that business leaders conduct a skills analysis gap to determine the skills currently available and those that are needed to build the business in the future.

This will help you strike the right balance between recruiting to bring new skills and developing existing finance team members to become effective co-pilots.

4. Know who your internal customers are

Effective finance teams have clear knowledge of who their internal customers are, and they are constantly working to ensure that the needs of these customers are met.

For example, the stakeholders that other finance professionals (such as business controller, financial accountant or reporting accountant) represent are different from those served by the business analyst.

Knowing who your customer is helps you focus your efforts only on those tasks that are critical to them and capable of adding value.

It is foolhardy to have a business performance analyst spend the majority of their time, say on account reconciliations, instead of on providing objective and independent analysis of how the business is performing and advising managers on what decisions must be made to improve performance.

5. Focus on continuous improvement

Transforming finance into an effective decision support function is not a once-off project with a start and an end date.

Instead, this is a continuous process aimed at focusing resources and finance talent on activities where they can have a real impact.

It’s important to have a set of performance measures that are monitored and evaluated against goals in specific decision areas, as this will help you to monitor progress, highlight performance misses, and determine ways of improving.

Since the decision influencers are always close to the business, it’s also important to regularly seek feedback from business managers to see if they are meeting their expectations.

Becoming great at influencing key business decisions is not about the title one holds, rather, it is about continuously adding strategic and operational value to the business.