Finance business partnering – purpose and implementation

What is business partnering and why is it becoming increasingly important for finance professionals to engage with the topic? Learn from finance expert Anders Liu-Lindberg how you can use insights from the finance department to strengthen collaboration in your company.

How do you see the role of Finance in the company?

Is it compliance and control-oriented ensuring that the house is in order or business advisors that drive value creation and help unleash the potential of the company’s strategy?

I’m sure most consider the former a key role but many still have a hard time seeing Finance perform the latter. Not least if you don’t work in the finance function. However, this is where the true power of Finance is hidden. This is Finance Business Partnering. It’s a simple idea that finance professionals collaborate with business leaders from Sales, Marketing, Operations, etc. to help them meet or beat their goals.

What is business partnering?

You have likely heard lots of descriptions of what business partnering is but it’s quite straightforward.

Insights x Influence = Impact

Insights is when you have information based on accurate data that business leaders do not know yet but can help them make better decisions. Influence is when you build trusted relationships, speak in a language that business leaders understand, and communicate your recommendations in a clear and concise manner. Impact is when you increase value creation through better decisions and stronger execution.

Key takeaways:

• Business partnering is an activity where you use insights to influence business decisions and create more shareholder value.
• Successful business partnering happens when your company is meeting or beating its targets, your business stakeholders recognize your support, and you can articulate how you contributed to business success.
• Finance business partners don’t always need to have all the ideas and solutions but can be strong facilitators and follow up if actions lead to the desired results.

What does successful business partnering look like?

We can all relate to the “Impact Equation” but how do we translate it into tangible success metrics that we can measure ourselves on? Since business partnering is a collaborative activity that happens together with other people how do we single out our own contribution?

Exactly because it’s a collaborative activity it’s really not the highest priority to mark your own contribution. Instead, your success is defined by the success of others. Is your company successful? Are the business leaders that you support more directly meeting or beating their goals? Do they recognize you for playing a part in their success? And can you articulate what your role was in achieving that success?

We can synthesize the essence of these questions into three simple goals of business partnering.

1. Business success/strong business performance (meeting or beating its goals)
2. Customer satisfaction e.g., Net Promoter Score
3. A value log where you articulate exactly the role that you played

Let’s break that down further. Finance as a function is not a success by itself. The company wasn’t created because of Finance. Finance was created because of the company. Hence, part of Finance’s success measures (beyond compliance and control) must be that the company is successful overall. That’s why “business success” is the top success criteria for finance business partners.

It could be though that business leaders are successful without the help of Finance. In fact, Finance could be completely siloed away and the company still doing well. That’s why it’s important to measure business leaders’ satisfaction level with Finance. You could conduct a quarterly or semi-annual survey to determine this. Always be sure to include, “How likely are you to recommend Finance/your finance business partner to another business leader?”. The answer will help you determine the current satisfaction level.

Finally, it’s likely that some business leaders are doing really well on their own and are happy with getting the reporting in time from Finance. Hence, on the first two measures you’re scoring high. Yet, when it comes to articulating how you are supporting the business leaders all you can say is you sent the report. That’s not business partnering!

What is finance business partnering then?

Instead of only telling you what finance business partnering is not let me give you an example. Years ago, I was working as a finance manager for a drilling company in the United States. We had recently signed two new contracts for some new-build drilling rigs in the Gulf of Mexico. These rigs had been allocated a start-up budget of $20 M each.

However, due to bad financial performance in the prior year, the company needed to tighten up its budget. Hence, the operations managers for the drilling rigs had been told to cut 10% of their budget. We didn’t really have any ideas of what to do and the deadline to act was approaching fast. What could be done?

One day, we were sitting in my office reviewing the financials when one of them asked openly, “So what about that savings target? Should we have a workshop to figure it out?”. I jumped on the idea immediately and turned around to my screen to get the workshop booked for two weeks later. In the days leading up to the workshop I took charge of preparing how to run it and setting the scene.

On the day, I spent the first 30 minutes setting the scene and then split the participants into two groups. Finance was also represented in each group. They had 45 minutes to do some brainstorming and get ideas on the table. We spend the last 30 minutes consolidating ideas and testing which could work. The result? We found viable ideas that could save the necessary 10% and $4M.

What was our role as finance business partners in all of this?

Facilitation, getting people to collaborate, calculate the business case and follow up on execution just to name a few. Would all this had happened if Finance wasn’t there? Maybe, but now we were there and an integral part of making it happen.

This is what finance business partnering is and we’ll break it further down to showcase how it works and how it creates value for the whole company in this follow-up blog post.