Agility and the Finance / FP&A function

Posted by  Amrish Shah

What is this article about?

Agile has become an important initiative for many organisations as they struggle to cope with the ever-accelerating pace of change in the external environment whilst also being at threat of being disrupted by new entrants unencumbered by legacy organization and technology issues. This article aims to explore whether “agile” is relevant for the finance function.

Why is it important?

Finance has traditionally been seen as a cost centre that is preoccupied primarily with its stewardship and compliance obligations. At the same time the request from business to finance has been evolving and the demand is increasingly on the function to go further up the added value curve to provide financial management service elements that can better help the organization realise its strategic objectives.

Budgets however remain under pressure, so the challenge is for the function to not only become more effective (contribute to better business outcomes) whilst becoming more efficient and therefore reach a step change in productivity. Last but not least, to achieve this by becoming a more engaging function which can (continue to) attract talent – talent whose needs and relationship to work and workplaces is itself changing.

All this puts pressure on the finance function to fundamentally address HOW it operates. Therefore, it is worth asking whether Agile – in essence a fundamentally different approach to organizing – can play a relevant role in this transformation.

What are the key considerations?

As mentioned before, Agile is in essence a very different approach on how to get things done, which many feel is more appropriate from the traditional command and control, sequential management approaches that characterized an environment of stability and inertia. An environment which does not exist anymore.

Some of the key elements that characterize agile-ness and an organization that is more agile are:

  • Strategic alignment and commitment
  • Empowered Teams
  • Faster cycles, feedback loops and learning
  • Flexible and dynamic people allocation that sustains motivation and commitment
  • Technologically fit for purpose and leader

From a finance function perspective let us look at which ones could be relevant and why.

Strategic alignment and commitment

Although not entirely new, everyone benefits from being part of a clear purpose and a vision that is shared across the organization. As a support function, it is very easy to imagine people in finance roles who come in to “do the job” without a deeper understanding of what the role means to the big organization picture. I believe this is relevant for finance and especially for the more business facing and expertise type roles such as Treasury, Tax, M&A.

Empowered Teams

Structurally, finance has done a decent job of “mapping” to the business. In creating separation between sub-functions such as Accounting and Reporting, FP&A, Business Finance, Tax, Treasury, Investor Relations, Internal Control etc. The real question is whether a more flexible approach to creating a pool of expertise within business finance can help map onto a more agile business better. So that such expertise can be easier deployed to where it is needed rather than being “stuck” to a particular unit. What is as relevant is the role of leadership to provide greater role clarity, to provide stability in the form of communities of practice to offset the relative destabilization that can come with a more flexible deployment model.

Faster cycles, feedback and learning

At heart here are ideas of performance orientation, standardized ways of working, experimentation, transparency of information and ongoing learning. Given that finance and FP&A in particular tends to have process leadership of the performance management cycle, the need to approach these in a more suitably agile manner in keeping with the changes in the business environment is only to be expected and thus relevant.

Dynamic people allocation

This is about what Agile implies in terms of leadership style. A move to flexible resource allocation implies delegation and trust. Which means that the old styles of command and control and micromanagement will not cut it. Rather Leadership should reflect servant leadership. Meaning having the requisite skills to steer the functional resources in a very different way and, importantly, to act as super coaches and set the environment where entrepreneurship, risk taking, experimentation can flourish and where a growth mindset rather than a fixed mindset is encouraged when it comes to career development.

Fit for purpose Technology

This probably goes without saying but with information remaining the core product of the function, the ability to work with the Business and IT to design the right systems architecture and to deploy specific tools for specific purposes in a very different way to traditional IT projects becomes highly relevant.

Are there any challenges?

For me the biggest challenges will remain two-fold. The change in leadership style required to support a more agile finance function and addressing the legacy systems infrastructure.

A final word

I hope in this article to have illustrated that whilst Agile is seen mainly in the context of software and product / services development, it can have clear relevance to how the finance function can provide a better business service in a more flexible and, potentially, more cost efficient manner.

Amrish Shah

Amrish Shah, of Indian origin, born in Africa, a British national and now residing in The Netherlands, is a seasoned and senior finance leader with over 20 years of financial management experience in international organizations. Some of the companies he has worked for include Unilever, O'Neill Group, Staples, Royal Wessanen, Kao and he is currently working in a senior FP&A transformation capacity at EndemolShine.

A qualified Management Accountant with CIMA, he has held regional finance leadership positions since 2001, based out of The Netherlands. He has held both staff and line roles, managing teams of up to 40 people. He has a clear belief in the value of finance at both strategic and operational levels to the organisation and is passionate about, amongst others, organisation decision making, organisation culture, high performing teams, leadership in general, organisation and finance transformation, change management and talent management.