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At a recent Pigment-hosted FP&A breakfast, the conversation turned to advice for a new Head of FP&A. With an abundance of FP&A experience in attendance, the advice around the table was invaluable for anyone stepping into a new role.
The advice boiled down into a four relatively simple steps - they are as follows:
1. Know the financial statements inside out
This one seems obvious but it really is the best place to start.
Identify where you make money. Which product lines and regions are your most profitable? Which departments are your biggest cost centers?
As you answer these questions, more will emerge. Drilling down into the key drivers of the business is a really effective way to understand it.
As you build up more of a picture, you can start to weigh what you’ve discovered against the operational goals of the organization. Where are you on track, and where are you behind?
2. Meet everyone before you change anything
The temptation is always going to be to make immediate changes - you need to resist it.
The reasons for this are twofold:
- Some processes will make no sense to you because they need changing, and some make no sense to you because you just don’t have the context yet. The only way to tell the difference is to build an understanding of the department and organization you’re working in.
- It’s good to build up trust with people before you start turning the way they work upside down.
Instead, use your first 30 days or so to get to know your team, stakeholders, and the organization at large. Obviously your team will be your first priority, but try to meet one person 1:1 from outside your department, every day - sales, marketing, customer support, etc.
You can even look to build bridges with people outside the organization: investors, customers, and suppliers can all help you build a more complete understanding of the business.
When you speak to them, ask them what the biggest issues they’re trying to solve are. Doing so will help you to understand the business from every angle, and become a more effective strategic partner much faster.
And don’t just speak to senior people!
3. Audit the finance department’s operating system
Map out the existing work that happens on a monthly and annual basis. Think about things like:
- How often are you forecasting?
- What does the budgeting process look like (if you have one)?
- What’s the monthly reporting cadence?
- What does your tech stack look like?
For each, map out some short-term and long-term improvements you could make to each. You might end up with something that looks like this:
4. Execute the high-visibility quick wins
While you don’t want to change everything immediately, it is also good to make some meaningful, tangible improvements fairly early on.
Maybe there’s an annoying, manual process you could automate. Maybe you do a review of all your vendors and cull some unnecessary spend or negotiate discounts.
Your 1:1s and process audit will produce a thousand different problems, and some of them will take minimal effort to solve. Choose a few that will have a tangible, immediate impact.
You’ve got this
Really, the early days of a new role are about balance: listening more than talking and learning more than changing.
Use the time to build short-term and long-term strategies that’ll make tangible changes to the org. Over time, those short-term wins will give you the social capital you need to secure the bigger long-term ones.
Good luck!
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