Beyond FP&A: Exit opportunities, business partnering, and cross-functional working

This panel discussion between Premal Parekh (Former CFO/Finance Director at London Stock Exchange Group), Magdalena Sailer (Former Finance Director, VICE Media), and Chris Ortega (CEO, Fresh FP&A) took place at the FP&A Summit in June 2023.

Premal Parekh

This session is focused on what you can do beyond FP&A, whether that's been your role or the value that you can add to a company. We’ll also be talking about exit opportunities, business partnering, cross-functional working, or moving into a business away from finance. There are a whole multitude of options.

Chris Ortega

I'm the CEO of Fresh FP&A. At Fresh FP&A, we provide fractional CFO and advisory services to high-growth businesses, which include software, technology, retail, e-commerce, pharma, and renewable companies.

Magdalena Sailer

I've been working as a finance professional for about 15 years in various functions with very different teams, always as a finance business partner, and most recently as a finance director for VICE Media.

Wherever in the world you're working, be aware and be careful of the different titles in the wider finance profession. Different career paths can have a completely different meaning in day-to-day jobs. Also, underlying education as well as work experience can vary tremendously.

I usually split finance into FP&A and accounting. I’ve always worked in fast-paced, agile organizations with very little hierarchies, and every finance position has had the chance to work as a business partner and very close to sales teams, account, or project management teams. This isn’t the reality for every organization and industry.

Defining the evolving roles in finance

Premal Parekh

Let’s start off with defining the roles because it's so different across the landscape. It differs by scale, complexity, country, etc.

Magdalena, you mentioned three types of roles towards the end of your introduction, What do they mean to you?

Magdalena Sailer

In the organization I'm working for right now, finance is split into the big areas, accounting and FP&A, and then there are subteams like treasury and taxes, and so on.

Accounting is a support function for finance; you can't do FP&A without accounting.

Premal Parekh

Chris, what are your thoughts and experiences of the different types of roles and where you've seen those roles develop for individuals?

Chris Ortega

You’ve got to go back to the history of it and how FP&A spawned.

Nobody knows the history exactly, but it was probably a business partner who created FP&A, someone outside the finance organization who probably had a great relationship with finance. And they said to that accounting or finance person, “Thank you for the numbers. But what does this mean for the future?”

And that accountant probably said, “Yeah, this is outside the month-end close.” And they probably provided a great answer to that person.

So that was the inception, where the business spawned that need and appetite for FP&A, and it’s evolved over the years.

I named my business Fresh FP&A, but our version of FP&A isn’t what I consider to be the 1.0 version. That 1.0 version was financial planning and analysis. Just the name is very quantitatively heavy. We came in with the planning, the analysis, the data, Excel, the software, etc.

Over the last couple of years, that FP&A and that value has gone to financial partnership and advising. I call it the blue ocean of FP&A. Nowadays, the business expects finance to be the planning and analyst person.

Technology should be taking a lot of that data aggregation, data mining, and VLOOKUPs, and traditional financial planning and analysis can be very focused on the technology side. Where we need to upskill our mindset, skill set, and value to the business is definitely around financial partnership and advising.

To me, that’s been the evolution and history behind the inception of FP&A, and where we're going to provide value in the future.

Career opportunities beyond FP&A

Premal Parekh

What do you believe are the career paths for professionals beyond the existing FP&A roles that are around today?

Chris Ortega

If there's one takeaway I can provide, it’s this: get outside of finance and go learn the business.

Part of what we do at Fresh FP&A is work with CEOs, founders, and business owners all across the world. We have operations in the Americas, APEC, and EMEA, so we’ve got the whole globe covered. And that's one of the most important things finance professionals need to do. Go and learn the go-to-market function, go learn how you serve customers. Get that acumen outside of the finance organization.

I always found myself being a salesperson who loved finance. In high-growth SaaS businesses and through leading those finance organizations, HR, sales, and marketing operations were always my greatest business partners.

And one of the most important things I learned in getting outside and learning the business was the art of influencing.

So if you want to learn the business, go and sit down with your sales, marketing, revenue, and operations people and ask them about problems, opportunities, frustrations, and challenges that they see in their business and how can you help them solve them.

Once you start to understand the business, now you've got that seat at the table. You’re no longer just the number police and smacking them across the head when they go over budget, you're actually providing value.

One of the biggest things that I've learned in my career is if you're able to take pain from people and transition that to productivity, you're a value-added partner at that point. And a lot of it starts with getting outside of that comfort zone.

You get comfortable with your Excel spreadsheet and your financial models, but you need to get connected and find those challenging opportunities outside the finance organization.

Magdalena Sailer

I absolutely agree with that experience. I think the two crucial points when FP&A fails are ignoring accounting, ignoring the rules, or ignoring business reality. If you don't know what's going on, you can't verify your numbers. You don't know if your numbers are right, and you don't know what analytics you should do, or what questions to ask. So it's really important to go out and connect with your colleagues in the other teams.

Premal Parekh

Have a think about what the exit strategy or the growth strategy is of the business you're in. Think about it from right to left, right being the end.

If there's a company that’s possibly going to do a trade sale, a PE exit, a P sale, IPO, or growing to help grow their share price, go in and understand what’s driving the key parts of that business, and work backward. Understand from an M&A perspective or an investor relation perspective, read company accounts or listen into analysts' phone calls at quarterly or year-end reporting.

Some of the big listed businesses will give you an insight into strategy, initiatives, and an understanding of growth ambitions. That’ll then feed into the value that finance can create across the business.

Then it becomes a point where you as a finance individual can decide what your strongest skills are and where you need to develop. That could lead you into different parts of the business and different functions.

Through fact-finding and exploration, learn about that business that you're in or you want to be in if you're looking to move out of your current role or company.

The power of communication, collaboration, and connection

Premal Parekh

What skills and competencies do you think are highly valued in roles that involve business partnering and working with cross-functional teams?

Chris Ortega

Communication, collaboration, and connection. I call them the three power Cs of finance.

The most important thing is translating finance to the business, and that requires communication. ChatGPT and generative AI aren’t going to be able to take that really disciplined stuff and communicate it effectively to a business partner.

A lot of times, finance fails in that because we go talk to the business from a finance perspective. We talk about revenue and why it’s down and contract amortization and the business doesn’t even understand it. They completely shut down. So we’ve got to be great communicators.

The second one is collaboration. There’s no way we get anything done and level our mindset, skill set, and value in the business if we don't collaborate. Get out and go connect and collaborate with people.

I know virtually it’s hard right now because people are on a hybrid schedule and can’t always find ways to collaborate. Sometimes I pop into sales meetings, marketing meetings, and leadership meetings. It’s about having that way of collaborating with others and coming from a place of not commanding that collaboration, but wanting to be that collaborative partner.

The third one is connection. There’s no better organization that can connect the dots in the business than the finance organization. Everything stops with us.

We’re able to see the entire story of a business. We can connect the dots to the sales group, marketing group, operations, and HR. As we establish ourselves as that spoke of the wheel in terms of value and driving the business forward through uncertainty and challenges that we're facing, we can build that connection. That’s value.

Magdalena Sailer

People often think that as soon as there’s a focus on FP&A, the accounting skills aren’t at the very top level, and that's a crucial point when you think about why forecasting is failing and why budgeting is failing. Sometimes, we should be a little bit better at accounting and be really on top of the game.

It's also important when you think about digitization. We still need this basic skill. Without this, talking to the business doesn’t help us. We can't really show what we're able to do in our job.

Another point is interest in empathy, especially when you work outside of your finance organization with different teams, and the awareness that most people outside of finance don’t love math. They don’t love numbers, and that's why they avoid us. So it's really important to try to change the perspective to see where they're coming from.

Not everyone has studied business, administration, finance, or economics, so it's really important to try to speak their language to understand where they're coming from.

Chris Ortega

ChatGPT passed all four parts of the United States CPA exam. What that tells me is if there's a generative AI solution that's not a person that can pass the four parts of the exam, I think that shows that we're the baseline state. That should be the baseline expectation.

Coming from an accounting background, you’ve got to learn the numbers, but if you're able to translate that accounting complexity into language in that communication, that connection, and that collaboration that the business can understand, that's that translation.

GPT-4 can pass the CPA exam, but I’d love to see it try to explain ASC 606 to a salesperson. That's not going to happen.

My point is that you‘ve got to know the accounting side of it.

If I look at somebody who has a super strong accounting background, a CPA, and is naturally curious, I have somebody on my team that can build great relationships, and somebody who’s able to manage complexity, when you're looking at the business weight for weight, the value is going to be placed on more of those skills.

Learning accounting is hugely important. But when you're looking at the value of where you want to invest that time, energy, and effort, people need to be thinking, Where am I placing my bets on the future of my value to the business?

Premal Parekh

Just to challenge that, when someone in the business says to me, “If I want to save costs in X place, will this make a difference to my EBITDA or not?” They won't know the answer to that, but I do know because I have the fundamental understanding of what an EBITDA impact is or a depreciation impact.

Knowing that fundamental accounting puts you in a position of understanding value protection versus value optimization, which I think is that communication, collaboration, and connection. You really want to optimize value.

And then the third one is really around full-on, brand new value that you can bring to a business through a brand new product, or you enter a brand new market where you probably think about a minimum viable product perspective. That's where you can business partner and use all of your knowledge and experience to decide whether it makes sense or not.

I think there's a fundamental platform, however, with the automation that we're seeing right now, it's partly a concern for people in those areas. And I think that depends on the size and scale of the organization that you’re in, and where you are in your career maturity as well.

Not every company is going to dive straight into automation or using generative AI. There are some first adopters, some very late adopters, and everybody else in between. So think about where your skills and your gaps are and look to build on those.

Empathy is one of my favorite superpowers in finance. We can empathize with our business, we can empathize when things don’t go so well, and we can celebrate when things go really well for our business leaders.

Magdalena Sailer

ChatGPT is really great, however, I really want to emphasize that if you don't know the basic rules, you can't check if ChatGPT has given you the right answer. It's the same when you go into digitalization and AI. These tools are all great, but if you don’t understand the basics of statistics, it doesn’t help.

Purpose, impact, and people: Guiding your finance career

Premal Parekh

Beyond FP&A, what can you do with these skills? What do exit opportunities mean to us as finance people? And where can we add value to that process?

Chris Ortega

In terms of exit opportunities, I look at my own career which started in public accounting. I did corporate accounting, realized that wasn’t where my passion was, jumped into FP&A, got my MBA at the same time, made it to Director of FP&A and Finance, then went to another company and got all the way up to VP and CFO level.

The thing that always helped guide my career was none of the vanity stuff. Throw out the titles, the pay, the power, and how it makes you feel. Find your purpose.

There are three things that helped me make that shift and start Fresh FP&A. I wanted to chase purpose over praise. I wanted to follow my purpose, and I wanted my team across the globe that help support Fresh FP&A and our clients to follow our purpose, not just the praise.

The second thing is to chase impact over income. Our clients, prospects, team, partners, and everybody we work with need to be united on this Northstar, which is utilizing our skills, passions, talents, and experiences to help others realize and achieve greatness.

That's the impact we want to make on clients. That's the impact we want to make in the fractional CFO space. That's the impact we want to make on partners.

Too often, people are chasing that job because it's $30,000 more. So chase impact over income.

The last one is the most important one, which is chasing people over profits. People are your most valuable resource.

Whenever you can focus on strategies and tactics and set the visions, the milestones, and the metrics where you're putting people at the front and not chasing profit, that’s where you're set up for success.

For me, those were the three things that helped guide me into decisions I was making, from moving out of accounting to starting Fresh FP&A.

And finally, take the leap of faith. The worst that can happen is it all fails. But there’s no such thing as failure if you learn.

Magdalena Sailer

It’s about connecting with different teams, whether it's an exit opportunity or any other development opportunity in a company. Connect with legal, connect with sales, connect with the taxes team, and so on.

Sometimes, you only have a certain perspective, and other people can see other pitfalls and chances. So it's really important to connect, go and find friends in other teams, and you can automatically add value when everyone’s sitting at the same table.

Premal Parekh

Absolutely. I recently saw a poll that was done on a finance community that said 21% of people think about exit opportunities as a CFO on an ongoing basis. They’re always looking for possible opportunities for an exit if a lucrative option comes along. 40% do it one year in advance, and the rest will consider doing it two to three years in advance.

With that in mind, if you're working within FP&A or working as a CFO or investor relations, it’s about understanding what you should be doing during these phases of a company's growth.

Finance is the backbone of the business and has the opportunity to see all the different parts of a company and understand what value is being driven in the business from a KPI perspective. But sometimes even more importantly, what do the external people believe are the perceived value drivers of a company? You need to ensure those things are being addressed during your annual cycles, monthly cycles, etc.

Embracing new opportunities and learning from failure

Premal Parekh

How can you move out of finance? And how do you get involved with projects that aren’t finance-related?

Magdalena Sailer

If you intend to move out of FP&A and explore new fields, one key bit of advice is to always be learning. You can do LinkedIn premium courses or attend an online university, for example. If you want to learn something new, find different approaches and different courses, whatever you're interested in.

I also suggest thinking about what kinds of people you want to connect with. We all have different personalities, and not everyone in FP&A is outgoing and extroverted and connects easily with everyone. So if you intend to move out of the profession, think about who you’d like to work with. Have a coffee, connect with them as human beings, and find out what's going on in different teams.

Discover your specific interests on a personal level and then ask to collaborate on a project or suggest doing a project between different teams. No managers are against you making a suggestion or bringing up an idea.

Chris Ortega

Imagine you wake up and you’ve got $100 in your bank. 70-80% of that $100 for your learning and development is going to come from being on the job. The other 20-30% is going to conferences and events. That's the other majority of how you're going to learn and get outside of this.

To give you a real-life example of when I took the leap of faith, I previously worked at a large pharma company as a Senior Financial Analyst. I said, “I want this ability to forecast R&D across eight different currencies in 30 different locations.”

I took on that project and I failed because I didn't get the Singapore dollar conversion to USD correct. The CFO was about to go on a call with investors and we were submitting R&D labs, and I found it at the 11th hour. I was sitting there thinking, Oh my god, this is going to be so bad.

The next day, I saw that I had a meeting scheduled with the CFO. And I was thinking, Let me go get my cardboard box ready. Let me make sure my resume is good. I was preparing for that conversation.

The CFO sits down with me and gives me the best advice you can take in your career. She asked me this one question, “What did you learn from this?”

I said, “I'm sorry, I take full responsibility. This is my mistake. Here's how I made the mistake; I didn't get the conversion done correctly. I should’ve looked at this. In the future, these are the things that I'm going to do to make sure that this doesn't happen again and that you're prepared. I learned from this situation.”

She said, “Chris, you can’t carry that fear of failure. You jumped right into this, you made a mistake, you owned it, you learned from it, and you're going to be better in the future.”

That was the turning point of my career. It's not like the world ended. Once you get over that fear of failure, you're able to get inside that business and find those MVPs, where you can test and learn and get feedback, real-life applications, and insights, and have a great group of trusted people that are going to call you out.