Navigating Change Management and Transitioning to CFO from FP&A

Welcome to FP&A Tomorrow, where we discuss financial planning and analysis, examining its current state and future prospects, with your host Paul Barnhurst.

In today’s episode, Paul engages in an insightful interaction with Philip Watson, for a discussion on what it takes to excel in financial planning and analysis (FP&A).

Philip, the CFO of Paddle, brings a wealth of knowledge, having led FP&A at ZoomInfo through its rapid growth and IPO. He is known for his commitment to developing talent, Philip's leadership has shaped the careers of many finance professionals. Currently leading Paddle’s financial strategy, Philip is transforming how fintech companies handle complex financial operations.

Key takeaways from this week's episode include:

Here is a concise summary of the key points from the discussion:

• Great FP&A extends beyond finance skills, encompassing the ability to communicate with stakeholders, understand the business, and manage relationships. It's about being operationally involved, translating complex financial stories, and driving business insights.

• While finance skills are fundamental, the future of FP&A will require advanced technical abilities. Soft skills, like communication and stakeholder management, remain crucial, but familiarity with data science and coding will become increasingly important.

• Emphasizing the importance of small, incremental improvements, aiming for 1% better every day. This approach, combined with rigorous measurement and process optimization, helps drive long-term business success and operational excellence.

• Sales compensation is a significant driver of behavior and revenue. Aligning incentives with business goals is essential to ensure that sales efforts contribute positively to the company’s financial health and strategic objectives.

• Implementing a detailed, three-statement forecast on a rolling 18-month basis provides valuable insights into future business performance. This process requires the right tools, experienced personnel, and a robust infrastructure to ensure accuracy and reliability.

• FP&A serves as an excellent training ground for becoming a CFO. Exposure to various business aspects, forecasting, and financial strategy prepares professionals for leadership roles, making FP&A a vital stepping stone in a finance career.

The title sponsor for this week’s episode of FP&A Tomorrow is Plan Buddies. Plan Buddies, where professionals meet excellence. Ready to elevate your career? Visit plan-buddies.com and become a member today. Here's a special treat. Use the promo code TheFPandAGuy, that is TheFPandAGuy for an exclusive 25% discount on your first-year membership.

Quotes:

Here are a few relevant quotes from the episode 

• "Some of the nice stuff, some of the machine learning stuff will probably take care of some of the grunt kind of modeling grunt, grinding through Excel that we have now, and it will automate some of that. It won't replace. I don't think it will replace people. It will change their job."

• “I think FP&A is probably the best launchpad for being a CFO. You get exposure to all the business leaders. You get exposure to all other aspects. It forces you to think ahead and not behind.”

• “Your job is to go translate numbers, to go communicate to the business, and be out with the business, in the meetings, in the room. It's important to be in the room.”

• “Sales comp is a massive driver. I mean, compensation is a massive driver of behavior.”

Follow Philip:

LinkedIn - https://www.linkedin.com/in/philipawatson

Website - https://www.paddle.com

Follow Paul:

Website - https://www.thefpandaguy.com 

LinkedIn - https://www.linkedin.com/in/thefpandaguy

For CPE credit please go to earmarkcpe.com, listen to the episode, download the app, and answer a few questions. For AFP FPAC certification answer the questions and contact Paul Barnhurst for further details.

In today's episode:

(01:10) - Introduction

(01:45) - Guest Introduction

(02:00) -  Defining Great FP&A

(03:25) - Future of FP&A

(04:20) - Guest Background

(06:04) - Scaling at ZoomInfo

(18:17) - FP&A as A Launchpad for CFO

(27:40) - Sales Commission Strategies

(32:47) - Effective Forecasting Practices

(41:49) - Rapid-Fire Session

(43:20) - Guest’s Personal Insights

(45:30) - Advice for FP&A Business Partners