How to get a seat at the decision table when you’re in Finance

business partnering
Written By Christian Wattig

You want your voice heard when decisions are made.

Here are 6 ways to get you there (from easy to difficult) 👇

#1 Show historical performance

#2 Run sensitivity analysis

#3 Calculate margins per product

#4 Conduct a competitive analysis

#5 Create a SWOT analysis

#6 Lead a scenario planning process

Let’s dive in.

Here is the problem: You are in a corporate Finance role, and part of your job is to “partner with the business” and “influence decision making”.

You probably realized quickly that that’s easier said than done. To influence the commercial team (sales, marketing, product, R&D etc.), you need a seat at the table where decisions are made. In other words, your cross-functional business partners need to invite you in. They need to let you know they are about to make a big decision and share relevant information.

That requires trust.

In the case of Finance, it means that your business partners don’t think your job is limited to managing their budget, updating forecasts, and making pretty slides for management.

They need to see you as someone who can help them make better decisions.

And how can Finance support the decision-making process?

By sharing insights derived from analysis.

The key to getting a seat at the table is to do it proactively. Don’t just ask, “what can I do for you?”. You may not get much back because team members from other functions may not know the extent of what you can do.

So, you need to show them what you are capable of. Here are six possible ways you can do just that (ordered from easiest to most difficult):

#1 Show historical performance

When investment or planning decisions are made with data from just the current year, biases easily creep in. A common one is called “hockey stick planning”. Estimates of future performance can be overly optimistic if they aren’t contextualized with how the business performed in the past.

So, share the financials for the last 4-5 years. But don’t simply send your business partners a giant spreadsheet with the P&L.

Only include relevant metrics, don’t share every line item. At the same time, don’t limit it to the P&L. Take a look at the balance sheet and cash flow statement and show the metrics that may help make the decision at hand.

#2 Run sensitivity analysis

Help people understand which business drivers matter more than others. That will help them focus on the most significant risks and opportunities. To get there, create a sensitivity analysis. Build a simple model in Excel, for example, for revenue. It needs to include the significant drivers of revenue, for example, new customers, growth from existing customers, or international expansion. Then, estimate the impact of each business driver on revenue.

Then you can make statements like “adding a new customer gives us on average $0.5m in annual revenue”. Or “each additional percentage point in inflation means that we need to generate $1.0m in additional revenue to keep the same level of profitability”.

#3 Calculate gross margins per product

Your company may sell multiple products or services, all priced differently and with a different cost structure. But many businesses don’t break out profit contributions. That’s because it’s typically not something you can simply export from your ERP system. You need to do some work to arrive at those numbers, which can include making decisions on which cost component to allocate or which discounts impact which product.

But doing the work can be pretty eye-opening. It can give your business partners insights that can help them advocate for more resources to grow a profitable product or even discontinue one that takes a lot of time without adding much value to the bottom line.

#4 Conduct a competitive analysis

Few brands command high loyalty. Most companies have to deal with the fact that consumers switch between competing brands regularly. So, knowing what competitors are up to matters. When you do the analysis, do not limit it to the financials. Listen to the quarterly analysis calls of your main public competitors. That allows you to include non-financial items like new product launches or other shifts in strategy that may impact your business.

#5 Create a SWOT analysis

You probably learned it in college: SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It sounds simple but can be tough to put together for your company or even just for the business unit you support. Before you start, you may ask, “how should I know this? I’m just a junior Financial Analyst”. But you’ll see quickly that taking a step back and looking at the bigger picture is something few do. It’s something that easily gets skipped when people are busy fighting fires every day.

#6 Lead a Scenario planning process

Of all the ways to add value we have discussed here, scenario planning has the highest return on investment. Rather than just showing a sensitivity analysis, you are looking at possible futures that may happen. Look at internal and external business drivers. Then flex them to arrive at worst-case and best-case scenarios. If you add them up and combine those that will likely be linked (for example, inflation and a recession), you’ll create scenarios.

But it’s important not to stop here. The real value of scenario analysis is created by linking them to concrete action plans. If you prepare now for what you will do when the worst (or best) comes to pass, you’ll likely have a much better response than when you make it up in panic mode.

In sum, to get a seat at the table where decisions are made, you must prove you can do more than cut budgets and update forecasts. A great way to do it is by flexing your analysis muscle.

Christian Wattig
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