What you need to unlearn to succeed in FP&A
See, Universities teach you to go for 100%.
If you are ambitious, you want to get the best possible grades in school.
The better your grade point average when you graduate, the better your chances of landing that coveted FP&A job you were going for.
And, while that’s true (at least to some extend) it also harms you.
Why?
Well, because to succeed in FP&A, you can’t go for 100%.
🛑 Trying to explain 100% of the variances at month-end close results in analysis paralysis.
🛑 Trying to cover 100% of the metrics in your presentation results in more noise than insights.
🛑 Trying to build a financial model that’s 100% perfect means you likely won’t finish it by the time the decision needs to be made.
🛑 Trying to get 100% forecast accuracy means your projection is outdated by the time it’s finished.
🛑 Trying to win 100% of the arguments with your cross-functional business partners will break your professional relationships.
So, you have to unlearn the perfectionism your university education gave you.
Instead, study what Vilfredo Pareto figured out back in 1906.
20% of the inputs (such as time and effort) tend to give you 80% of the results. To get the final 20% of the results, you need to put in 4x of the resources you had already invested - meaning it’s typically not worth it. This principle is called the 80/20 principle.
It’s one of the essential mindset shifts you need to make to succeed in FP&A.
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