What KPIs can I set my finance team around Finance Business Partnering?
It’s one of the most common questions I get asked when I am working deeply with a CFO around their capability build.
There’s only one.
Well there’s only one concept.
There may be many KPIs beneath this concept but get this first bit right and the rest follows.
That concept is…..
FBPs KPIs = Commercial Teams KPIs
I had this implemented to me when I first moved into a Commercial & Strategy lead role.
Previously my KPIs revolved around month ends delivery, budgets and forecasts, and process improvement. Things I was good at and thought I had good control over to do in my own circle of influence.
Then they turned into the KPIs of the sales, marketing and operational teams.
Mainly around Sales, Margin and EBIT delivery.
Coupled with a number of qualitative KPIs around people and process. The things we were doing to deliver those financial metrics.
At first this was hugely confronting.
I am not in charge of those areas, why should I be KPI’d on sales when I don’t sell anything.
But it forced and led to a significant behavioural change that I then drove through my entire finance team at the time.
Month Ends and Budgets and DSO and all the finance KPIs are awesome.
But they are a little internally focused. If the KPIs are not at the forefront of helping your customers and converting that into value for your organisation it all means nothing.
This KPI change forced me to lean into the other areas more and be front and centre to help them deliver those KPIs.
I found myself on more sales visits. Meetings and in field.
I found myself in warehouses and deliveries trucks.
In manufacturing and R&D facilities
All to understand the experiences those commercial departments lived and breathed every day.
So I could help improve them.
And the best bit.
Everything I knew and had been trained in, I thought others knew too. How wrong I was.
Seeing processes that were clunky and hard to use and inhibited our teams to deal with customers were obvious to me. And something I could help change. Whereas those staff I was working with felt they couldn’t.
I became useful to them.
It is why I am a big believer that if you truly want your finance teams out in the business and improving the numbers (rather than reporting them) set them KPIs that force them to do it.
What gets measured gets done.
If you set a KPI for someone and have enough incentive/pain attached to it, that person will find a way to achieve it.
Their approach will change and their behaviours will change.
Sprinkle a bit of solid guidance over the top and you have a very simple formula for success for any FBP.