Finance Business Partnering – the search for value

Our recent experience with clients such as Rolls-Royce, Shell and Unilever has found increasing use of Finance Business Partnering as the model for cross-functional communication and decision support.

Recognising that this subject has received little attention in academic and research circles, we have carried out our own extensive surveys and interviews with organisations such as Aviva, BBC, BAT, Diageo, Invensys, Roll-Royce, Shell and Unilever, and Alan Warner, one of MTP's founding partners, has written a newly published book on the subject. 

The book covers the topic from two complementary angles - the experience of MTP in developing learning programmes for world class companies and focused research into what these leading companies are actually doing, the challenges they face and the lessons learned. 

The concluding chapter then puts forward some provisional conclusions which should contribute to a healthy ongoing debate about the best ways to define, identify and develop the right set of skills for the Finance Business Partners of the future.

If you would like an electronic copy of the book at no charge, or more information on how MTP can support the development of Finance Business Partners in your organisation,  simply contact us either by email at learn@mtpplc.com or on 01296 423474. 

The New CFOs - a book review

The New CFOs; by Liz Mellon, David Nagel, Robert Lippert and Nigel Slack, published by Kogan Page.

I chose this book because it is highly relevant to our own work running courses for financial people from international companies; we do not normally deal at CFO level as our focus in on business partnering at operating unit level but it is interesting that many of the issues are the same.

I have mixed feelings when I see a book written by four authors and wonder how that can work, particularly as they are from different countries and backgrounds. Three come from the USA and one (Nigel Slack) from the UK and, as far as one can see from their biographies, their backgrounds are from general management and academia, rather than the Finance Function. It could be argued that this has some advantages and encourages objectivity but one would have expected at least one out of four to have worked in Finance. At times this lack of practical experience showed.

The book starts with an excellent four page foreword by Zarin Patel, CFO of the BBC, which could stand alone as a summary of what it takes to be a great CFO. In some ways this is a problem for the authors because this foreword creates expectations that are hard to follow. In particular it makes the reader hope for lots of views and examples from CFOs of similar stature but these are not forthcoming.

The week before reading this book, I came across a report from Ernst & Young titled ‘Finance forte – the future of finance leadership’. This was published in 2011 and contained no more than 30 pages, yet it was full of real life examples from top companies. It made interesting comparisons between the career routes of top CFOs, some MBAs, some accountants, some specialists in one sector, some who move around. But the impressive aspect was the companies they worked for;  GSK, Nestle, Phillips, Unilever etc.

In contrast, this book is very short on such examples; I only counted seven references to company CFOs and while Google and Siemens were impressive, GenPact, Liberty Africa, and UBM were less so. I know from our own recent book on Business Partnering that getting approval for inclusion of content from top companies can be laborious but four authors should have been able to produce more than this. Fictitious or disguised case studies in which Gordon or Larry have to decide how to work with Mark or Sally do not sit well and do not live up to the expectations from the title and the reputations of the authors.

So what is there in the book that is worth recommending? The second chapter on strategic leadership makes some very good points, stressing the importance of communication skills and the need to see things from a broad business perspective. These are very similar messages to those that we cover in our work on Finance Business Partnering; it is reassuring that this is reflected at higher levels too.

The later chapters on control and risk management also make some sound points but it was then that I began to wonder who this was aimed at. Would an aspiring or existing CFO need to be advised how to use the well-known risk matrix and be informed about the importance of robust controls? This confirmed my own conclusions that, once finance people rise to senior level, the emphasis should be on behavioural and business skills; it is unnecessary (or too late) to cover financial principles. And some of the content betrayed the lack of financial expertise of the authors - a definition of investment taken direct from Wikipedia was particularly unimpressive and ‘avoid being a number cruncher’ is not advice that any financially qualified person should need.

There was an attempt to provide a practical tool near the end - a questionnaire that allowed self-assessment of CFO potential on a five point scale. I was ready to be impressed until I saw some of the questions; are you a great communicator? Can you manage business risk? These are not great questions for a five point scale and should be someone else’s opinion rather than your own. It all added up to an impression that this book had been strung together by authors who have approached the topic in an academic rather than practical way.

So it is difficult to find a reason for recommending the book, apart from the foreword and the one chapter on strategic leadership. It is expensive to buy and not value for money. A good CFO would not see it as a worthwhile investment.

Postscript
I reviewed the electronic version and found that, unlike some previous e-books I have reviewed, it had a comprehensive index. The idea is potentially brilliant; you press the entry and it takes you to the page. Unfortunately the hit rate was only about 50%, which may have been my poor finger work but which I suspect was partly poor indexing. However, my overall impression was good; I had previously favoured hard copies of business books but the overall experience confirms my view that e-books are the way forward.

Buy the book here;
http://www.amazon.co.uk/The-New-CFOs-Financial-Revolutionize/dp/0749465174

Developing & Improving MOOCs

‘You MOOC, iMOOC’ by Bob Little, Training Journal, May 2013

I have chosen this topic for this latest article review because MTP has recently been asked by two major clients to work with them to develop new learning material, using the MOOC approach.  We had not previously been involved in working this way and we are in the early stages of development; it looks to be an intriguing concept with much potential.

First let’s clarify the terminology by defining what must be the ugliest sounding name and acronym in the history of learning; MOOC stands for Massive Open Online Courses, a title which instantly grates on those of us who have been brought up to value tailored learning for relatively small groups.  But an ugly title and acronym should not make us pre-judge a new approach; it must be valued on its merits.  Effectively MOOC describes self-created online material which is offered to large numbers on an open access basis, usually with short and simplified content.

My overall impression is that the article is surprisingly negative about the central topic and, though this makes a pleasant change from typical Training Journal articles which push consultants’ products, I am not sure that this criticism is fairly balanced.  For instance it skirts over the significant economic benefit from making learning available to large numbers at a relatively low origination cost, particularly compared to conventional e-learning packages and virtual facilitation.

Apparently the doubtful distinction of inventing the term ‘MOOC’ goes to David Cornier in 2008, when he used it to describe a course offered by the University of Manitoba, and its main use so far has been in the Higher Education Sector.  The early part of the article argues that many applications of MOOC are repeating the mistakes of the early days of e-learning by producing text and pictures on screen, without opportunities for interaction.  Someone called Poonam Jaypuriya is quoted at length, complaining about the lack of interactivity and engagement; this is where the term ‘iMOOC’ is introduced, a name given by this person to MOOC which embraces interaction.

It is argued that this failure to create interaction leads to extremely high drop-out rates; Stanford have introduced courses of this type which have been offered to 100,000 people but admit to a drop-out rate of 85%.  This is believed to be due to information overload and a failure to take account of different knowledge levels.  The rather unambitious view seems to be that such drop-out rates are inevitable and that you still have large numbers of learners who would not otherwise have been reached.  My own preference would be to find ways of increasing the engagement levels.

One way of achieving this aim is through better quality material; the suggestion from the article is that much of the content is boring, reproducing lecture notes or showing bland videos, an approach that is bound to fail.  I would argue that there is a need to choose a mix of media, and add interactive features like multiple choice questions and ‘drag and drop’ options.  I would also argue that this learning approach requires that key skill that is so hard to find; the ability to structure potentially complex content in a way that is attractive, concise and simple while maintaining conceptual rigour.

However, the author argues that the truly effective MOOC must go further.  It must encourage interaction through other features that particularly appeal to younger users - simulations, games and, most important, the subsequent use of social media to share ideas and views on content. 

The ambitious goal is for MOOC to be the starting point for ‘Life-long networked learning’ whereby learners are brought together to explore and learn in a structured way after the initial MOOC input.  There should be pockets of learning sited around the web and the instructional design should have this as its main objective.  A number of ways of doing this are suggested and the words used make it sound much easier than it is in practice; aggregation to provide accessible web pages or newsletters, remixing and repurposing material to fit the needs of each participant; feeding forward, sharing material and ideas with others.  This felt to me like jargon being used to disguise how challenging this is; trying to structure something for which the appeal to participants is often its lack of structure.  And the author admits that the dependence on learner proactivity is a serious barrier to delivering this critical phase.

So my overall view is that the article is a useful description of MOOC and its strengths and weaknesses for someone who has not come across the concept before.  However, the author is too negative about failings which are more about poor learning design than about the concept itself.  With the right learning objectives and a commitment to tailoring, it can be a powerful new tool for cost effective learning.  The author is also perhaps too optimistic and superficial about the challenges of establishing a system of networked learning, a holy grail that is likely to be the subject of much searching for Learnning & Development professionals in the future.

Read the article;

http://www.trainingjournal.com/feature/articles-features-2013-05-01-you-mooc-imooc/

Innovation as Usual by Paddy Miller and Thomas Wedell, HBR Press

This new book, by a professor at the Spanish Business School IESE and the Head of a New York consulting firm, challenges some conventional thinking about innovation, in particular the preference for away days and taking people out of the business to encourage ‘blue sky’ thinking.  Instead the argument is that innovation must not be separated from the job but must instead be part of the everyday activities of all key people, not just a chosen few.  All must be 'innovation architects' which, by no coincidence, happens to be the name of the co-author’s consultancy firm.

This argument is supported by emphasis on six key behaviours or, as they are described, ‘the 5+1 keystone behaviours’.  The extra one is that of persistence, without which the other five will wither.  These five behaviours have a chapter devoted to each of them, a nice simple structure that makes the book easy to navigate.  The five behaviours are:

·        -  Focus

·         - Connect

·         - Tweak

·         - Select

·         - Stealthstorm

All except the last bullet may seem rather obvious but there are important points made in each chapter, not necessarily breakthroughs in thinking but useful reminders of good practice.  The message around Focus is that it is important to provide key people with guidance around the areas where they should be thinking creatively, in particular the company’s strategy should make it clear where that focus should be.  ‘Focus beats freedom’ is their message.  Though this point is well argued, my initial response was that this is too dogmatic; there must be occasions when free thinking is desirable; more about this later.

The need to Connect is about having access to external sources, the key message being that true insight comes from contact with a range of perspectives; thus innovators must seek and be given opportunities to access external domains where the views of customers, competitors, suppliers and other external bodies can be sought.  It is also about maximising internal sharing, providing ‘creative space’ for this to happen.  The example quoted is Steve Jobs’ design of Apple’s headquarters to maximise opportunities for such interactions (it was surprising and perhaps significant that this was the book’s only mention of Apple, see later).

The arguments behind Tweak and Select are that there are usually too many ideas to implement so a process of filtering is essential.  Tweaking is about challenging because many initial ideas are flawed and need rejecting or changing at an early stage, for which there must be rigorous testing processes.  The further and less obvious point is that the normal selection processes contain inbuilt bias which affects judgment; there is a need to have systems which encourage objective, thorough analysis, irrespective of where the idea has come from.  This requires gatekeepers who have been properly trained and what the authors call a ‘engineered decision environment’.  This seems sensible but hardly different from the innovation funnel processes that exist in many top companies already and which are sometimes criticised for slowing down decision making.

Stealthstorm is a less obvious heading and is about the importance of managing ideas through the corporate culture and the political influences which impact decisions.  Rather than trying to remove innovators from the politics, there should be concerted efforts to embrace it, to remove anything which is counter cultural.  The idea is to encourage innovators to ‘play politics’, to use this as a positive factor to guide projects through the system.

At this stage of the book I began to feel frustration because I was looking for a debate about how this argument fitted with the other school of thought, that you must take innovators away from the politics and the culture if they are to be truly creative.  The most well-known example of this was Steve Jobs in his early Apple days, creating secret ‘Skunk-works’ where a team could work in isolation, away from the bureaucracy and culture.  The fact that the book does not quote this example or any others of its kind, suggests that it is only looking at one side of the argument.  I would like to have seen a debate and maybe some guidance on the different stages or types of innovation when the different approaches apply.

So in this sense the book disappoints, though it makes some valid points and provides some useful guidance for those who want to bring greater awareness of innovation into the normal workplace.  On balance however, I feel that its contents probably justify an HBR article rather than a book.  It is padded out with some rather obvious points and theoretical arguments.  It would also have benefitted from more examples from top companies; there were some good stories but too many were disguised or anonymous, thus reducing their impact.

Buy the book