Transforming Financial Planning & Analysis
Most CFOs are dissatisfied with their FP&A process, seeing it as a resource drain with little value. Insights from over 700 organizations reveal how top-performing companies turn FP&A into a strategic powerhouse that drives real business results.
Theme 1: From Strategy to Action
The foundation of high-value FP&A is the ability to translate abstract strategic goals into concrete, funded action plans. It’s about moving from “what if” to “how to.”
The Path to Actionable Plans (Principle 1 & 2)
Best-in-class organizations ensure their strategy doesn’t just stay on paper. They break it down into specific initiatives and, most importantly, allocate real resources in the budget to bring those plans to life.
1. High-Level Strategy
e.g., “Become market leader”
2. Strategic Initiatives
e.g., “Launch product line X”
3. Actionable Projects
e.g., “Develop marketing campaign”
4. Funded in Budget
Resources are committed
Theme 2: Operational & Financial Integration
Financials are not just numbers; they are the result of operational decisions. Top performers explicitly link operations to the P&L and use forecasting as a proactive tool.
The ‘Why’ Behind Variances (Principle 4)
Instead of just reporting a variance, leading companies dig deeper to find the root business causes. This turns analysis from a report card into a valuable learning tool for continuous improvement.
Forecasting as an Early Warning (Principle 5)
A forecast isn’t a new plan; it’s an unbiased projection. When it diverges from the plan, it’s a critical signal to investigate business issues and develop mitigation plans to get back on track.
Theme 3: A Culture of Accountability
Achieving goals requires clear ownership. The best companies cascade both financial and operational targets throughout the organization and link performance to meaningful incentives.
Cascading Financial vs. Operational Goals (Principle 6)
While most companies cascade financial targets, the best performers also cascade the operational goals required to achieve them. This ensures everyone understands their role in driving results, not just reporting numbers.
The Accountability Engine (Principle 7 & 8)
This virtuous cycle ensures that performance is not just tracked, but driven. Accountability is made tangible when tied to incentives, motivating teams to achieve both financial and operational targets.
Performance Measured
Both financial & operational results are tracked
Accountability Assigned
Clear ownership of outcomes
Incentives Linked
Rewards are tied to goal achievement
Theme 4: The Pinnacle – Leveraging Business Drivers
Advanced FP&A moves beyond the P&L to focus on the underlying drivers of business success. It’s about measuring what matters most and making strategic investments to improve those metrics.
From Driver to Result: A Multi-Year Journey (Principle 9-12)
Top organizations identify key business drivers, set ambitious long-term targets for them, and then build a series of initiatives and projects to achieve those targets year over year. This creates a clear, strategic path to sustained success.
Identify Driver
e.g., Productivity
Set 5-Year Target
e.g., +20%
Launch Initiative
e.g., TQM Program
Fund Annual Projects
e.g., Training, Tech
Monitor & Reward
Track KPIs, link to bonuses