FP&A: The HEART & SOUL of Business // Collectiv Conversations
- So we have to understand exactly what are the high value adding activities and the high value adding reports. So I believe again, delegate, automate, eliminate and allocate. (lively upbeat music) - Good afternoon.
Good morning. Good evening. Good day to everybody listening to Collectiv Conversations, where this is a podcast where we talk with accounting, finance, FP&A leaders from all across the world.
We look at people, process, platform, technology. We talk about a lot of different things, and I'm really, really excited for this conversation today. We're joined by Mohamed ELRouby, who's the head of FP&A - Takeda pharmaceuticals - for Takeda pharmaceuticals.
Sorry, that rolled off my tongue wrong. Takeda pharmaceuticals, head of FP&A there. Mohamed, welcome to Collectiv Conversations. - Thank you Chris for the invitation, it would be great pleasure having the(mumbles) information with you today. I remember talking and I remember the last time we were on stage and this is the good time.
This is when times were good, when we're over in London and we're having a great dialogue. And I think it was like this time last year, wasn't it? - Yeah, Well one year ago where we met in UK in the - Yeah CIMA conference. - I done about you man but I miss those times of being able to travel. And everything being virtualized right now, it's still a great experience but I'm really excited to have our listeners talk to you today and learn from you. No doubt about it, man. You're a tremendous FP&A leader, and you've done some amazing things in your role.
So let's jump right into it. The first question I wanna ask you is, when you think about FP&A, right? what's the first word that comes to your mind? - I believe FP&A is a heart of the organization. So when you say FP&A, I believe a function, sits in the heart of the organization, connecting all the dots and leading the whole process inside the organization.
- So it's the heart man. You can't live without your heart, right? so when you talk about your heart, right? that's a pretty valuable organ, right? I mean that's probably the most important thing we all have, right? - yeah So if it's the heart of the organization, what is it that FP&A brings that's so valuable to organizations? - I believe FP&A doing multiple roles inside the organization, number one, FP&A is the only functions that's connecting the dots. So each function is working in our silos or whatever. So the only function that has access to all data the only functions that can connect in all the dots is that FP&A.
So I believe FP&A is a valuable creator, value protector and value communicator as well for storytelling. So I believe FP&A is leading the whole value chain for the organization. - Nice, I love that, the value piece of it.
We are value protectors, we are value creators and we are value preservers. I love that aspect of it. So when you think about FP&A from like a people aspect, right? I know in talking with some different thought leaders that we had on the show, and we've talked with, everybody has a different perspective of what that high-performance partnership, what that model A player from an FP&A perspective, from a people perspective, what do you think are like the top five skill sets that really separate top tier FP&A talent? - I believe for FP&A we can talk about mindset and the skill set.
So from mindset, definitely the top FP&A should have the right points say by number one, moving from emails to face-to-face - Okay. moving from a system oriented to building relationships, speaking the language with the business. Also thinking as a coach, not as a policeman or a controller inside the organization. So the mindset of being a coach asking the right questions to the organization, moving from challenging people to selling the ideas, convincing people.
So there are many types of changing the mindset for the FP&A From skill set definitely, I believe business acumen, curiosity to understand what is behind number, curiosity to build the relationships. Also from a skill set is how to turn the data into insights. This is very important skill for FP&As. How to tell the right stories or how to turn numbers into life and build a proper business stories.
Also negotiation skills, selling skills, is a must to have also for FP&As. - Gotcha, man, you're listing out something for the skill set perspective here. you're going to make some of our listeners a little uncomfortable Mohamed.
You're talking about getting out there, talking to people, communicating data like those are... And I love that question because it gets people thinking outside of knowing, like everything you just mentioned from a mindset and skill sets perspective, you did not mention they have to be like the best IFRs our best US gap person to know like accounting, right? Like drain it. I don't discount that from a skill set perspective you have to have that understanding of accounting knowledge but everything that you talked about around business partnership, communication, meeting people where they are. And those things are so vital. And for our listeners is such a different challenge because I know when I first...
I started my career in accounting, right? Like I came in, I did the public accounting. And I'll show my accounting badge of honor right here. But from that perspective, for me it was always a challenge because people didn't understand that. And when you're in an accounting role you have to have that knowledge. But typically accounting is the starting point of where FP&A goes, right? Like that's where we pick up.
That's where we kinda pick it up and then we take it from that point forward. So I really appreciate that you shared the mindset and skill set perspective. So that's really cool. When you think about also from a people perspective and skills, right? What do you think is the most undervalued aspect of FP&A? - I believe FP&As are working very hard because they have to meet all the deadlines for budgeting, forecasting, all of that stuff. And there is a lacking of personal branding for FP&As.
So people still undervaluing FP&As as a number crunchers or system oriented. So FP&A should work very hard on creating values to the business and rebranding the FP&A inside the organization. So we have to change the mindset for ourselves and also change the mindset for our business partners. - Definitely.
So when you talk about changing that mindset too, right? Like, I think that's so difficult for people cause a lot of times the mindset of what the value proposition is for FP&A is people think of FP&A is like the accounting people, right? And it's hard to change that perception and that value that you create, right? Because most of the time leaders in different roles they just always looked at accounting and finance FP&As like, these are the people that give me the numbers, right? Like if I know I need to do the numbers I go to a County finance and FP&A How have you in your career as head of FP&A change that value proposition? Like, how do you go about changing that message? changing the value that you bring to not just be a scorekeeper, but to be a valued advisor? How in your career have you made that change? - Actually I got the chance to chair transforming the whole finance functions. When I joined the global FNG organization a few years ago. The function was a typical controlling function. So it was perfect in preparing financial statements, getting a green audit reports every year, all reconciliation's done properly. But there was no a proper decision supporting came from FP&A there was working in our silos there was a weak relationships between FP&As and the other functions.
Even the management was confused about many reports came from different functions - right. So I found people did not get the proper value from the FP&A function. So I decided to make a huge transformation journey to transform the finance, be a true business partner. So I started number one, by building relationships.
So we cannot start FP&A as a true business partner without building the relationships. - For sure. So I conducted one-to-one with all the stakeholders, starting from the GM until every single person inside the organization, sales people, marketing, IT. So I listened carefully to every one of them to understand what is expected from finance. What are the key objectives? What is their big business challenges? So after conducting the one-to-one meeting with everyone I understood exactly what should be needed to be improved in the finance function. Then the next step before getting overwhelmed and getting busy with their business operations and finance operations.
I had to understand the business very well. And also I encourage my team to understand the business. So I encouraged them to conduct frequent field visits, meet key accounts, meet our wholesalers, retailers.
So they have to conduct frequent field visit. We had to attend all possible meetings to understand what is behind numbers, to understand the other people's world for HR, IT, supply chain, all the other functions. Then after understanding the business very well and understanding their needs from our business. It was the right time to implement the proper technology or the right decision supporting tools.
And I saw Chris, many mistakes by the finance people who are implementing management reporting tool or BI tool, without understanding the needs from our business, without understanding even their business model, without understanding their needs. So I believe that should be the third step after understanding the needs and understanding the business. then we started to to provide the proper insights to our business because we have all the right tools, right? We have people understanding business. We have to understand what our people needs and we have the right technology. So it was the right time to provide insights to our business.
And over time we started to build the credibility. And can you imagine Chris, we was leading the sales and marketing meeting. Can you imagine finance moved from just working in our silos to leading the cinder monthly meeting? We provide to them all the visuals, all the dashboards.
And we start to ask them the right question. So we was leading the meeting. So it was a huge transformation journey at that time.
- Oh man, that's absolutely amazing. I love your like four step processes, right? The first one is the foundation of any high-performance FP&A team. You have to build the partnerships.
And I love that you took the approach of not building the partnerships based around the numbers. Like that leads into your next point about building the partnerships to really understand the person's business, right? I think too many times when accounting, finance FP&A people go about establishing that relationship, start building that partnership. They go straight to the numbers, right? They go, you had a budget of 50 widgets and you did 25 widgets, And we were looked at as like the number of people, right. Versus trying to take that time to really understand the pin points, the challenges the opportunities, the wins, the successes, and just taking that moment to understand the business that you're working with, right? Like understand literally the leader, understanding their operations, what keeps them up at night? And I think finally the icing on the cake is... For me, those two things take a lot of time, right? Like it's not like you go have one meeting with a functional leader and like(exclaims) we have business partnership, you've got to be proactive in how you're building those relationships.
And then finally you get those two building blocks done then boom, now you're ready for technology, right? Now you're ready. And I think you hit the nail right on the head. Too many accounting, finance, FP&A leaders, they think the technology is like the first place to go. And they're like, let's get the technology cause this is gonna increase our business partnership and help us understand, when it's like you can't do. It's like you're trying to run a 40 meters on the track and you don't even know how to crawl yet.
You know what I'm saying? So I love how you really distill that down. And it seems like that was really really impactful for your stakeholders. Right? One thing I want to talk about in the last piece that you mentioned was building the insights, right? Like obviously the major point of what we're going to do, relationships, understanding of the business, leveraging the technologies to ultimately make decisions. That's what we're here to do, right? We're here to help influence those decisions. So shifting gears to talk a little bit about processes, right? I think processes is always a slippery slope for a county finance teams, right? Cause a lot of it was manual, a lot of it is Excel, A lot of is just the rigmarole of going through. if you were to go through and like help those listeners on like, what are the key processes for people to really focus on to get the maximum efficiency out of their FP&A teams? - I believe finance efficiency is a must to have to provide agile decision support to our business partners.
And I believe in four, I name it four aids. So eliminate, automate, delegate and allocate. So we have to - love it - Yeah, So I like it very much. Eliminate is eliminate all the unnecessary procedures, eliminate all the unnecessary reports, eliminate the less value adding activities from your teams list, so this is number one process. Automate definitely we have to automate as much as we can all manual works to work more efficient.
And delegate, we can delegate our non-value adding tasks out to third party or whatever. And last one is allocate, we have to reallocate our team's time to the high value adding activities. I saw many FP&As are working. They have a long list every day. we have to provide this long list of reports to our regional office, to our stakeholders. But can you imagine that sometimes most of the reports even the people did not read it.
Sometimes you only read the cover letter. Sometimes you read the executive summit. So we have to understand exactly what are the high value adding activities, and the high value adding reports so, I believe again delegate, automate, eliminate and allocate. This is there(mumbles) - I love it, man.
And I think from a process procedure and financial efficiency, that's definitely a super fire moment right there guys. Elevate, automate, delegate, allocate. I feel like that should be like a song, eliminate, delegate, automate, allocate.
It should just be like a nice little jingle for all you people out there listening about how to get efficient financial processes. Cause I think, this is where like the struggle happens sometimes. cause it's always a balance, right? You want to be as efficient as possible, but you're wearing like 80 different hats, right? I done know about you, but I'm the finance person the collection person, legal, you name it, I'm doing it.
So it's all about how do you maximize like they take that four step based approach that you said on the highest value activities. I love when you said that because too many times people focus on what is the high value activity. So I wanna go a little bit deeper, right? You take that force, that process, you eliminate, you automate, you delegate, you allocate and now you get to these high value activities.
In your opinion, what are those high value activities that you want FP&A people to be focused on? - Yeah, actually the high value adding activities where we can get it, number one, we have to analyze the value chain for two parts. The first part is the finance function itself. So we have to analyze the value chain for the finance part itself.
So we can find a high value adding activities, for example, by reviewing the accounts receivable or anything that can add high value adding like a cash flow optimization to our shareholders. And I can emit this a direct value to our shareholders. The second one is the value chain for the whole entire organization.
So we have to analyze the value chain for the whole entire organization. And we have to sit with the business people. - For sure. - What is the key priorities this year? What are the key strategic objectives this year? And based on that discussion, we have to agree with the business people, what are the top activities or the higher value adding activities. And then we can reallocate our team's time to those high value adding activities.
- Definitely, definitely. Mohamed, you can tell that you've lived and breathed this man. You can just articulate the steps, right along the way, right? Now, given that you've had a lot of experience around this four step, and I love that four step methodology as well. I never really looked at it that way. So I think that's very insightful, when people are going about to follow this process framework, right? You had to come along the way, some gotcha moments, right? So moments where it's like, man, I wish I woulda remembered that, or I wasn't expecting this, or those pitfalls that anytime you're running an initiative like this and you're leading it from a head of FP&A perspective. You're gonna find those like pitfalls or skeletons in the closets and those what could go wrong, right? Care to share any of those experiences.
As long as you've been making this financial transformation for high value of FP&A. What are some of the common pitfalls that you've kinda come across? - Yeah, actually from a process perspective, we usually get the buy-in from the management before implementing any new technology or any new process so we have to get the buy-in from our top management. And then also have to get the buy-in from our teams, as said, because if they feel like a threat from technology or they might loose their job or whatever because of the technology. Two, we have to get the buy in also from our team.
And also we have to share the benefits and the value from implementing such a process or a such technology too. Once we get the buy-in from all the stakeholders I believe that would make our life easy in implementing the technology. And then as I mentioned, that we have to understand the business very well, before implementing any new technology.
Because we have to sell to our customer what they need not what we want to sell as finance people. - Nice, I love. That's another fire moment right there, right? Key phrase, give people what they need, not what they want. Right? Does the sales person in your organization know what they want? No.
They don't know, they remember seeing this fancy Excel file that gave them this number. They don't know if they want that or not. And it's all about meeting them where they are.
And I think that's a key phrase that you just mentioned. Right? When you build these partnerships it's all about a halfway, right? We have to go down more, right? We can't be pushing metrics and all these numbers if they don't make sense to people. We have to understand what their needs are. Right? And that's a very therapeutic way of going about it. Right? It's a very genuinely way of going about building a relationship because you're coming from a perspective of listening, right? You're coming from a perspective of, I'm trying to understand what you need.
Then I can help give you what you need versus like this is what you want. Like here's, it's dealing in this period, right? And a lot of times that doesn't have value, right? It's the report that people get in their email and they file it to another file because they don't even look at it. So really, really, really great insight.
So talking about shifting the platform, right? Platform technology, that's one of the third one that you mentioned about partnership, understanding the business and go into technology. Right? What role do you think technology plays in what finance FP&A teams in the future are going to be valued at? Their value proposition for FP&A teams in the future? What role does technology play in that? - Yeah, I believe technology is playing a very essential part to help the FP&A to create value. So to free up our team's time, we need first to focus on efficiency.
So I believe to mission, like for example, from RPA or AI that will help our FP&A team to free up their time. And then we can reallocate their time to spend a quality time with the business people, building relationships providing insights, understanding business. So technology is a big help number one, to free up their time.
And we run multiple surveys and I saw so many articles about the big VPN that shared by the FP&A team. And the first VPN that shared by the dependent team is we don't have time to build relationships. We don't have time to spend to conduct a frequent field visit or spend a quality time with our people.
So technology is a big help to freeing up our teams time. Also technology is helping definitely in data visualization and the data storytelling. So it's also helping very much in this area and also having the cloud, for example, VPN that will help all the stakeholders to have access to data at any point of time. - Nice - As you know that 20 years ago or whatever every stakeholders has to wait until finance gives them Excel sheet or PowerPoint - (laughs) - is the data, right? - Yeah. So now now using technology, for example, our GM can, for mobile, can access what is the sales data on daily basis, can access what is the P&L? Just using the cloud and using the technology.
So it's a bit healthier for sure - Man. That's awesome. Ironically enough, I still see some people live in the, "hey, give me the numbers in Excel email." Like how many accounting finance people, that was like our badge of honor.
It was like, we get the email and you know it takes you like 15 minutes to get it, but you're like, that's gonna take me til tomorrow to get you that number. There's some other things I gotta do. Right? And like daily, things are moving so fast. Talking about the pandemic man, things have moved so fast that you don't have a day to wait to react and make a decision. Like most of the time I know for me during the pandemic, I had agile scenario planning, it was down to the day like every day my assumptions were changing and there's no way like our business leaders can make decisions or guide the business on waiting a whole day to get information like those cycles are over. And you mentioned a great point like technology is meant to accelerate those things, right? It's meant to get this information to people as quickly, as efficiently, as accurately as possible.
So people are informed, right? I think, when you talk about the pain I want to talk a little bit about the pandemic, right? Like one of the emerging things that I've seen is this whole principle of agile based planning versus static base, right? That's a trend that I've seen is like people are getting away from doing that three month forecast and like really, you don't forecast down to the monthly basis if it's weekly at this point. So when you think about some future trends that are currently going on as we sit in this pandemic what are those trends that you see carrying over into 2021 and forward? - Yeah, you said it all actually Chris, which is scenario planning and agile decisions supporting to our business partners. We cannot wait until we prepare a presentation or preparing a detailed Excel file. So they need someone to showing how you live it with agility to provide support. So I believe, for example, one of the good projects I implemented in my company which is using RPA - okay.
internal data into insights. So we are as a finance, we had previously we have to spend too much time in getting data from system, analyzing data, combining data, identifying the key variances. Because we are managing a big region.
So we have to send emails to big numbers of stakeholders asking them what's behind numbers. What are the commercial drivers? It took a long time - Yeah just to combine the data and getting the right business driver. Then we have a limited time to have a quality conversation with them, running scenario planning, and getting the proper business insights and foresights. So once the company launched the RPA technology actually we are using right now, the robot to number one, downloading all the reports on behalf of us, identifying the key variances on behalf of us because we fit like a rule, any variance, for example, less than 0.5 million US dollar, ignore it.
So any variance above $0.5 million US dollar, please send the email to the right person, asking them about their commercial drivers. So robots sending email on behalf of us getting insights from commercial drivers, from people on behalf of us. Then I have a ready-made report with all the variances with the key business drivers. And then I can have time to spend using this report and to spend the quality time with my business partners providing scenario planning, providing insights for sites. So it was a big change in our turning data into insights process using the RPA technology.
- Man, dude, you're already living in like 2023 dude like the stuff that you've been able to do in like RPA and automatically like a robot seen in various analysis and people responding to a robot. And you're just sitting there like, man, that is absolutely tremendous. And I think what's important for listeners to know is like people across the board are doing those sorts of things, right? This isn't like we're coming into this new frontier of automation and leveraging RPA or AI machine learning, right? Businesses, industries and teams have already started implementing these tools, like, it's already here.
And I think it's important for people to know that there's plenty of use cases around this stuff, right? But you have to make sure you got that financial efficiency. I think the other piece you got to make sure you get is the right people in place, right? People are so important, if you wanna have that transformative value proposition that you're moving from scorekeepers to valued advisors you got to have the people that's the foundation, right? And I think what I really like hearing from our dialogue and conversation is you have laid down, you've done those thing, you've already implemented RPA. You've already led a financial transformation, right? And you're doing all these things already. So for the listeners, that's important to know like these are things are already getting done and along the way.
So one thing in closing and wrapping up, I always like to ask all of our... and I've been sitting here taking notes around this. So I got a wealth of information to take away. When you think about what 2020, what the future looks like for FP&A, right? Whether it's people, process or technology.
like what do you think are those major bets to place into the future, right? Like if you were to go and say, hey, if there's two, three things to really focus on and be really good at for this new frontier that we're moving into with the pandemic, with the value proposition, with the financial transformation that we're doing, what will be your key bets as we continue to go forward and come out of this pandemic? - Yeah, actually for FP&A definitely it's become now a must to be a technology savvy. So all FP&As should be a technology savvy. It's not an optional now. We shouldn't be definitely our technical guys who are programmers but definitely we have to be aware of all the up-to-date technology.
So this is a number one from soft skills, definitely we'll have to focus a lot on storytelling. We have to focus a lot on influencing problem solving because now the technology will solving our problems by providing reports, analyzing reports, all of that stuff. So it's all about influencing people, negotiating with people, coaching people, telling the right stories.
It's all about soft skills plus technology savvy. I believe the combination both will help us to be up to date and up to the speed with the new trend. - Nice. I love it. Technology serving soft skills, right? For some of the listeners that may scare you. Right? You may get like, man, I gotta get out there. I think those are great things to look forward to, right? You've gotta love technology.
You can't be an FP&A in the future, if you don't have those data mining skills, those sales skills, power BI, fill in the gap on what the solution would be. And definitely on the soft skills. I agree with you a hundred percent, right? But that's challenging a lot of people that say, you don't have to learn how to do a depreciation entry.
You have to learn how to build a relationship with a sales person or a marketing people. And that may scare some people. But I agree with you a hundred percent. Those are the bets, learn new technologies, make yourself and not just learning finance, accounting, FP&A technologies, go learn. That's one thing I love, is like I go learn all different kinds Of technology regardless of what space its in, alright? I love learning what industries are pushing technology in whatever areas that are even outside of my functional area that I do. So really appreciate that insights, and those continue transfer people to pick up as we continue to research out of this and continue to drive our businesses.
in closing, if people want to follow you, where can they find you? And if they want to have more information, what's your socials and where people can follow you? - Yeah, actually in Linkedin, I put all of my resources and articles over LinkedIn, and that's really the proper platform to reach out to me. - Awesome, awesome! Hey Mohamed, thanks so much for your time. Thanks for being a part of Collectiv Conversations.
Like I said, man, I found a lot of notes. I appreciate the conversation and dialogue. You can tell that you are a top notch subject matter expert that have lived and breathed through this stuff. So thank you so much for your time. Thank you for being part of the show, brother.
- Thanks so much, Chris, really It's a great pleasure. And looking forward to meeting you again. - Yeah. Thank you very much. (lively upbeat music)