Getting behind the steering wheel

Prof. dr. Tjeu Blommaert

Are financial departments able to truly understand the challenges that business leaders face today? What do business leaders really want from their financial department?

Research executed by Deloitte found that not only the usual answers like control, risk management, efficiency and confidence but also factors like personality and physical distance were considered to be crucial.

Business Intelligence Research from Cambridge University found that “up to 50 percent of managers place no confidence in the numbers presented to them” (2009).

Here lies a great opportunity to improve the performance of financial departments and to make those departments adopt the business partner role which may strengthen the confidence put in them by others.

An interview with Prof. dr. Tjeu Blommaert

Financial departments should transform into an advising financial business partner role

Prof. dr. Tjeu Blommaert stresses the necessity for financial departments to claim their role as business partner within the organisation: “It’s all about the need to adapt to changing global business needs. Financials nowadays need to know about and understand the existing business pressures across the whole organisation. On the one hand improving efficiency in the finance function and on the other hand transforming finance & control staff into an advising financial business partner role. Finance departments can add subsequent value to their organisation by improving the quality of decision making and making sure that the chosen decision delivers the highest financial value at an acceptable level of risk.  An organisation would be foolish not to transform its financial department if this leads to an increased competitive position. Because as Jack Welch indicated ‘if you don’t have a competitive position, you better do not compete’.”

 

Sharing knowledge requires additional skills

What are the additional skills that the ‘new’ financial should possess?  According to Blommaert, the business partner role is much broader then the classical finance functions: “It’s much more a two-way relationship, a collaborative culture, based on sharing knowledge. More diverse skills are required, mainly on the soft side. Financials need to understand their organisation and the whole business they are in, starting from how their products are being produced to how they are distributed.  Business partners engage with a variety of stakeholders across the organisation, which requires strong leadership, influence and communication skills. Being able to explain financial information in laymen terms to support decision making throughout the business. The ability to execute new strategies and make changes across the business to remain competitive in the market is another strength necessary to fulfill the business partner role most optimally”.

 

Paradox

The recent history of corporate fraud scandals has forced the finance function to become a more independent discipline, by mandates like Sarbanes-Oxley. This seems to be a paradox in terms of claiming a business partner role as well. Blommaert favours the ambidextrous approach, reaching both requirements and finding a good balance between them. Research by Davis and McLaughlin (2009) also found that 85% of interviewed CFOs didn’t think there was conflict between both.

 

Towards a shared vision within the organisation

The necessary qualities of financial staff in this new role together with embedding the new role within the organisation requires quite a change within the organisation. A shared vision of the business partner role throughout the whole organisation should be the starting point, according to Tjeu Blommaert: “Communication, awareness, processes, information infrastructure, training and developing of people are a next step to effective partnering”.

 

In order to make financials aware of the need for change, Maastricht University School of Business and Economics has developed a Dutch open executive programme entitled ‘Finance als Business Partner’. Prof. Dr. Tjeu Blommaert is academic director of the programme.

Start date: 22 September 2011
More information can be found here.

 

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