Over the past decade, the role of financial controllers has been increasingly shifting to business partnering. In our workshop in Warsaw at the Financial Controlling Summit 2017, we reflected on the concept of business partnering, discussed some practical implications for financial specialists and unfolded the ways and mechanisms that enable controllers to deliver rational judgements to the management.
We started by asking what makes controllers suitable as business partners? The responds have proven that traditional number-related functions are shifting to support managerial decision-making on a wide range of issues, including risk management, strategy and business development, future investments etc. It turns out that every day controllers are forced to make decisions between options that differ in a specific way: do we handle as usual or advise the management about new options? Intuitively most of us understand that business as usual may not always be the optimal choice but tend to exploit well-known paths instead of using financial insights to explore fresh alternatives.
So, what makes financial controllers suitable as business partners?
First, they are independent from many strategic business decisions, even though they support these decisions with analytics, insights, and data.
Second, they know the company from inside - its past, present and its expected performance. Finally, while making judgement they apply professional scepticism and tend to question the proposed alternatives, estimations or assumptions. That is why their expertise can enable qualified decision-making on the top level.
Still, although the numbers are correct sometimes decisions fail. Why does it happen? Some failures that accompany finance-sensitive areas have a psychological origin. It is heuristics and behavioral biases that may threaten the quality of management decisions, budgeting and estimations.
In an interactive exercise session our guests had to make decisions under uncertainty, time pressure and with lacking information. We showed how misleading our perception and stereotypes can be, how strongly they can affect our choice, how far from reality we land if we rely on heuristics.
We resumed by discussing the general countermeasures, specific tools and techniques that financial controllers can implement to mitigate the negative effect of biases.
The Financial Controlling Summit 2017 is an event offering financial experts a good platform for experience exchange. We appreciate Rzeczpospolita for their invitation to support the conference.