Navigating cross-functional collaboration as an FP&A lead

As the Head of FP&A, I’ve spent a lot of time thinking about how we can better connect the dots between cross-functional teams and upper management.

In my experience, it’s easy for FP&A teams to get siloed, treated as mere number crunchers rather than the strategic partners we can and should be.

However, our role is crucial in bridging the gap between what happens on the ground and what the executives see and decide in the boardroom. In this article, we'll explore the challenges and strategies with collaboration as an FP&A Lead and the importance of aligning incentives with business goals.

Read on to discover:

The reality of FP&A in organizational structures

In most organizations, FP&A often sits on the periphery of business operations. We’re expected to be the "air traffic controllers." Yet, in many instances, we find ourselves more as spectators, analyzing data from the sidelines rather than being central to decision-making processes.

This peripheral positioning can be a significant challenge. I’ve seen firsthand how this structure can limit our ability to contribute strategically. The reality is that FP&A teams are often underutilized, not because of a lack of skill or insight, but because of a disconnect in how we’re integrated into the business.

The key to overcoming this is increasing our interaction with different business units, establishing ourselves as trusted partners rather than just another cog in the corporate machine.

One way I’ve approached this is by actively seeking out opportunities to collaborate with other departments. Whether it’s sitting in on marketing strategy meetings or getting involved in product development discussions, the more we understand the challenges and goals of other teams, the more effectively we can contribute.

This kind of cross-functional collaboration is essential for an FP&A Lead who wants to be more than just a financial analyst.

Motivating the organization – beyond data handling

In FP&A, our day-to-day is often dominated by data—collecting it, analyzing it, reporting it. But one of the biggest lessons I’ve learned is that motivation can’t come from data alone.

It’s about connecting that data to something bigger, something that resonates with the broader goals of the company and the people working within it.

When I think about motivation, I’m reminded of the many theories out there, like Maslow's hierarchy of needs. Now, while Maslow offers some interesting insights, I’ve found that it’s not always directly applicable in our field. The reality is that most of us in FP&A are already well beyond the basic needs—our focus is on achieving our full potential and helping others do the same.

That’s where I believe our role can really shine. As FP&A Leads, we have the ability to inspire others by showing how their work contributes to the overall success of the company. It’s about making that connection between what might seem like mundane tasks and the larger picture. This is especially important when working with cross-functional teams who may not immediately see how their day-to-day impacts the company's financial health.

Practical application:

Budgeting and forecasting: It’s not just about getting the numbers right.
Marketing team’s spend: How does it influence our revenue projections?
Product development’s timeline: How does it affect our cash flow?

By making these connections clear, we can help motivate other teams to align their goals with the company’s financial objectives.

Herzberg’s two-factor theory and its application

One theory that I’ve found particularly useful in FP&A is Herzberg’s two-factor theory, which distinguishes between hygiene factors (things that can cause dissatisfaction if missing but don’t necessarily motivate when present) and motivators (factors that genuinely drive engagement and satisfaction).

In the context of FP&A and cross-functional collaboration, hygiene factors might include things like having the right tools and systems in place.

These are essential, of course, but they’re not going to motivate anyone on their own. What really drives people, I’ve found, are the motivators—things like recognition, a sense of achievement, and the opportunity for advancement.

Practical example:

When working on a major financial report that involves input from multiple teams, it’s easy to fall into the trap of just gathering the data and moving on.
Instead, take time to recognize the efforts of those who contributed. A simple shoutout in a meeting or a note of thanks can go a long way.

These small acts of recognition can be incredibly powerful motivators, especially in cross-functional settings where it’s easy for contributions to go unnoticed.

Moreover, providing opportunities for growth is crucial. In FP&A, we have a unique vantage point—we see the whole business, and this gives us the ability to help others understand how their work fits into the bigger picture. By mentoring others or offering insights that help them advance in their roles, we not only build stronger relationships but also create a more motivated and engaged workforce.

Aligning financial incentives with business goals

One of the most challenging aspects of being an FP&A Lead is aligning the financial goals of the business with the motivations of the people who make up the business. This often comes down to designing effective compensation and incentive plans.

In my experience, there’s often a disconnect between the financial goals set by the business owners or board and the operational goals of management. This is particularly true in situations like private equity deals, where the focus is heavily on EBITDA or revenue growth.

However, if the incentive structures aren’t aligned, you end up with a situation where teams might be working at cross purposes.

Common misalignments:

Sales vs. profitability: Sales teams may be incentivized on revenue, which could drive them to close unprofitable deals.
Cost-cutting vs. quality: Operations may focus on cutting costs, potentially harming product quality or customer experience.

As FP&A Leads, it’s our job to find that balance, ensuring that everyone is pulling in the same direction.

To achieve this, I’ve found that it’s essential to involve FP&A in the design of compensation plans from the outset. This way, we can help ensure that the incentives are aligned with the broader business goals.

For instance, in a SaaS company, we might structure sales commissions not just on total contract value, but also on metrics like customer retention or net revenue retention. This aligns the sales team’s incentives with the long-term health of the business.

Designing effective commission structures

When it comes to commission structures, simplicity and transparency are key. I’ve worked with various sales teams over the years, and one thing that’s become clear is that if a commission plan is too complex or not clearly communicated, it can lead to confusion, frustration, and even mistrust.

The commission plans best practices include:

Simplicity: Ensure the plan is easy to understand and directly tied to business objectives.
Transparency: Openly communicate how efforts translate into earnings, building trust and alignment.
Continuous Review: Regularly assess and adjust the plan to ensure it continues to drive the desired behaviors.

A good commission plan should be easy to understand and directly tied to the business’s key objectives. In one case, we redesigned a commission structure to be more closely aligned with EBITDA targets. We moved away from a pure revenue-based commission to one that also took into account the profitability of the deals being closed.

This not only encouraged the sales team to focus on high-quality deals but also helped the company hit its profitability targets more consistently.

Another critical aspect is communication. When we rolled out the new commission plan, we made sure to have open forums where salespeople could ask questions and understand exactly how their efforts would translate into earnings. This transparency helped build trust and ensured that everyone was on the same page.

However, it’s also important to recognize that no commission structure is perfect. There will always be unintended consequences or areas that need adjustment. As FP&A Leads, we need to be vigilant, constantly reviewing these plans and making tweaks where necessary to ensure they continue to drive the right behaviors.

Conclusion: becoming a strategic FP&A Lead

As an FP&A Lead, managing the links between cross-functional teams and upper management is both a challenge and an opportunity. It’s about more than just numbers - it’s about understanding the business, building relationships, and driving alignment across the organization.

Key takeaways:

Proactive cross-functional collaboration: Seek out opportunities to engage with other departments and establish FP&A as a strategic partner.
Motivation beyond data: Connect data to broader goals, recognize contributions, and use motivators to drive engagement.
Align incentives with goals: Ensure compensation plans are simple, transparent, and aligned with the company’s long-term objectives.

[This article is based on a presentation given by Tim Page - Head of FP&A at Ex-Capital Economics, at our FP&A Summit, Boston, in 2023. Catch up with this presentation, and others, using our OnDemand service. For more exclusive content, visit your membership dashboard.]

Navigating cross-functional collaboration as an FP&A Lead