How do you go about finding the perfect candidate for your FP&A team? Start by asking these questions.
Congratulations — your business is growing well, and you need help understanding the levers of the business and supporting the executive team to make smart, cross-functionally aligned decisions on how to keep the growth going.
This is where a great financial analyst can help you. But how do you find one? What should you look for? How can you make sure you’re hiring someone who can uncover valuable insights for your company?
Start with the end in mind: you want someone who naturally thinks about the business, and the future of the business—not just the financials. Someone less obsessed with reporting the past and assembling financial statements (those are table stakes) than with advising the CEO, Board, and functional leaders on the choices and tradeoffs that can help them run the business better.
In short, you want a strategic finance person. In a previous blog, we defined strategic finance as “a way to turn what’s traditionally been a siloed set of processes and functions into a unified, integrated view of your financial performance that takes the entire organization’s perspective into consideration.”
The most talented FP&A pros are masters. They:
If your aim is to find someone who can truly make a difference and guide the actions that can help your company thrive, here are 4 questions you should focus on in your hiring process.
This question gets at both technical and political navigation skills. Technically, you’re asking candidates about improving the flow of data and setting up processes to better support collaboration. And on the political side, you’re asking about how successfully they work with stakeholders.
Being able to prepare role-tailored reports is a rare skill because it requires understanding differing perspectives and priorities. A CEO generally wants to avoid drilling down into the numbers at a granular level. They want to understand if a slowdown in revenue is a sales execution, pipeline, product, or customer success issue (or a combination). They’d likely want to see the size of the pipeline, close rates and time, product usage data, and NPS scores. Then they need to compare potential solutions (hire more reps, invest more in marketing, improve the product), weigh tradeoffs, and consider how to manage and message any changes required.
A sales leader needs to go a few levels deeper to understand if and how sales execution is related to the slow-down, so they can weigh solutions and tradeoffs and make the appropriate recommendations and tradeoffs. It might be a performance issue with certain sales people or managers, or an enablement issue, or simply a staffing ramp that’s behind plan. So the sales leader would want to look at quota attainment and pipeline by rep or manager, look for unusual leaks in the funnel that indicate enablement issues, and the staffing ramp compared to the plan.
Each leader needs very different metrics, visualizations, and analysis from the FP&A leader to help them diagnose the problem and solve it.
To establish their ability to digest data and generate insights for different audiences, ask the candidate about the factors they’d consider when preparing reports. They should mention some of the following points:
A strategic finance partner understands that the knowledge levels of different audiences can vary. They should know when to avoid being too technical or using acronyms, abbreviations, or terminology that would only be understood by the finance team. And they should be able to articulate these answers with specific examples, not just generalities.
After all, it’s all about their ability to understand how key stakeholders within the company think, and adapt their narrative accordingly. They need to be adept at layered reporting to tailor the level of detail in their reports based on listeners’ needs.
This question is looking for more than a surface-level response—a candidate’s choice of spreadsheet isn’t a key consideration unless you have an immovable corporate mandate for one or the other.
While you want your FP&A staff to be great at using Excel or Google Sheets, both of these tools require manual data input, can lead to single-person dependency, and create many other problems. The best FP&A professionals should spend most of their time looking at how to discover untapped insights and find key connections between different sources of information.
Manual data entry, checking, and copy/pasting data from multiple sources is a waste of their time and talent. It shifts their focus away from forward-facing analysis and flagging issues ahead of time. If they’re spending 50-70 percent of their time checking data validity, normalizing data, correcting errors, updating the model with the latest CRM or accounting actuals, they aren’t serving your strategic needs. They aren’t doing forward-looking analysis and flagging issues ahead of time. With the right FP&A software, on the other hand, these time-consuming tasks are automated, more accurate, and much faster, so they can get back to activities that truly make a difference.
Additionally, some modern-day FP&A solutions often use the same syntax as Google Sheets and Excel, minimizing the learning curve for every user.
When asking this question, you’re really asking about what the candidate focuses most of their time on: organizing historical data manually or using that data and other automated sources of information to come to relevant conclusions.
Use a question like this to test the candidate’s ability to think of different scenarios. If they’ve done some research on your company and your market and have the necessary experience, their answer will factor in a broad business perspective. If not, you’ll get a more straightforward financially-oriented answer.
A purely financial answer might sound like this:
If we raise the price by 50 percent, our revenue per user will increase 50 percent, of course, but some customers will reduce the number of seats they buy, and some customers will opt out entirely, so our revenue will grow by 10 or 20 percent.
A much savvier answer would sound more like:
If we raise the price by 50 percent, we’ll be targeting a different type of customer, or at least a different buyer persona. This would have impacts across the board. In marketing, we’d probably need to revisit our marketing plan and should expect a smaller target buying group that costs more and takes longer to reach, educate, and attract. In sales, we should expect longer sales cycles and we might need to change the profile of reps we hire. We’ll have fewer larger deals, so the risk of lumpier revenue is something we need to be prepared for.
With larger customers, we’ll also have more complex buying requirements, so we’ll probably need a larger and more technical sales consulting team. Implementations will also take longer, and our ratio of customer success staff to customers will probably need to come down. There may also be product implications we need to factor into our roadmap to serve this different customer population.
So the upshot of a change like this is that we would increase revenue per user by 50 percent for new customers. But some customers will reduce the number of seats they buy; some prospects we’d have closed at our current price will opt out; and some of our happy existing customers will churn at a higher rate than we’d currently expect. All told, our revenue might only grow 10 or 20 percent, and also take longer to come in because of the longer marketing and sales cycles.
On the cost side, we’ll have higher costs across the board in go-to-market (and possibly product and engineering), so we have to model all of this together and consider if it’s worth making such a change, and if we can also do it more gradually to prevent a shock to the whole organization.
The second response provides a window into how the candidate might model out all the implications of a change, who they’d want to engage with across the organization, and also their willingness to push back when their analysis of an executive’s proposed idea doesn’t pencil out.
You can also follow up a question like this, especially if you get a rich, nuanced answer like the one above, with an even tougher question:
Ok so that might not be the panacea we hoped, but we do have very aggressive growth targets. What else should we consider?
A savvy candidate could then walk you through several other options, with a similar logical flow. For example, they might consider hiring a larger sales team, making product changes to speed up onboarding and increase upsell opportunities, and expanding to new geographies.
The value of great FP&A staff is that they can think of various “what ifs”, make conclusions and recommendations based on them that factor in the relationships between key operational and financial drivers in your business, so you can choose the right path to thrive.
To create the most talented FP&A team, focus on the most forward-looking, communicative people ready to challenge the status quo.
Many finance folks have the mindset that their job is to report on the weather in the past.
The better ones can tell you if it’s sunny outside, and the best will tell you what to wear tomorrow given their expected forecast. They understand the data and the business well enough to anticipate what may happen and advise the business on the appropriate actions.
Good luck on your search!
Ed note: Want to dive deeper into essential FP&A topics? Check out OnPlan’s most popular posts of all time here:
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