How to increase cross-departmental engagement in your planning process

You want full business partner participation in planning, budgeting, and forecasting but you struggle to engage other departments in the process. Does this sound familiar?

We thought so.

According to an Adaptive Insights CFO survey, nearly 50% of CFOs cited the inability to align with other departments on key metrics as a top issue, while 70% said improving collaboration with other parts of the business was a top priority for the upcoming year.

Here are five tips to spark cross-functional engagement and build confidence in the financial planning process.

1. Define your strategy—and then align your financial plan

In an often-cited Harvard Business Review article, “The Big Lie of Strategic Planning,” well-known business strategist Roger Martin argues that putting the words “strategic” and “plan” together only leads to both being ineffective.

Rather, he says strategy should focus solely on how to most effectively generate revenue or achieve the company’s highest priorities. Once a clear strategy is established, then the annual financial planning process takes on the now-relevant role of assessing the costs and resources required to best achieve those goals.

Not only does this approach provide more clarity, but it also ultimately aligns budgeting and planning with the revenue-generating or high-priority goals of the organisation.

Finance can take a step toward this culture shift by playing a leadership role in encouraging development of a coherent strategy so financial planning becomes more relevant and connected to top priorities. This sets up finance for more productive conversations with business leaders as functional plans align to the corporate strategy.

2. Take a rolling approach

Why put time and effort into an “annual plan” that will largely be outdated and irrelevant by the end of the first quarter? That’s the thinking of many business line leaders. The reality is that the pace of change today is such that locking in a plan for an entire year often only assures cynicism from those enlisted to help create it.

There is a better way. 

Rolling forecasts occur on a regular cadence instead of being once-a-year exercises. Unlike budgets bogged down with hundreds of line items, rolling budgets focus on key business drivers. Rolling forecasts are forward-looking and can act as an early warning system when you’ve drifted off course, so you can quickly adjust the levers that drive performance.

Get 5 tips to implementing a successful rolling forecast

3. Increase transparency and visibility

If you only reach out to business leaders in November each year and they don’t hear from you again, it’s little wonder that they become skeptical and cynical about the process. Successful financial planning requires engagement throughout the year, and an essential way to encourage that is by providing greater real-time visibility into analytics, trends, and results.

Finance can leverage new technology solutions that offer a dynamic 360-degree of the business and feature dashboards that can provide a full spectrum of customised data and insights in real time.

When the tired, dust-collecting budget in a binder transforms into a dynamic electronic window into the organisation, your business partners are bound to become more engaged in the process in a meaningful and ongoing way.

4. Go beyond the usual suspects

Once a more dynamic rolling plan emerges, there is significant opportunity to dig deeper into the organisation to more clearly identify key drivers of results and revenues—as well as issues and programs that are elevating costs. A key way to deepen engagement and get more relevant data and insights is to tap the knowledge and expertise of those who are closer to the front lines of the business or operation.

Work with business leaders to identify the people on their teams who have hands-on insight into the challenges and opportunities they deal with every day.

5. Communicate early and often

As with just about any major business initiative, communication is the key to driving long-term engagement and results. Adopt an approach that ensures communication touch points throughout the year to encourage input and refine processes and workflows. As engagement deepens, more on-the-fly communications and connections should emerge.

By evolving your process from a dreaded once-a-year event to an ongoing conversation about the business and how to get the best results, you will build relationships and trust that assure a more relevant plan emerges.

No doubt, these changes won’t happen overnight. Yet by systematically developing a new, more dynamic, and flexible approach to annual planning, you will get deeper engagement, more timely information and insights, and better results.

Looking to drive deeper engagement in the planning process? The more you can modernise your process and increase visibility across the company, the more others will think of "our numbers" instead of "finance's numbers". Discover budgeting and planning solutions that can help you improve cross-team collaboration.

This blog was originally published by Adaptive Insights and updated.

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