We’re in a time of unprecedented change. To navigate this new normal, CFOs and finance teams need to lead their organizations through that change, harnessing it to thrive.
Applying an Agile framework to business planning can help. Inspired by Agile software development, Agile finance-led business planning promotes a frequent, well-informed and intentional reassessment of plans. Built on an iterative approach to planning, evolutionary development, early delivery and continual improvement, Agile finance-led business planning empowers strategic CFOs with a platform for adaptability that allows their organization to react quickly and intelligently to change.
Agile finance-led business planning should focus on four key values:
- Cross-functional teamwork over a siloed approach to planning
- An evolving plan over staying static
- Empowered teams over burdened individuals
- A growth mindset over fixed thinking
These values can help CFOs and their teams plan differently and grow smarter. And by aligning processes with clear company-wide objectives, the Agile framework empowers them to move their organizations confidently ahead. Consider, for instance, three process-led best practices that enable the Agile CFO to be proactive in adapting to change:
1. Welcome Change and Prepare for it with Scenario Modeling
Agile CFOs know that change will happen whether they want it to or not—so it’s best to welcome it and to be prepared. That means introducing forward-looking processes that allow them to harness that change, experiment and adapt accordingly. It also means they understand that at some point their plan will be wrong—but that having the right processes in place will let them pivot early as needs change.
It starts with scenario modeling. By allowing finance teams to test their assumptions and build a more robust future plan, scenario modeling provides powerful insights that enable quick decision making. It also provides finance teams with the foresight required to understand when their plan is on the wrong track. When done well, scenario modeling examines and tests the best variables and business drivers, combining company-wide key performance indicators (KPIs) to better understand the direct implications of adjustments to those variables.
2. Keep an Eye on the Horizon (and on Cash Flow)
Agile CFOs are proactive and agile in all of their finance-led planning processes. They regularly consider leading indicators to get a sense of changes on the horizon and what they might mean for their business. This means they’re modeling multiple scenarios in real time with known variables and forecasting weekly.
It also means they’re continuously assessing and managing their cash flow, ensuring their business has enough cash on hand to weather the changes underway. And that starts by examining all of the levers available to them—whether taking on additional credit or making tough decisions around headcount—and communicating that effectively to the rest of the team using dashboards, data and other visibility measures.
3. Find the Story Behind the Data—Through Agile Forecasting and More
To drive informed decision making for the entire organization, Agile CFOs become master storytellers, bringing together data from across the business to provide a holistic, easy-to-understand view of organizational performance. They know how to communicate change and how it will impact company-wide stakeholders now and in the future.
Agile forecasting helps them do that, enabling finance teams to identify key performance trends and modify their plans quickly based on an analysis of how those changes will influence their bottom line and the story that they’re telling. By forecasting on demand instead of tying it to a specific timeframe, agile forecasting ensures the most up-to-date story is always available. This helps them make reliable predictions of long-term business results that consider historical data as well as real-time actuals and drivers—letting CFOs and their teams adapt quickly, consistently and intelligently.
Processes like these, along with the people and technology to support them, set a foundation for Agile finance-led business planning, helping CFOs embrace change and navigate their organizations through it, now and in the future. Because one thing is certain: change is inevitable.
