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Organizational Agility: The Key To Predicting & Responding To Changing Market Trends

5 mins read

13 January 2023

Many FP&A businesses today are faced with severe risks because they continue to operate in the old-fashioned manner and are not equipped to fulfill the functions that the leadership requires of them.

Today’s business executives must be very operationally agile in order to anticipate and react to shifting market conditions as well as possible threats and opportunities. Business agility has become a crucial component of success for many, and they want the same of their support and advisory roles. Recent global developments have made it very evident that businesses must be able to quickly analyze new scenarios, change course, and adapt to new circumstances. The CFO’s function as a strategic advisor and keeper of value and long-term performance is crucial in these times of transition. Many Financial Planning & Analysis (FP&A) firms, however, are not (yet) capable of handling the job.

Business leaders need assistance from FP&A as they help to modify a business’ behavior and procedures to flourish in the “new normal”. Together, they can navigate through dynamic and occasionally uncharted waters by spotting potential risks and fresh possibilities early enough to still have time to respond wisely.

The Missing Link

A controlling department’s primary tasks should no longer be historical data analysis, financial report creation, annual planning, and forecasting. In order to uncover hidden value and identify potential dangers, FP&A is required to act as advisors in strategic decision-making by combining data from all areas of the firm.

To meet this expectation, FP&A units are embracing new technology, relocating to the cloud, automating procedures and reporting, or enhancing existing datasets—but these efforts are insufficient to change the role FP&A plays in the value generation and steering process. Instead, in order to optimize their investments in new technology and data, FP&A must completely redesign how they cooperate, manage, empower, and distribute insights. The adoption of business agility is the crucial component needed to connect digitization and business effect for FP&A.

Agility Adds Value

Businesses that deliver quickly and responsibly, innovate and disrupt, and continuously adjust their organizational structures and modes of cooperation are said to be agile in business. The military is one of the most cutting-edge industries for organizational agility. Despite their organizational scale and complexity, armed forces must mobilize resources quickly and effectively to counter ever-evolving physical and digital threats. A traditional chain-of-command culture and a standardized, process-driven strategy are ineffective in this situation. Instead, military officials support the idea of “agile and adaptable leadership,” in which trained soldiers make decisions on the spot to carry out the leadership’s mission.

CFOs and FP&A leaders can learn from the military’s approach to meet business leaders’ expectations for proactive, in-time, and cross-functional decision support despite how far distant it may appear from the day-to-day struggles of a financial controller. Additionally, implementing agility demands teams and leaders to embark on a transition journey, just like in the military. It will need dedication, patience, and guts to experiment with new approaches while continually learning how to work in an agile environment.

Achieving Agility In FP&A

The FP&A organization needs to concentrate on gaining skills in four crucial areas, with agile leadership and digital enablement as its cornerstones.

Business Partnership

Create relationships with company stakeholders that are strategic and value-driven in order to find opportunities, evaluate results, and make investment decisions. Many  CFOs are concerned that the finance function is reactive or that data and information sharing methods are not streamlined. CFOs also anticipate that they will still be concerned about these issues in 2023.

Business partners now have insights at their fingertips thanks to technology, and FP&A teams can model more, explore more possibilities, and evaluate potential effects in real time thanks to data and planning tools. Today, FP&A and the company can collaborate digitally or in person to make model changes in real time, see the anticipated results, and then recalibrate to make more accurate judgments. Utilizing an organization’s tribal knowledge from leadership to the front lines for integrated insights is essential today more than ever to achieve agility and respond without being reactionary.

Being A Learning Organization

Many FP&A companies would accurately describe themselves as learning companies. The capacity to switch from a focus on outputs to a focus on outcomes, however, is essential for continuing success as a trusted business advisor. This process is regularly assessing the results of ongoing investments and activities to decide whether to move forward as is, make adjustments, or take a different turn.

Due to the rapid change in the business environment, everyone inside the organization must develop their talents collectively. For instance, in order to advocate the best course of action, businessmen must have a better understanding of the benefits and limitations of technology, and IT professionals must comprehend business processes and desired results. Although it might seem obvious, this calls for an experimental mindset.

Modern Management

An agile FP&A team works with the front line and runs like a “small business” with a focus on a particular result. It determines the talents required (perhaps even a combination of internal and external personnel), gives the team autonomy over choices, secures internal finance, and outlines what it will undertake to accomplish the goal.

For instance, if a company wishes to enhance planning, it may allow teams to work freely within a set of concrete, quantifiable, and strategic objectives. An enormous, international firm that did this by using an inefficient, expensive, and time-consuming annual planning procedure. The organization decreased the time and effort spent on planning from a “all year round” process to a few weeks by radically rethinking the planning methodology, implementing the most recent planning technology, and experimenting with agile approaches (such as sprints).


The FP&A team must work together and draw on knowledge from several departments inside the company. A successful team is self-organized around a goal, given the freedom to decide, and laser-focused on value while using the least amount of effort possible. Collaboration teams assemble the ideal individuals for a predetermined period of time with the sole purpose of completing the task at hand—no long-term commitments. An agile team can quickly disassemble after resolving the business issue or producing the desired outcomes and move to the next location. In a hurried timeframe, FP&A and other business associates can collaborate as a cross-functional team.

Many FP&A businesses today are faced with severe risks because they continue to operate in the old-fashioned manner and are not equipped to fulfill the functions that the leadership requires of them. To direct the company strategically and adapt to shifting market conditions, business leaders constantly strive for quick, proactive, and analytics-driven decision assistance on their side. The introduction of technology by itself hasn’t been sufficient for FP&A to evolve into this position of an “intelligent business partner.”

The availability of data, performance transparency, and automation made possible by new technology are positive developments, but they do not, by themselves, enable teams to rethink how they work, cooperate to generate cross-functional insights, or partner for results. Incorporating agile principles into daily activities and introducing new working methods made possible by new tools and technologies will elevate FP&A’s position and multiply its influence in providing genuine value for the company. The CFO is in a crucial position to drive this FP&A transformation by challenging the established quo, encouraging employees to think creatively, eschewing conventional methods, and adopting an agile attitude.

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