Strategic Planning For FP&A: What Is It? What is FP&A’s Role?

Q2 is when many companies kick off strategic planning, and this process is one of the best opportunities for FP&A to help drive impact. The stakes are high, as bad decisions or lack of action could hurt the company’s growth or focus.

Over a series of posts, I’m going to share what I have learned about strategic planning from the FP&A side.


What is strategic planning?

Strategic planning is setting and executing the strategy.

In smaller companies, this process might be limited to developing a long-term financial model or addressing key strategic questions.

However, in the broadest terms, strategic planning can include the following:

– Raising the most important strategic questions
– Analyzing internal and external data, refining financial models and seeking input from key stakeholders
– Seeking alignment around plans and resource allocations
– Creating systems and processes to track progress, and course correct if necessary
– Documenting the output and communicating to a larger audience

While this is a tidy list, the reality is that this process is often messy and non-linear.


Where to start?

If you are in FP&A and you are tasked with strategic planning, start by understanding the strategic conversations that are already happening. Don’t assume that you need to reinvent the wheel. Take inventory of the analyses and processes that are already happening, such as:

– Corporate mission / vision
– Corporate / team / personal objectives
– Market / competitive analyses
– Current financial model and monthly review of financial results
– Budgeting process and capacity planning
– Operating reviews
– Corporate KPIs and/or OKRs

I find it helpful to list everything happening on one page, and importantly how everything fits together and the sequencing.

Then, you can decide how to proceed with strategic planning, and whether a new process is needed, or you can create cohesion out of the work already being done.


What is FP&A’s role?

From a tactical FP&A standpoint, strategic planning is needed to help set the stage for the budgeting process and to build out the long-term financial model.

More importantly, this is an opportunity to surface and address the most important strategic issues facing the company. FP&A should own the integrity of the analyses, and make sure that the most important decisions are made and made thoughtfully.

The budget process is one way to make sure that the strategic plan is implemented, by allocating resources to the top strategic priorities. But this is just one part of the puzzle.

FP&A also needs to partner with others across the org to make sure that the strategy translates into operational plans with accountability owners, and that the right data is selected and reviewed for progress / potential course correction throughout the year.


What’s next?

In my next post, I’m going to talk through some of the roles that are needed for successful strategic planning.