Creativity in Finance

I chanced upon an FP&A site through LinkedIn. It looks like an interesting site and I will try to remember to go back every now and then. The site is fpa-trends.com. The topic about advanced data analytics caught my eye but the one the really pulled me in is the post about the ideal FP&A professional.

In a nutshell, here are their brief recommendations, pretty much copied verbatim:

1. Commercial curiosity and business acumen to spot growth opportunities.
2. Strong leadership.
3. Must be a good interpreter of data with an ability to see the big picture cross departmentally.
4. Good communication and stakeholder management.
5. Possess an understanding of technology and how it can help deliver effective forward planning and analysis to support the everyday running of an FP&A team  or function, with automation frequently freeing up time for the all-important analysis.
6. Creativity: this is a paramount skill. Analytical and numbers-based finance skills are prerequisite but the ability to be creative and to be able to map out and communicate future plans and to identify new growth opportunities is what separates an FP&A professional from a general finance or accounting professional. Personality types need to thrive on new ideas and creative thinking, rather than just number crunching.

This is pretty much a grab bag of wish list of what companies want in most candidates: all companies want business acumen, all companies want leadership, all companies want capability with numbers and data, all companies want communication skills, all companies want ease with technology and all companies want creativity/innovation.

But, it is still useful. Now, I could have been working in the wrong place or job, but typically, in the corporate finance world, I don’t see a whole lot of curiosity (I’m saying typically, not everybody) as accountants/finance just do what has always been done. I’ve seen strong leadership but doing the wrong things or too focused on the bottom line. Financial types tend to be small picture as they just focus just on their duties – they don’t join other department’s meetings. It’s working with all of those numbers that make them focus on the trees rather than on the forest. Financial types understand how to use Excel but curiously enough, their understanding does not extend beyond summing and vlookups but surprisingly, there are a lot of financial professionals who don’t know how to use pivot tables. Most don’t know how to automate their work.

And then there is creativity. This was the longest bullet point in their recommendations.

Now, the fpa-trends are not talking about the bad kind of creativity which leads to creative accounting. They are talking about, I think, the creativity to pull together data to spot trends or to perform ad-hoc analysis. And I’m all for that. It’s what I have been trying to do the last ten years. But let’s make this creativity in service of another idea: rethinking what capitalism should be. Right now, most finance types march to the drum of shareholder value which leads to strict bottom line thinking. To really think out of the box and be creative, you need to change the focus from shareholders to … what? That is something for the finance types to decide. My take is the general community, the people as a whole, not just the shareholders. The current shareholder mindset has led to: Exxon-Mobil hiding the climate change results that they knew about for the last 30 years, “pharma bro” Shkreli hiking up drug prices 5000%, the Great Recession, the Volkswagen emission scandal, and so on.

I don’t know who the shareholders are but somehow, I’m getting the impression that shareholders are not the average worker. If the wealthy 1% have been improving their wealth for the last 30 years while average workers ‘ income flatlined and if the wealthy 1% would feel the bulk of the pain on increased taxation on capital gains (which sounds to me like stocks), then I’m getting the picture that shareholders are mostly the 1%. Some shareholders are the average workers but they do not seem to get the benefits – the benefits seem to flow to the wealthy 1% and the corporate chieftains.

So if you want to be creative, let’s be creative and redefine capitalism so that it benefits all, not the already wealthy. For the sake of the future of democracy (the current election cycle should scare you – Donald Trump is in the lead on the Republican side? And Bernie Sanders with his expensive ideas (although, those ideas are attractive to me)?

And I don’t like the word stakeholders because it sounds too much like shareholders. We’ve been using stakeholders for a while but nothing has changed from the focus on the bottom line and shareholders.