Transitioning to a Director Role in FP&A: Key Skills & Strategies

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A director-level role is a significant milestone in any career. This role carries considerable responsibilities and a broader scope that extends beyond the realm of finance and into the strategic operations of the organization. As a director leading an FP&A team, you're expected to be an expert in financial management and a strategic leader who can drive business performance and growth. 

The transition from a manager to a director-level role can be exciting and challenging. It entails a shift in responsibilities and a transformation in mindset, and navigating this transition successfully requires honing the skills and leadership qualities necessary for the entire team's success.

Understanding the director-level role in FP&A

FP&A directors are typically in charge of guiding financial planning, conducting comprehensive financial analysis, and generating insights to inform strategic decision-making. Where manager-level roles focus on running day-to-day operations, director-level roles tend to be more strategic and leadership-focused.

Directors must guide their teams effectively, make critical decisions, and drive financial performance across the organization. As a director, your influence will extend beyond your team, affecting the broader organization's strategic and financial trajectory. You’ll also be responsible for your team members' professional growth and leadership, tasked with mentoring your team and providing opportunities for skill development.

Typically, the daily responsibilities for a director may include:

  • Overseeing recurring FP&A functions. FP&A directors oversee recurring operations such as month-end processes, budget versus actuals analysis (BvAs), re-forecasts (typically conducted quarterly), and strategic planning. While manager-level employees may run these sessions and report on results, directors will be pulled in if a problem arises or additional explanations are needed. 
  • Presenting financial results. FP&A directors play a critical role in presenting financial results or analytical findings to executives and other key business stakeholders. They guide and review the creation of presentation materials, ensuring accuracy and clarity in charts, tables, and other visuals. Essentially, directors of FP&A provide a clear narrative to other finance leaders who will present the findings. They co-own the narrative with their team and business partners.
  • Driving the creation of the annual or long-range plan. During the latter half of the fiscal year, the FP&A director spearheads the creation of the annual or long-range plan. While the director’s team usually works more directly with budget owners, the director will provide oversight and leadership, ensuring their inputs are included and that they are committed to and sign off on their respective numbers. 
  • Contributing to broader company decisions. Beyond specific FP&A duties, the director often has a seat at the table for broader strategic and operational decisions. They need to be able to leverage their financial acumen to determine what types of analyses should be performed by their team to support informed decision-making. The role in this respect is less about hands-on work with spreadsheets and powerpoints and more about strategic guidance, utilizing past experiences and precedent.
  • Supporting their teams. An often overlooked aspect of an FP&A Director's role is the day-to-day management of their team beyond finance-related duties. This includes setting team and individual objectives and key results (OKRs), conducting performance reviews and check-ins, facilitating career development discussions, providing mentorship, and tracking those team objectives and performance indicators. This ensures the overall well-being and growth of team members.

Key skills and competencies for director-level roles

While managers are typically focused on executing plans and meeting goals, leaders are visionaries who influence and inspire their teams to achieve strategic objectives. Leaders take a broader view, considering the business's long-term success and their team members' development. Great FP&A directors establish themselves as catalysts of company strategy and operations, relying on insights and analysis from their teams and years of experience. Transitioning from a manager to a director-level role requires developing and mastering critical soft skills beyond technical financial expertise.

The ability to understand the business and think strategically is a critical prerequisite. While an FP&A director must demonstrate a high level of financial acumen, including proficiency in financial systems and tools and strong analytical abilities to translate complex data into actionable insights, equally important is business acumen. Directors are expected to have an opinion about the future and give guidance according to their expertise. Because businesses are interconnected and don’t exist in a vacuum, it’s important to understand the product, the business, and the people behind them before providing that guidance. This includes an ever-more-sophisticated understanding of the product, the operations and revenue-driving opportunities, customer support and engagement,  the company's business model, industry dynamics, and the impact of market trends on financial performance. The time spent getting to understand these aspects is well spent — not only does this give a better understanding of which strategic initiatives are worth the investment, but these interactions also build goodwill.

The ability to influence stakeholders, from team members to top management, is important. Because Finance is often perceived as the gatekeeper that teams try to circumvent, finance directors need to do more than just enforce rules and policies. Instead of creating cumbersome rules and barriers that can cause bureaucracy and distrust, they should prioritize clear communication, relationship building, and guiding business stakeholders into making the right decisions. This entails concise and direct guidelines, making the process easy to understand through documentation and videos, and automating processes so finance teams only need to deal with exceptions. By embracing these soft skills to help facilitate a seamless journey for business stakeholders, finance directors can foster trust and collaboration and actively contribute to faster business decisions.

Strong management soft skills are essential for team morale, mentorship, and fostering a robust FP&A team culture. The best leaders understand the significance of maintaining high team morale, as it directly impacts productivity, engagement, and the quality of the team’s output. They proactively create a positive work environment by recognizing and appreciating team members' contributions, practicing empathetic listening, providing regular feedback and support, and promoting a sense of camaraderie. 

They should act as a resource for team members to turn to as an “unblocker,” an advocate for their ideas, and a guide to ensure alignment with company objectives. These FP&A leaders excel in mentorship, guiding and developing their team members to reach their full potential. This can’t only happen during performance reviews. Strong leaders make it a consistent and ongoing practice to invest time in coaching and providing constructive guidance, fostering their employees' professional growth, and cultivating a culture of learning. These leaders prioritize the creation of a strong team culture, fostering collaboration, trust, and open communication. They encourage diverse perspectives, promote teamwork, and establish shared goals, resulting in a cohesive and high-performing FP&A team.

How to gain relevant experience and exposure

Your prior experience in financial planning, budgeting, forecasting, and strategic analysis will be instrumental in achieving a director role. The ability to leverage these skills to drive strategic financial decisions, improve business performance, and guide the company's financial future will set you apart. 

Start by building a solid career foundation in FP&A and gaining exposure to cross-functional teams. Diverse experience provides a broader understanding of the business, and working with cross-functional teams helps you understand the interconnectedness of business operations and the impact of financial decisions on various aspects of the company.

Leading high-impact projects and initiatives provides valuable experience and exposure. It allows you to demonstrate your leadership and project management skills, showcase your ability to drive results and gain organizational visibility. These experiences can pave the way for your transition to a director role, helping you develop a general management mindset.

A few ways to build knowledge and experience could be:

  • Stay informed about market trends, regulatory changes, and emerging technologies, such as modern FP&A software solutions for reporting and planning.
  • Seek out new ways to partner cross-functionally.
  • Try to understand broader business contexts, including company vision, goals, and growth objectives.
  • Volunteer to lead cross-functional projects or put together a presentation for stakeholders.
  • Engage in professional development activities like attending conferences, earning certificates, or joining networking groups.
  • Find a mentor in your field who can share their experiences, provide insight into the challenges and opportunities, and offer advice on navigating your career path.
  • Stay on top of industry dynamics and relevant technology.
  • Seek regular feedback from your current leadership and peers.

Take the leap: the transition from manager to director

Transitioning from a managerial role to a director's position is a significant leap, and it's about more than just accepting new responsibilities. It's about shifting your mindset and broadening your vision to encompass strategic, organization-wide perspectives. As a manager looking to advance in their career, don't shy away from opportunities that challenge you and push you out of your comfort zone. Take initiatives to understand and contribute to strategic planning and decision-making processes, and strive to foster deeper cross-functional relationships.

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