#062: Agile Influencing, Strategy, and Integrative Planning

with Mike Huthwaite

Our Guest Mentor:

Mike Huthwaite started his finance and accounting careers as a consultant 18 years ago and is now founder and CEO of FinanceSeer LLC, which won Gartner’s cool vendor award and counts large global multinationals such as Chrysler and British Airways amongst its customers.

Mike is a passionate advisor and thought leader in helping organisations enhance their strategic planning capabilities. Mike is a regular speaker and blogger on the topics of uncertainty, Real Options (advanced scenario analysis) and various financial modelling technologies as well as an advocate for Cash Flow and Discounted Cash Flow (DCF) analytics.

Mike is currently based out of Chicago, Illinois in the United States and is pursuing an MBA from Northwestern University’s Kellogg School of Management.

Key Quotes From the Episode:

“[On the best things we can do as finance professionals] … is to educate the business on that message [broader sustainable system view] I don’t think they need to be experts in finance nor do we want them to be but understanding that whole operational system.” [06:12]

 “[On growth not being linear] In the Finance world we’ve all probably heard of the Gordon growth valuation model which relies very heavy on the letter named ‘g’ which is growth, so how do you sustain that growth. And we all have in our minds this different vision or view of what this growth looks like, but broadly what I think growth looks like is that it is not a straight line, it’s not linear, usually what it is for organisations is what we would actually call the J-curve” [08:01]

“[On his biggest challenge he saw in the planning and modelling process] It doesn’t matter where your model is when you start the modelling process it’s where your model ends at the end of the planning process and how many iterations did it go through and how many different ideas did you discuss, ultimately you through away most of them, but form consensus around the best ideas.” [14:37]

“[On why AI is unlikely to disrupt strategy roles at all] In the strategy world you’re beyond very strong levels of probability you’re in the space of I need to influence the world because if you can’t measure it and you can’t manage it then you really should influence the direction of things and that’s what strategy is al about.” [15:42]

“[On what strategy really is about] Strategy is really about understanding what really works today and breaking it. It’s about being disruptive so you can go into markets and opportunities so you can expand current constraints, break down bottlenecks, so those really require investments today and you go in and take advantage of those. So it’s not really about the data in that world it is really about influencing, which is another way of saying that it is about pull planning, taking the data and pulling it across.” [17:30]

“[On what we’re really looking for in the long run] … is screening for opportunities and on the other side it is not really risk that you’re looking to mitigate because risk implies probability what you’re really looking at is threats so it could be corporate threats, competitor threats, it could be black swans, those are the things we need to be constantly screening and evaluating for and that requires an always on agile apporach.” [20:09]

(Other resources and how to connect with Mike below).

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Key Points From the Episode:

  • Why agile influencing is important and what type of agile approach works best in Finance.
  • The distinction between push and pull projections in integrative planning and why this is important.
  • Mike makes the case for a Strategic Finance function and what this involves.

Time Stamped Show Notes:

[02:00] – Mike shares his globe-trotting introduction to finance and accounting

[03:56] – Share why he puts so much emphasis on long range planning and the future.

[05:15] – Tips on how to take a systems wide (rather than local) view of the.

[06:12] – The best thing we can do as finance professionals.

[08:24] – Explains the J-curve and why growth is not linear.

[08:50] – A couple steps that we can take to help make our businesses have more sustainable growth.

[10:44] – Mike shares what he saw by analysing pig-farms and the two common problems all businesses struggled with.

[12:16] – His biggest challenge he saw in the planning and modelling process.

[13:13] – We coin the term agile influencer and what type of agile works best in Finance as well as why it’s important.

[14:45] – Mike shares his passion for leveraging technology in finance & accounting but also why it is unlikely strategy will benefit from AI at all.

[17:26] – The distinction between push and pull projections in integrative planning and why this is important.

[20:00] – Shares one surprising area that we really need to continually evaluating in the long run.

[20:53] – Mike makes the case for a strategic Finance Function and what this involves.

[23:08] – Where we can leverage ideas from IT such as ‘branch and merge’ to improve the strategic planning process.

[25:05] – Shares an analogy on screening for opportunities and threats for a strategic finance function.

[27:47] – The best bit of advice Mike has ever received.

[29:05] – The resource that Mike would recommend listeners check out.

Resources Mentioned:

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