Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.

Strategy and Finance Alignment: The Key to Optimizing Target Operating Model

Industries today are in a state of flux driven by volatile market forces. Although every company devises a strategy for creating long-term differentiation for goods and services, still various dynamics are emerging.

Across industries, market changes are affecting how Finance needs to operate. Finance must anticipate the implication of these various dynamics and forces evolving in the global economy.  These various forces are now pushing the corporation to align its Finance with its Strategy.  In effect, an optimal Target Operating Model is created as a result of aligning Corporate Finance and corporate priorities.

Conquering Market Volatility through Strategy and Finance

Strategy and Finance are strategic priorities that are essential to conquering market volatility in today’s global economy.  We are now encountering volatile market forces that are affecting global trends. There is the rising affluence of middle classes in emerging markets, rising risk profiles in individual markets.  Market consolidation is being pursued and there is now a dramatic shift in consumption patterns and the emergence of consumer power.

The changing market forces have pushed Finance to strategic directions. In the face of all these global trends, Finance is increasingly being streamlined and is leveraging provider’s technology, investment, and global scale. Finance is evolving from a purely transactional activity to strategic.

Finance organizations are rapidly realigning talent to emerging corporate priorities to improve business partnerships.  When Finance simultaneously develops and strengthens new skills and systematically measures, dissects, and resolves operational issues, then true gains are realized.

The 5 Key Elements of Governance

Finance can strategically respond to changing operational requirements.  But an operating model is required that supports the strategic alignment of both Strategy and Finance. This can be done with the application of the 5 key elements of Governance.

  1. The right configuration. When there is a right configuration, a clear decision-making hierarchy exists that allows monitoring of performance and issuing of resolutions.
  1. The right mandate. With the right mandate, governance teams are empowered to act on issues that they oversee. There is ownership of plans that incorporate processes, policies, and technology changes globally.
  1. The right metrics. The right metrics is the key element that establishes the standards of measure in terms of performance. It can effectively govern performance.
  1. The right tools. Investment in the right tools can lead organizations to continuously gather enhanced insights into performance.   Leaders can effectively visualize performance and analyze root causes with the use of these tools.
  1. The right people. An efficient process is ensured not only with the right tools but also with the right people.  With the right people, globally distributed process teams are formed and joint decisions are created with clear responsibility assignment matrices.

Communicating the Strategy

Communicating the strategy is often a neglected pillar of the overall plan.   The strategy’s vision and pace must be conveyed to all members of the organization. When this is done, it keeps troops aligned thus enabling leadership to focus on other dimensions of the Target Operating Model.

Interested in gaining more understanding of Strategy and Finance Alignment? You can learn more and download an editable PowerPoint about Strategy and Finance Alignment here on the Flevy documents marketplace.

Are you a management consultant?

You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.

About Joseph Robinson

Joseph Robinson is the Vice President of Strategy at Flevy. Flevy is the marketplace for best practices in business management. Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. The documents at Flevy (https://flevy.com) are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience. Flevy covers 200+ management topics, ranging from Digital Transformation to Growth Strategy to Lean Management. You can peruse a full list of management topics available on Flevy here. Prior to Flevy, Joseph worked as an Associate at BCG and holds an MBA from the Sloan School of Management at MIT. You can connect with Joseph on LinkedIn here.


Complimentary Business Training Guides

Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]   This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]
We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]   We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function






The Flevy Business Blog (http://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most articles have been contributed for management consultants and industry executives with over 20 years of experience. If you would like to contribute an article, please email our editor David Tang at [email protected].

Flevy (http://flevy.com) is the marketplace for premium business documents, such as management frameworks, presentation templates, and financial models. Our documents are of the same caliber produced by top tier consulting firms, like McKinsey, Bain, Accenture, BCG, and Deloitte. Learn more about Flevy here.

Connect with Flevy:


About Flevy.com   /   Terms   /   Privacy Policy
© 2019. Flevy LLC. All Rights Reserved.