2026, FP&A’s Breakout Year

Welcome to Headhunter Secrets, where I’ll share perspectives about the search business. We hope you’ll use our services to execute searches. Nonetheless, I wanted to give you some insights I’ve gained from doing search work since I was 23 years old.

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2026, FP&A’s Breakout Year
Exit financial tailwinds, enter operating discipline

For four decades, from roughly 1981 to 2021, corporate performance enjoyed a powerful and persistent tailwind. Interest rates declined in a long, steady arc. Labor costs, adjusted for global sourcing, trended downward as production migrated to lower-cost regions. Supply chains became increasingly integrated and optimized. Capital was abundant. Efficiency gains were often structural rather than managerial. In that environment, growth was pretty easy to capture.

The effects on financial performance were profound. Ever-lower labor costs and ever more productive global supply chains lifted operating margins and EBITDA. Companies did not need to squeeze every basis point from operations when globalization itself was compressing input costs. Meanwhile, ever-lower interest rates mechanically inflated asset prices. As discount rates fell, valuation multiples rose. Higher EBITDA combined with higher EBITDA multiples created a virtuous cycle for enterprise value. These influences made financial engineering the dominant lever of value creation.

That era appears to have ended.

The period since 2021 has marked a structural turn. Interest rates have reset upward. Capital is no longer free. Global supply chains are less frictionless, lowering their productivity and increasing costs. Labor markets are tighter, wages stickier, health care inflation more challenging, and demographic pressures more pronounced. The same forces that once served as “wind in the sails” now feel like “wind in the face.”

When interest rates rise, valuation multiples compress. When labor and logistics costs increase, margins tighten. Financial engineering cannot offset operational weakness as easily as before. The mathematics have changed. If enterprise value can no longer rely on expanding multiples, and if EBITDA cannot rely on structural cost deflation, then value must increasingly come from true operating productivity.

This is why 2026 may be remembered as the year of FP&A.

Financial planning and analysis sits at the crossroads of strategy and operations. It is the function where operating data coalesces and where key performance indicators are defined, measured, and interpreted. While corporate finance focuses on capital structure and transactions, FP&A focuses on the machinery of the business itself—revenue drivers, cost behavior, margin dynamics, working capital efficiency, and return on invested capital.

In the new environment, companies must interrogate their own operations with greater intensity. Where is productivity lagging? Which customers generate true economic profit after service costs? Which products absorb disproportionate overhead? Where does pricing lag input inflation? Which processes tie up cash unnecessarily? These strategic and data-driven inquiries require ongoing granular analysis of operating KPIs.

The companies that will thrive in this new era are those that translate operating data into disciplined action that increases operational productivity. They will refine contribution margin by segment. They will track labor productivity per hour, unit, and dollar of revenue. They will evaluate inventory turns, forecast accuracy, procurement variance, and customer acquisition cost with rigor. They will build driver-based models that link daily operational decisions to monthly financial outcomes.

FP&A becomes the nerve center of this effort.

In the previous era, a CFO could grow company value on ever cheaper capital and multiple expansion. In today’s environment, value creation depends more on increasing output per unit of input—more revenue per employee, more throughput per facility, more margin per customer relationship. This is, operations finance, the less interesting finance function during the recent period of financial engineering.

This does not mean corporate finance disappears. Capital allocation remains critical. But the balance of emphasis seems to be shifting. When external conditions are favorable, leverage and multiple expansion can mask operational complacency. When external conditions tighten, operational excellence becomes non-negotiable.

In that sense, 2026 may represent a cultural transition inside companies. Finance is moving closer to the factory floor, sales pipeline, and logistics dashboard. The language of value is shifting from spreads and multiples to productivity and performance indicators. The competitive advantage will belong to companies that can convert operating data into sustained EBITDA growth in spite of macro headwinds.

The long era of structural tailwinds that is coming to a close rewarded access to capital and scale. The emerging era will reward operating discipline. The wind has changed direction. And so must operating companies in order to increase their productivity, profit and value.

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Hope these insights are helpful. 

We at Leyendecker have been doing search work for 40 years. We’ve completed over 100 C-level searches, most for CFOs. Most have been PE portfolio companies, but we’ve also helped owner/managed and publicly-held companies. Our placements have helped their employers go through almost 50 successful liquidity events.  

Keep us in mind when you seek talent that will get you over the goal line. We hope you have a great year!

Doug