Storytelling is a key skill needed to be a CFO. Here’s how you can get better at it.
December 16, 2021 1 min read
A great CFO doesn’t just understand finance, operational drivers, and shifting market conditions. A great CFO has to persuade the rest of the management team to follow their advice. And that requires distilling their insights into a narrative of the business. Where it’s been. Where it could go in the future. That’s why storytelling is such an essential skill needed to be a CFO.
To be persuasive, a CFO has to adapt their narrative to their audience and filter the relevant from the irrelevant.
They have to deliver the key insights needed for their organization to make better decisions.
Most CFOs — and those who aspire to the role — don’t have storytelling training, of course. So today’s post takes a look at how you can improve your storytelling and how that can make a positive impact on your organization’s success.
Let’s break down four ways to structure a more coherent narrative that will allow you to create more insightful board reports, build trust with key stakeholders, and contribute to better cross-departmental collaboration.
A great storyteller needs time to craft the right narrative. When one of the most persuasive storytellers in history, Mark Twain, was asked by his publisher for a two page story in two days, he sent a telegram in response. “NO CAN DO 2 PAGES TWO DAYS. CAN DO 30 PAGES 2 DAYS. NEED 30 DAYS TO DO 2 PAGES.” But if you and your team are stuck in time-consuming, repetitive data collection, it’s hard to find time to dive deeper into the “why” behind the numbers. Unfortunately, most finance teams spend considerable time pulling financial data from CRM or ERP platforms, HR systems, billing solutions, and other tools manually, then validating and reconciling your different sources to make sure the data is reliable.
This creates a bottleneck in everything you do. Instead of focusing your time and energy on translating numbers into valuable insights and stories, you spend it on rote tasks that require high levels of concentration.
To overcome this, leave data collection to FP&A software capable of integrating all of your information into a single source of truth. If you automate the process, you get instant results and accurate, real-time insights you can contribute to strategic discussions.
The stakeholders you need to engage with don’t all care about the same things, or the same level of detail. For example, does your CEO really want to drill down into the numbers? No — they’d prefer you figure out the root cause of a drop in revenue and recommend one or more options to address it.
Before your presentation, ask yourself the following questions to make sure your story is tailored to your audience:
Even within a single organization, the experience of different audiences can be vastly different. Avoid being too technical — take care to avoid acronyms, abbreviations, or terminology that only the finance team understands. (Example: how many execs know what ASC 606 is?)
Avoiding unnecessary jargon doesn’t mean oversimplification. It just means communicating in a language familiar to your audience.
Finally, if you are addressing a group of senior leaders like your Board, keep your story concise. Boards process an overwhelming amount of information already, and their time is scarce. They will reward your brevity.
The pyramid principle of communications can be very helpful here: focus on the most important points and the “so what,” without going into too much detail about each aspect of your presentation. Keep that in the backup and make sure you know the detail and can speak to it, but only if it’s of interest to your audience. Poor storytelling gives too many details and irrelevant information. It’s essential to distill the key message and filter out everything else to make your narrative more compelling and relevant.
CEOs and other leaders at your organization may not understand the main point of your story if you’re presenting them with granular financial updates, dozens of spreadsheets, or detailed financial statements.
The old adage that a picture is worth a thousand words definitely applies to storytelling in Finance. That’s why the ability to turn a sea of data into insightful visualizations at the click of a button can be a valuable tool.
Charts and graphs comparing historical periods and different segments of your business can help highlight issues for your company and identify solutions to resolve these. Ideally, save templated views of the visualizations you make to spare your team the effort of starting from scratch for every new report. You’ll also be able to iterate and update your reports much more efficiently.
Improving your storytelling involves some trial and error. Asking for feedback can be a great way of learning and developing. Figure out what resonates with different audiences and adapt your approach to storytelling based on point two above.
Ask yourself, and reflect on comments and feedback from your audience:
To become great at your role, your storytelling skills should continue to evolve. Use new information at your disposal to make your reports and analyses more insightful, easier to understand, and more actionable.
Strive to make storytelling a key component of your communication strategy for the FP&A process. Remember, you aren’t analyzing the finances for the sake of the analysis, but to make recommendations that lead to action and move the business in a positive direction. You’ve got to figure out the right course to take, then sell it.
Doing all this well isn’t easy, especially if you’re a really detail oriented, analytically minded person. Just remember, storytelling is a dynamic process that requires understanding the context, as well as when and how to adjust your message based on your audience. And it’s a skill that improves with practice.
However, if you keep working at it and continue to ask for feedback, you’ll unlock several key benefits for your organization, including:
Ed note: Want to dive deeper into essential FP&A topics? Check out OnPlan’s most popular posts of all time here:
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