What’s your story?
When analysts, shareholders and other stakeholders put forth this question about the company to the chief financial officer, a concise and compelling response is required. Having the right answer teed up—to that initial question as well as to follow-ups—requires a surprising amount of legwork. To that end, storytelling has emerged as an essential skill, even table stakes, for business leaders. It certainly means having a good story. But to paraphrase my father, who was an advertising executive, it also means that “the story is in the telling.”
CFOs must understand and internalize the board’s and the CEO’s strategic corporate message, reconcile that narrative with what different stakeholders want to know, curate supporting data, analytics and insights that illustrate and animate the message, and then subtly shade the narrative in an audience-appropriate manner so that it gets across the footlights. When the communication concerns the company’s response to inflationary pressures, for example, how CFOs discuss managing cost increases via pricing increases will differ depending on whether the audience is made up of shareholders or customers.
CEOs are the chief storytellers for their enterprise. Their primary objective is to improve the performance and profitability of the organization while encouraging stakeholders to invest in its future. CFOs should start their storytelling work by clearly understanding the company’s strategy and how their CEOs distill that strategy into the message they deliver both internally and externally. Keep in mind that the CEO’s message also may have subtle variations depending on which stakeholder group—i.e., audience—is listening.
Second, the CFO needs to assemble data and valuable insights that support the CEO’s message and accentuate the strong points of the CEO’s message and personal storytelling style. This information can be sourced from the advanced and predictive insights that finance groups generate from an expanding collection of internal and external data sources.
Here’s a helpful analogy: If you tune in to a baseball game, focus on how the play-by-play and color announcers appear to have an endless supply of player and team statistics at the ready to support their commentary throughout the game. Most teams have squads of analysts who find and feed these insights to the announcers before and during the broadcast. While CFOs probably don’t have access to such real-time feeds during analyst calls, they can and should tap their FP&A squads for stakeholder-relevant supporting data and analytics before and after those sessions.
Next, CFOs should anticipate what different stakeholder groups want to know. Investors care about growth, so expect them to ask questions about growth opportunities, obstacles and projections. Customers and vendors want to hitch their wagons to a success story; be prepared to discuss how each audience will benefit from your company’s growth.
Here are six ways to help CFOs sharpen their storytelling—and just as important, their responses to the questions stakeholders ask about their stories:
- Start and end with the story. While it may be tempting to lead with a captivating number or metric, begin with the story instead—for example, “Our organization remains on a strong growth track globally.” Keeping the message top of mind will help CFOs select the most persuasive data as evidence of their message’s key points. The selected story should capture the takeaway messages for the audience. If you want a message to stick, follow the rule of three: “Tell them what you’re going to tell them, tell them, and then tell them what you’ve told them.” Compelling messages are bookended with an attention-getting opening statement and a strong close reiterating the takeaway message.
- Do your research. In addition to gathering data-driven insights and indicators to support messages, CFOs should invest time anticipating the questions that different stakeholder groups are likely to ask. These exercises will help finance leaders avoid being caught flat-footed. It’s better to answer a question directly and in a well-supported manner than to have to say, “That’s a good question, and one I’ll have to get back to you about later.”
- Tap non-GAAP data: Non-GAAP financial information also can support the CEO’s message. CFOs may need to invest more time orchestrating the development and delivery of non-GAAP financial data and dashboards to support their stories.
- Be prepared with examples. CFOs should be ready to share examples as well as data points. What did the team in the EMEA region do this year? How did an alternative supplier deliver the goods when the primary supplier was forced to close shop for two weeks amid a regional COVID outbreak? How did the new skills-at-risk metric help strengthen the company’s retention rate for information security professionals? What macroeconomic trends pose challenges, and which can be leveraged as opportunity pursuits?
- Make it visual and personal. If the venue allows, graphs, pictures and charts can strengthen the message. If using slides, keep in mind the rule attributed to Steve Jobs: “Bullets kill.” Implicitly, this means that good storytelling requires a “storyteller.” Well-prepared executives want their audience focused on them, not on a slide deck.
- Strengthen your weaknesses while leveraging your strengths. Rightly or wrongly, CFOs traditionally have been grouped into two categories: future CEOs and former accounting officers. Savvy storytelling requires a blend of both skill sets and both sides of the brain. CFOs who are less comfortable commanding the room should strive to improve their ability to lay out inspiring visions. Visionary, gregarious finance leaders should focus on improving their selection of data, metrics and supporting evidence.
In practice, these types of communications have relatively little in common with traditional storytelling. Instead, stakeholder discussions feature much more give-and-take, perhaps more closely resembling interactive novels in which readers pick their own plot developments while steering the narrative in unexpected directions.
When C-suite leaders share their message, listeners often respond with questions designed to pick at what they perceive to be weaker narrative threads. CFOs need to be equipped with relevant data points and metrics, awareness of their key audience, and knowledge of their storyline’s strengths and weaknesses in order to face those twists and turns with short, well-supported answers that steer the conversation back to the message.
This article originally appeared on Forbes CFO Network.