For finance professionals to perform effectively, they have to understand their company’s goals and be able to explain what financial data means for the pursuit of those desired outcomes. Storytelling isn’t just about crafting a compelling narrative from data but also the ability to communicate effectively so that leadership and stakeholders know how much progress the organization is making toward achieving its strategic objectives.
In a conversation with Strategic Finance, Jenn Ryu, CFO of global consulting and staffing firm RGP, and Efrain Rivera, senior VP and CFO of Paychex, a human resources, payroll, and benefits platform provider, talk about the work that accounting and finance professionals perform, starting with analysis and interpretation to get an accurate view of the data, then weaving an insightful, coherent narrative that ties into the organization’s strategic plans and goals.
SF: What are the most important elements of effective storytelling in a professional context?
Ryu: The most important building blocks of effective storytelling are knowing exactly what story you want to convey— the what; understanding your audience so you know the best way to deliver the story—the how; and finally, what you want your audience to take away—the answer to the question “so what?” From a CFO’s perspective, the core components of a good story often originate from financial and operational insights that hinge upon the effective use of data and analytics. Organizations across every industry are investing in finance transformation initiatives to power business momentum and gain valuable insights, from unifying enterprise-wide data to deploying cloud and intelligent automation solutions.
But data and numbers only tell your audience so much on their own. Effective storytelling requires a sound understanding of your audience’s existing perceptions or awareness, what drives their decision making, and the level of detail that will resonate with them. We must be able to understand the context, adjust the message, and filter out irrelevant information. Context is a vital element of effective storytelling, as dollar impacts and percentage growths may be perceived differently, especially for an emerging service or market.
Rivera: The first important building block of a good story is understanding what the numbers are actually telling you. That information has to be accurate. Secondly, beyond just accuracy, you have to interpret what that information means for the organization.
Let me give an example of how we can have the same top and bottom line, leading to very different conclusions. If you put together a budget that’s correct in totality, meaning the total revenue, total expenses, and net income are correct, then there could still be a lot of variations in between the components of the budget. This is a simple example of the value of variance analysis. If we don’t understand what’s happening in the components of the budget, then we can miss a lot of what’s going on in the business. As finance professionals, we need to analyze the details at enough depth to truly understand the story that the results and variances are telling.
SF: What are best practices for improving accountants’ ability to communicate effectively and telling a captivating story?
Rivera: The first point that’s really critical is the ability to articulate your story clearly. Every time you tell the story by painting a clearer explanation of results or projections, you’re building and developing your communication skills. Many audiences may not understand all of the financial implications of the data, but you can drive a particular point home by using the right analogies. When you can connect with an audience by painting a picture of something that’s relatable, they can track what you’re saying more easily.
Secondly, you need to rehearse. When I speak onstage, most people think I’m speaking extemporaneously because I have a conversational tone and don’t use notes. In reality, I’ve rehearsed exactly what I want to say seven to 10 times.
Third, it’s important to find some point of connection with the audience. Good, effective speakers like their audience, understand them, and work to build a rapport with them.
If you’re trying to have a conversation with the audience, then make your presentation about them, not you. You need to recede into the background and let the information go to the foreground. People feel affirmed and heard when they’re part of the story, rather than being lectured to.
Ryu: It starts with finding the right narrative for the situation and the audience. Ask yourself what you ultimately want your audience to come away with, determine the right amount of relevant details to provide, and identify the decision points that will lead to agreement. To prioritize the information that’s most relevant to your audience, you must consider each individual’s priorities, their backgrounds and knowledge of the material, and the questions they’re likely to ask.
Effective communication and captivating storytelling require lots of preparation and practice. Even more importantly, honest feedback from a trusted mentor or peer will add tremendous value in one’s journey to become an effective communicator.
SF: What aspects of the CFO’s role and responsibilities require storytelling skills or are made more effective by honing those skills?
Ryu: CFOs have always had to be good at translating data into insights and stories that illustrate value, but it’s becoming an even more important skill set as CFOs increasingly operate in a storyteller role. The responsibilities of the CFO have changed greatly over the years—we’ve taken on more of a role as value creators within organizations. Many CFOs are leading transformative initiatives that require an ability to convey to business teams and partners how the transformations
fit into company strategies and operational insights in ways that extend beyond traditional financial communications.
The goals of every CFO should be to establish trust, build consensus, and drive strategic decision making. Essential to each of these goals is the ability to boil down insights into a persuasive business narrative while focusing only on what’s most relevant to your audience and what they care about most.
Rivera: As you hone your communication skills, there’s simply no substitute for storytelling consistently. Throughout your week, you can always find opportunities to share your ideas, and your storyboard is the financial information you present.
Most people have an innate ability to be a storyteller but simply don’t practice it enough. For example, I may have an innate musical ability to play guitar, but if I never practice, then I won’t be able to play a song anyone would want to listen to. If you look [for chances to tell relevant stories], then there are always [growth] opportunities for those who are willing to learn and practice their skills.
SF: How can professionals focus on improving their story-telling to provide a boost to their career?
Ryu: It’s becoming increasingly important for accounting and finance professionals to develop effective communication skills that they can leverage in daily interactions, especially considering the rapid pace of change we’re all experiencing in today’s environment. Professionals at every level and function can benefit from the ability to deliver vital information to their colleagues in a concise and engaging manner. Being great at data analytics can only get you so far in your career if you can’t make the insights known and easy to digest for your executive team and other key stakeholders to drive better decisions and business outcomes.
SF: How can management accounting and finance professionals cultivate their creativity, communication skills, and storytelling abilities in a numbers-driven profession?
Ryu: Accounting and finance professionals can find many resources on this topic in online classes on platforms like LinkedIn and MasterClass, and through professional membership associations such as IMA® [Institute of Management Accountants]. But the best way for accounting and finance professionals to hone these important skills is to gain practical experience by presenting in real-world settings to mentors and colleagues.
Professionals can also develop these skills during everyday interactions, not just important presentations and meetings. Effective storytelling requires you to listen to colleagues, show empathy, take feedback, and constantly adapt your approach as you learn.
Rivera: Although we’re surrounded by numbers, those numbers on their own don’t tell a story for most audiences. They’re simply an input to the story. Our creativity comes in as we determine how to effectively communicate what the numbers are saying in a compelling way that’s meaningful for your organization.
Naturally, we shouldn’t give the exact same presentation to the accounting team as we’d give to the marketing team or the board of directors. When you consider your audience, think about an analogy that fits the [background and knowledge of that] audience. If you aren’t sure, then ask others if your understanding is correct and if your story conveys the desired meaning to the audience.
SF: How important is it for CFOs to acquire data visualization skills and use storytelling to convey the strategy to the organization’s key stakeholders?
Rivera: Data visualization techniques help to reinforce the points being made. There’s an excellent book written by a professor at Yale University, Edward Tufte, called The Visual Display of Quantitative Information. Although it’s about statistics and data, the book reads like an art book with a display of numerical, graphical, and visual displays. Tufte believes that presenters can display numerical information so it can look like art and hammer home the point they’re trying to convey.
It’s critical for each slide to bolster the speaker’s story in a concise way. Some people put up complex graphs with tons of information and think that everyone can follow them, but often the audience can’t.
Think about how you display data and make it simple, whether it’s a line or bar graph or pie chart, and find ways to powerfully support the narrative. As you do this more, you’ll get better at choosing the visual display to drive your point home.
Ryu: Organizations are placing more priority on analyzing their business to gain the insight they need to make strategic decisions about how they can grow, whether that means expanding their customer base or reevaluating the products and solutions they offer. Investments in [financial planning and analysis (FP&A)] and data analytics tools equip finance teams with the abilities to drill down, consolidate, and visualize data instantaneously, and, as financial leaders, we must be able to use all the tools at our disposal to create an effective narrative. Strong creativity, communication skills, and storytelling abilities ultimately help us draw connections between these finance transformation investments and how the data-driven insights they uncover are impacting opportunities ahead to create long-term value.
SF: How do you decide what medium is most appropriate to convey your story or what multimedia elements can best enhance your presentation?
Ryu: One should always consider their audience when choosing the appropriate medium to convey their story. In general, less is more. Use simple charts, graphs, and images to captivate your audience. Overburdening an audience with too many words or numbers tends to create distractions and diverts their attention from listening to you to reading the presentation.
Rivera: When deciding what elements to use, leverage whatever you believe clearly conveys the idea you’re trying to present but never show a collection of tiny lines of information. When I first started at Paychex, I used to provide more detailed financials, but I found for most audiences, that level of detail wasn’t important. For most groups that you present to, you’re looking to convey key points to inform their judgment. That’s the art of the discussion: picking the right set of visuals.
For me, I’ve found that transportation visuals resonated since, like a business, vehicles move from one point to another. Find an element like a photo, movie clip, or sound clip that fits your presentation. If it works, then use it.
SF: What are examples of core messages that finance leaders should seek to convey with their stories?
Ryu: The purpose of a good story from a financial leader’s perspective is to create connective tissue between data, the organization’s strategy, and the messages that the CEO and [the rest of] the C-suite are delivering. Credibility is of the utmost importance for CFOs, and it’s up to us to develop a financial narrative that threads the needle between strategy and performance data, and as a result, leading to calls for action.
Rivera: The story lies within the meaning of a set of financial data. Storytelling for finance professionals isn’t just a compelling narrative woven from data, but also the ability to communicate effectively so the organization knows how it’s tracking against its goals and where it is on the journey. Spending sufficient time on analyzing data creates the ability to craft a compelling narrative.
Likely the most important set of messages we’re trying to convey is where we are currently, where we’re going in the future, and then what challenges and opportunities lie on our journey ahead. If you can state those things clearly to any audience, then you have the making of a good presentation.
IMA Storytelling Webinar
Ready to learn more? Join Efrain Rivera, senior VP and CFO of Paychex, on August 14, 2023, for the IMA webinar “Lead Strategic Change through Effective Storytelling.”