Tell the Financial Story with Greater Impact

Great leaders are skilled communicators. They ensure that their audience leaves a meeting being able to succinctly recite the important learnings. Skilled communicators reinforce a few key points — ideally three items and never more than five.

By contrast when most financial leaders are asked to tell the “financial story” they use far too many numbers. Their slides are busy. The readers or listeners are often overwhelmed with information. Even those who follow along often leave the interaction confused about what really matters.

A quote credited to Blaise Pascal (and many others) summarizes the job of great communicator:

“If I had more time I would have written you a shorter letter.”

Finance leaders are wired to resist giving the “soundbite’ answer. They realize that a thoughtful answer to any serious question is complex and nuanced. And that typically involves sharing a lot of details and pointing to a lot of different numbers and metrics. However, when presented with a lot of information, most humans struggle to remember and process it. The primary challenge in effective communication is to simplify the story into the few things that really matter.

I want to help finance leaders tell the story of their business and its performance more effectively. If you can improve this skill, you will be perceived as value-added by your colleagues (peers and all employees) and your investors.

Here are nine (9) practices you can adopt to make your presentations more impactful and tell a clearer financial story.

  1. Start by laying out the goal(s) for the meeting / presentation.
    • This is why we are gathered here or why you are reading this.
    • Ensure your audience is aligned around the issue being discussed or solved.
  2. Simplify and inspire action.
    • Lead with the conclusion or recommendation to inspire action.
    • Provide an executive summary (limited to 5 points.)
    • For Backward Looking Analysis (i.e. Budget vs. Actual or Performance to Goals) the executive summary could follow this rubric.
      • What should we do differently going forward, if anything?
      • What happened?
      • How did that compare to expectations?
      • Why did it happen?
      • What does it mean?
    • For Forward Looking Analysis (i.e. Making a Decision with Future Impact), the executive could follow this model.
      • Recommendation;
      • Rationale;
      • Risks associated with this path forward;
      • Measures we can take to mitigate the risks;
      • Alternatives / back-up plan if there are shades of grey (i.e. not a yes / no decision).
  3. Limit metrics / KPIs to a few items critical to your business (5 to 7 max.)\
    • Make sure your metrics matter to your audience. This means potentially different metrics for investors and employees.
    • Ensure the metrics capture all of the following items and are not overweight to one area.
      • Growth: e.g. Revenue growth, Net $ Revenue Retention etc.
      • Efficiency: e.g. Burn Multiple, Free Cash Flow / Share (if public with lots of share issuance or buybacks.)
      • Effectiveness: e.g. NPS, Employee Engagement, Product Usage
  4. Incorporate the future into the presentation. Most people want to know what lies ahead.
    • Great finance leaders spend a lot of time thinking about different scenarios that could play out in the future. And plan around these scenarios based on their likelihood.
    • We can’t change the past but can potentially alter the current trajectory leading to better future outcomes.
    • Actively seek out and present “leading indicators” which give some clarity about whether the business is heading in the right direction.
    • Leading indicators could be things such as:
      • For new customer growth: Customer engaged in product trials, Pipeline Coverage etc.
      • For existing customer retention/expansion: Product utilization metric, NPS etc.
      • For price elasticity (i.e. ability to raise price): Any results from tests with segments of the customer base or new customers.
      • For COGS / operating expenses: Trends in key input prices (including labor expectations on raises, changes in benefits etc.)
  5. Make one primary point on each detail slide.
    • The title should be clear and communicate the core message so that someone only reading the titles of the slides can retell the story.
  6. Use visuals (rather than only screenshot excel or G-sheet tables) to focus attention.
    • Use colors (green = good, amber = meh, red = bad) and/or arrows (up, down, sideways) to simplify the performance on each key metric against expectations.
  7. Show trend lines rather than single data points.
    • Seeing data over time conveys much more information.
    • In turn this leads to less confusion, fewer clarifying questions and better conclusions about the data.
  8. Present comparative data (i.e. benchmarks that are relevant to a business of your scale and stage.)
    • Most people evaluate products, businesses or investment opportunities in comparison to something else. Investors are always seeking out comparative data. Make the comparison easier for your audience and anchor them to a dataset that you believe is most relevant.
    • Here is a great example of comparative data on retention and renewal for different types of products sold to different types of buyers.
  9. Put all the detailed numbers (screenshots of financial information etc.) in an appendix or separate file.
    • In this way, you will share all the details for those who want to review them without cluttering the core presentation.

Present the “Map” not the “Territory”

“A map is not the territory it represents, but, if correct, it has a similar structure to the territory, which accounts for its usefulness.” — Alfred Korzybski (1931)

As the finance leader you know far more about the materials than anyone in your audience. And, you’ve thought in advance about what the data means. Your audience is seeing this information for the first time. Even if they’re financially savvy they don’t have the context and familiarity you do. 

Effective communication requires presenting the “map” and simplifying the data (the “territory”) down to the few items that really matter and are worth remembering. Help your audience by guiding their attention to a few key messages.

This process of simplification is much harder than it sounds. But highly valuable for your audience. They will thank you for it, if not in the moment, certainly when they evaluate your competence and effectiveness as a leader and communicator. And if the audience has questions or wants additional details, they will ask for it.

Aditya Dehejia

Adi’s experiences as a CFO and HR leader in start-up companies inspired him to start the CxO Leadership Accelerator. He saw firsthand the challenges in building a satisfying career, the importance of leaders in developing people, and the difficulty in building broad business acumen while excelling in your functional role. Prior to his operating career in start-ups, Adi held roles in a growth capital investment firm and in the corporate development and strategy department at a Fortune 500 company. Adi is an active volunteer mentor in the FirstRound Capital and TechStars networks as well as within his University alumni communities. Adi was born in India and immigrated to the US at age ten. He attended Princeton University (graduated with a degree in Politics) and the Stanford Graduate School of Business. He lives in the suburbs of New York City and has two adult sons and two lovable, crazy dogs.

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