Why is story telling an important skill in Finance

Organisations are more and more overloaded with data and information coming from the digitised world. Storytelling in Finance has become an important theme in the last couple of years as a result of a number of factors that influenced the way Boards or Executive Committees work. One way for Finance professionals to add more value and insight to quantitative data is to build context, background and leading thought through storytelling.  

Overwhelmed with information

Organisations are more and more overloaded with data and information coming from the digitised world which makes it easier for decision makers to get distracted and lost in the data lake. Storytelling in Finance has become an important theme in the last couple of years as a result of that and a number of factors that influenced the way Boards or Executive Committees work. One of the biggest factors was the volume of data and amount of information that at some point members of these bodies started to be flooded with. One way for finance professionals to add more value and insight to quantitative data is through storytelling.  

After all, when presenting a content to business audience its main aim is for them to watch, listen, digest, understand, ask questions wanting to know more, act on it and share further (i.e. to their teams). Stories help refocus attention from hard, often numeric content towards human communication as stories connect ideas, emotions and facts underpinned by data. This is because stories give shape to facts and figures, making them digestible and easier to follow. They then convey culture, human aspects, purpose and experience people are more likely to lean toward. That is how storytelling is used to connect, engage, gain trust, share insight, inspire and motivate. 

Another factor that increased the role of storytelling in finance is the limited ability of human brain to consume, process and analyse large volumes of data in order to make decisions. Given the pace of change, new information sources, ever changing trends in the market, spend of exchange of thoughts and time running faster than ever – people have been looking for ways to simplify. Taking decisions based on data, real time and trying to predict the future better than competitors has not been made simpler because of these factors. Initially what they ended up with were sheer volumes of information packs that they had to review and absorb before every session to be able to make decisions.  Now this has proved to be more and more difficult as reading 100+ page pack they receive the evening before has got them to their limits and simply impossible to cope. 

Need for synthesis

One way to deal with that is to acknowledge the need for synthesis. Elaboration of focused material and relevant-only figures is now the top priority for those who want to win their business case, provide options for cost-cutting initiative, share piece of advice, raise attention loss-making product or suggest a pricing change. This is also where finance is playing a pivotal role, being at the front of influencing decisions driving the business outcomes. Executives but even mid-level line managers no longer have time to review all they get. Instead, they turn to those who can synthesise and cut the long story short, get to the point and build up the argument for or against.

Nowadays building any argument has become even easier so everyone expects to back up the story with data, so that the pure emotional empathy-based rapport is then backed up with evidence that has solid foundations. And the connection between a story and data becomes so powerful that it becomes much easier to influence others. 

Anything to make the decision making process quicker and more efficient. There are trends that indicate that management committees no longer allocate any time for papers “for noting only”. Instead they filter material towards content that requires decisions.

Financial storytelling is different

One way to start a storytelling presentation is to give examples from completely different field. When talking about leadership we often hear stories about Formula 1 pitch organisation, cross-the-ocean exploration missions or critical events for expeditions crews in reaching mountain summits. We can imagine catchy stories in marketing, product development or even technology. But when it comes to finance stories they may not be as inspiring. This can be tricky, because trying to humanise something that is inherently not human (numbers, performance, results, risks) often comes across as forced or awkward. So we need to adjust and focus on what’s essential.

What also comes to a rescue are visuals. We should never underestimate the quality, design and flow of the way financial data get illustrated and visualisation tools are there to grasp. Navigating the story around dynamic, online, drillable, interconnected content can be powerful and more digestible to non-finance stakeholders if presented logically.

Know your audience

The best story telling is when you come prepared and know your audience, who they are, what they like, how they consume information. That often needs a balance between logic, numbers, evidence with backgrounds, interests and themes behind the facts. When you remember that people make emotional decisions and justify them with logic, it also starts to make sense why story telling masters are often winning in boardrooms. 

When a presentation factors in a story with an emotional content, the right tone of voice and is crafted well, it allows the audience to relate to characters, to get motivated, to recall your story, to understand the story and, most importantly, to take action. 

When you think about the message you want to convey you need to adjust it to the right audience, use the adequate style, apply the most compelling arguments and finally speak the language the audience will understand. Those who have heard corporate jargon, acronyms or super-technical language before, know how frustrating it can be if you try to decode words used, rather than focus on the outcomes of the presentation. This is why it is important to pass the story that everyone understands. It increases the chances in a probability test, you will achieve what you planned for. So thinking about the goal you want to get to is another essential. 

Building trust and credibility

Storytelling is about connecting with the audience, building their interest but also it is about conveying what’s in it for them. Using anecdotes, examples, little stories help build empathy but also reminds the audience why the case you are trying to make is actually important to them.  That calls for anticipation of the right questions. We should attempt to predicts the topics of focus and attention and get ready with answers. Why do we measure this or that? What does it tells us? Why has it moved? Do we need to change our concerns? Do they help understand or identify business risks and opportunities?

They also raise your profile as a speaker and builds the awareness to believe why they would listen to you in the first place, what qualifications you have for them to believe you. In other words what makes you credible.  Couple of slides on the screen will not do that for you. Days when simple talking to the slides was good enough are now well over. 

Consistent structure & logic

Once the rapport is built and you are being heard – then argument is what should always come next. Structure and built-in logic are the skeleton of communication. This helps to build a flow that others can follow and sympathise, to finally buy into it.  

The ultimate balance does require some logic, some story and clearly some credibility. This can vary and change as the presentation goes or as the composition of the audience changes or as questions come up – but all of these three elements need to be there.  

What is important is that finance need to be able to communicate the numbers in an understandable manner, almost translating complicated datasets and calculations into straightforward but persuasive messages.

So, could we imagine a bit of storytelling around monthly results? Instead of jumping onto tables and graphs right away, if we start by putting things in the economics context, describing current macroeconomic environment, challenges that the sector faces and how they all affect the organisation, we start to build a bit of narrative for the numeric content. Then talking about just a few real case examples from clients, showcases examples where they behaviours changed offers a great background story to what we can expect, what triggered these changes and ultimately what we (i.e. decision makers) should do about them. Creating a narrative around expansion or lost market share is only good if it explains the “why” behind the figures. So, the role of finance is to derive value from any financial measurements, KPIs or other metrics through explaining the drivers and reasons why. If we understand what matters to the business deeply (organisation’s purpose) and assigning data to measure it is already a good input. Stories should give the audience purpose and a motive to take action so if we highlight a risk with a bit of explanation for what can happen if they materialise – it almost urges the audience to act.

Ultimately what we are after is not always to convince, win a case or demonstrate progress but quite often it is about them asking “tell me more” and making a decision.  

And that is when Finance becomes even more interesting.  

Author: Krzysztof Skajewski

Photo source: Unsplash