An important message is being communicated around the finance industry: Become effective at financial storytelling and you’ll accelerate your career.
Here we’re going to explain why this skill is in such high demand and offer valuable tips on how to deliver compelling, effective stories that help your business grow.
The importance of financial storytelling
It’s understandable if AP managers, controllers and CFOs are at least a bit skeptical that storytelling is really the key to successful communications. After all, finance is about numbers and the bottom line, right?
Well, there’s more to it. Yes, the numbers are important. But communicating what those numbers mean in a colorful and memorable way will increase the chances that people listen to you and get your big picture message. When that happens, you’ll more likely achieve your goal.
So it comes down to this: Finance pros who can tell compelling and unforgettable stories that reach people emotionally will be well on their way to positions of more influential leadership responsibilities.
“The art of effective storytelling has never been more important,” according to Strategic Finance. “As management accountants, when we communicate the fruit of our labor, [such as] share financial results and analysis, we serve as storytellers.”
Consistent with this, finance experts mentioned several times the growing value of storytelling in the finance profession during our recent AvidXchange REVx 2021 sessions.
“Based on financial numbers, a finance pro needs to know what story they’re trying to tell,” said Tara Klein, vice president of finance with Graham Oleson. “They need to know if the story they’re trying to tell is of value to the business or if they’re missing the mark.”
An Accenture survey of CFOs revealed storytelling is one of the most important skills now being developed in the finance industry.
Top skills actively introduced into finance
Why is financial storytelling so powerful?
All this leads to the question: why is storytelling so effective?
First of all, storytelling provides context and meaning behind statistics and numbers.
For example, if your accounts payable (AP) department lowered operating expenses by 50 percent last month, that may be impressive.
But how does it compare with two months ago? And how does that 50 percent align with the company’s overall cost-cutting goals?
In your role as a finance pro, the story you could tell is that your AP department cut these expenses, and how much more you think you can cut next month.
You could also emphasize how business conditions have become favorable for making this possible because your team’s job satisfaction survey responses have risen the past month. When polled, employees revealed they’re more motivated and engaged than a year ago when you last did the survey.
This increase in motivation becomes a more important story business leaders need to know, beyond the numbers without context, because it tells them about employee morale.
When you can tell stories well about your company’s finances as they affect people, your message is more likely to be remembered than if you just share numbers and statistics.
Now consider this: Suppose you have numbers that lead to a compelling underlying story that top business leaders need to hear.
If you decide to just present the numbers because you believe they’ll speak for themselves and get your story across, you’ll be taking a risk they may not.
By telling a story about those numbers, especially giving relevant texture to the overall narrative, your story has a much better chance of being remembered and appropriate action being taken.
Another reason why financial storytelling is so powerful — people are naturally more likely to listen to stories.
Your finance team, of course, has numbers and stats and needs to report on them to other business leaders. If you tell a well-prepared story about these numbers that indicates the business needs to invest in more financial software this year to cut costs by 25 percent while not reducing staff, that reaches the leaders emotionally.
They’re much more likely to listen and understand your major insights and take action. If you just share the latest quarterly numbers, they’ll be less inclined to resonate with what you’re saying and do what you want them to do.
With these reasons in mind, let’s now consider several ways you can become an effective storyteller.
5 Tips to Improve Your Financial Storytelling
1. Think through your message and purpose
From the outset of your storytelling preparation, you’ll want to pinpoint what message you want to deliver and why. For example, you may have quarterly numbers showing expenses went up in the finance department by 40 percent last quarter – 30 percent higher than the previous quarter.
But that’s not the story. Those are numbers. The story you want to communicate to business leaders is your team has been overworked and people are resigning because of the situation at a 30 percent higher rate than last year.
To keep talented people on board and not overwork them, you recommend the company invest in automating financial processes. You’ll help make your case by communicating this move will, within one year, cut expenses by 30 percent and increase retention rates of skilled workers by 30 percent.
Taking this approach, you’ve told a story business leaders will feel. They’ll be more likely to act, which is what you want.
2. Deliver key messages up front
Business leaders have plenty of information to process every day. Choose carefully how you start telling your story. They’ll appreciate you getting to the point right away.
In making that choice, the less you say the better as long as what you say first is important to them. What they really need to know is what you should tell them right away.
3. Use analogies
Talking about financial statistics and numbers in a straightforward fashion can be tough to listen to. People often have difficulty remembering numbers and grasping them intellectually, especially if presented in large volumes one after another.
But using analogies within your storytelling can bring those numbers to life.
An analogy you could use for the overworked employee situation described above is that your finance department is like a ship half-way underwater.
If nothing changes, within a year the department will sink and won’t be functional because so many people will resign and expenses will get so high it won’t be possible to keep operating.
Business leaders tend to remember analogies
Business leaders will not soon forget the image of the ship sinking. But they might if you simply say “our expenses are up 40 percent.”
The leaders are more likely to feel the emotional impact of the entire finance department sinking, and jobs being lost and grow concerned about how the rest of the business will be affected. They’ll be more inclined to make changes to prevent the bad scenario from happening.
4. Help people feel something
Compelling stories reach people emotionally. When hearing the story above, business leaders would feel the emotions of several people in the finance department no longer working for the company if something doesn’t change within a year.
Employees are overworked and stressed. Business leaders feel that emotion.
When you tell a story that connects with human beings’ feelings, you’re communicating effectively. Your storytelling skills will have a more powerful impact and can lead to important changes.
“When we read dry, factual arguments, we read with our dukes up,” says Jonathan Gottschall, author of The Storytelling Animal. “We are critical and skeptical. But when we are absorbed in a story we drop our intellectual guard. We are moved emotionally and this seems to leave us defenseless.”
5. Use data visualization tools
Data visualization tools represent data in images that help you tell the story behind your data. The tools include diagrams, maps, pictures and charts.
These images lead to better insights and decisions often not possible using just text and data.
“Understanding data visualization, its application to finance, the various tools available, and the skills needed to effectively tell the story is essential,” according to Strategic Finance.
You’ll be able to tell better stories using the data visualization platforms on the market (Microsoft Power BI, Tableau, Qlik, etc). Watching online tutorials on how to use these platforms will help.
All this is important. But more crucial than using the tools is knowing what types of visualizations should be used to most effectively achieve your storytelling goal.
Why? Because your goal in storytelling is not to prove you’re adept at using technology tools. You want to connect with people emotionally. Above all else, make sure your visuals resonate.
It’s intriguing when you think about it. The finance industry is full of numbers and statistics. Yet the way to communicate about them effectively is not just to calculate them accurately and share them with business leaders.
Use the numbers to tell a more human story that people can easily understand and appreciate on an emotional level.
While numbers are needed to reach that goal, they’re most useful as elements in a larger story and plot about what’s most important to grow your business.
With these ideas in mind, here are three final thoughts to help you become a better storyteller and speed up your finance career.
Make sure your storytelling focuses on people and emotions.
When you watch a movie, you’re most likely to be drawn in by characters and how they feel, right? The same holds true when telling your financial story.
People care about people – much more so than inanimate things such as numbers. They’ll remember your story if you make them care about the people.
Start your story with what your audience cares most about and will feel the deepest emotional connection with.
It’s tough to listen to a long story when the most exciting part comes at the end.
Granted, on a Saturday night at the movies you may want that suspense to build. But in business there’s less time to wait around for the big story ending. Get to that punchline at the start and you’ll be well on the path to achieving your goal in telling the story.
Have fun telling stories.
Embrace the creative process of taking a gaggle of numbers and stats and molding them into a narrative about peoples’ challenges and opportunities. When you have fun telling the story, business leaders will enjoy listening to you more.
Bring the numbers to life in a way that makes people sit up and say “wow, I didn’t realize that. Thank you for sharing.”
When that happens, they won’t forget your story. That’s what you want. You’ll be on well on your way to achieving your storytelling objective.