Finance teams pull numbers from various spreadsheets and source systems every month. They are expected to answer small and big business questions. While facts and figures don’t stick, stories do. So, there comes the need for financial storytelling. Finance teams aiming to become strategic business partners focus on and prioritize similar storytelling.
Most CFOs and finance leaders spend most of their time organizing data and making a pitch. But, what they probably miss out on is practicing the pitch. By knowing how to present a story to a wider audience, you know what to weed out and the expected outcome will be of immense value.
This blog post includes:
- Defining financial storytelling
- Why is financial storytelling important?
- 5 Tips for improving financial storytelling
- How does Bluecopa help with financial storytelling?
Let’s get through them.
Defining financial storytelling
Financial storytelling involves explaining complex financial information in easy-to-comprehend narratives. Consider this instance - you transform data-rich financial data like balance sheets and income statements into a coherent story. This activity helps you convey hidden trends and insights in the sharpest way possible.
Financial storytelling is necessary to bring inferences to the table with the help of data. It involves suggesting corrective measures in a business-friendly manner. And finance leaders need to ace storytelling to communicate the larger picture to multiple stakeholders.
With financial storytelling, you tally back the numbers to the areas of interests of specific business leaders like sales leader, HR leader, or similar. And that’s a very powerful approach.
Here’s a practical example where we embraced financial storytelling at Bluecopa. 👇🏼
In one of our recent board meetings, our investors actually brought this concept of adding emojis to presentations. Say, if your pipeline is getting built well, it's a happy slide. And if you describe pricing pressure, that’s a sad slide.
Differentiating slides with emojis provided a high-level overview of what’s happening. And that’s pretty much what our investors were looking for. This instance actually happened in Airbnb’s board presentation and hope it gets popular very soon.
💡What does Sandeep, Head Controller, Myntra say about financial storytelling?
Finance storytelling starts with understanding the audience. While the dataset remains the same, the story you narrate to the CFO, business stakeholders, or your peers varies. You aren’t putting out numbers but bringing an economic context behind them.
Why is financial storytelling important?
Financial storytelling is vital for various reasons:
Clarity: It helps break down complex financial concepts and data into simple, easy-to-understand narratives, making it accessible to a broader audience, including employees, investors, and stakeholders.
Engagement: Storytelling captivates the audience's attention and makes the financial information more interesting and memorable. People tend to remember stories more than raw numbers.
Contextualization: It provides context to financial data by explaining the reasons behind the numbers. This context helps the audience better understand the financial performance and the organization's challenges and opportunities.
Decision-Making: Effective financial storytelling can influence decision-making by highlighting the implications of financial data and forecasts on the organization's future direction.
Transparency: It promotes transparency and trust, as it allows stakeholders to see the bigger picture and gain insights into how financial decisions are made.
Alignment: Financial storytelling can align employees and stakeholders with the organization's goals and strategies by illustrating how financial performance ties into broader objectives.
💡What does Sandeep, Head Controller, Myntra say about financial storytelling?
Financial storytelling is about creating an emotional connection with the stakeholders with whom you’re addressing the story. It’s about embracing narrative to get things done.
5 Tips for improving financial storytelling
#1 Know your audience
Tailor Your Story: Before you start crafting your financial story, understand your audience's level of financial literacy, interests, and concerns. Adapt your storytelling approach accordingly. For instance, if you're presenting to a group of investors, focus on financial metrics and investment implications. If you're addressing employees, connect financial results to their roles and the company's future.
Address Their Questions: Anticipate the questions your audience might have about the financial data and weave the answers into your narrative. This demonstrates that you've considered their perspective and are providing relevant information.
#2 Use compelling narratives
Start with a Hook: Begin your financial story with a compelling hook or an engaging anecdote that captures the audience's attention. This could be a significant milestone, a challenge overcome, or a surprising financial outcome.
Create a Story Arc: Structure your financial story like a narrative with a clear beginning, middle, and end. The beginning sets the stage, the middle builds the tension and provides context, and the end delivers the resolution or key takeaways.
#3 Visualize data effectively
Use Visuals: Incorporate charts, graphs, and other visual aids to complement your narrative. Visual representations of data can make complex financial information more accessible and help your audience quickly grasp key trends and insights.
Keep it Simple: Ensure that your visuals are clear and easy to understand. Avoid clutter and excessive data. Use labels and annotations to highlight important points.
#4 Tell the why and how
Explain Causes and Effects: Don't just present financial results; explain why they happened and what they mean for the organization. Discuss the strategies, decisions, and external factors that influenced financial outcomes.
Use Analogies and Metaphors: Analogies and metaphors can simplify complex financial concepts. For example, compare financial ratios to vital signs in a health check-up, making it easier for non-experts to grasp their significance.
#5 Engage with storytelling techniques
Incorporate Characters and Personalities: Introduce key figures in your financial story, such as visionary leaders, dedicated employees, or successful customers. Humanizing the narrative can make it more relatable and memorable.
Create Tension and Resolution: Highlight challenges and obstacles faced by the organization and how they were overcome. This creates a sense of drama and a clear narrative arc.
Include the Audience: Encourage audience participation by asking questions, soliciting opinions, or presenting scenarios for discussion. This interactive approach can increase engagement and comprehension.
How does Bluecopa help with financial storytelling?
Finance observability platforms like Bluecopa can empower financial storytellers by giving them easy access to real-time financial data, visualization tools, and analytics capabilities. It helps ensure that financial narratives are data-driven, accurate, and aligned with the organization's financial goals and performance.
These tools can be especially valuable for CFOs, finance teams, and executives looking to convey a clear and compelling financial story to various stakeholders.
Some notable features include:
Data aggregation and integration
Bluecopa integrates with various financial systems and data sources, collecting data from accounting software, ERP systems, spreadsheets, and more. This ensures that all relevant financial data is centralized and readily accessible for storytelling.
Real-time data updates
Bluecopa provides real-time or near-real-time updates on financial metrics and key performance indicators (KPIs). This timely access to data allows storytellers to incorporate the most current financial information into their narratives, making them more relevant and accurate.
Data visualization
Bluecopa offers robust data visualization capabilities. Users can create interactive charts, graphs, and dashboards to illustrate financial trends, comparisons, and performance metrics. These visuals can be used in presentations to make financial storytelling more engaging and comprehensible.
Customized reporting
Users can generate customized financial reports and statements using Bluecopa. Storytellers can tailor these reports to emphasize specific financial insights, trends, or key highlights, aligning them with the narrative they want to convey.
Performance monitoring
Bluecopa includes performance monitoring features that track financial metrics against predefined goals or benchmarks. This data can be used in storytelling to showcase progress and highlight areas where improvements or adjustments are needed.
Alerts and notifications
Users can set up alerts and notifications within Bluecopa to be informed of significant financial events or deviations from expected performance. These alerts can serve as plot points in a financial story, emphasizing critical turning points or achievements.
Scenario analysis
Bluecopa offers scenario analysis and forecasting capabilities. Storytellers can use it to explore "what-if" scenarios and illustrate how different financial decisions or strategies might impact the organization's future financial narrative.
💡What does Sandeep, Head Controller, Myntra say about financial storytelling?
60% - 70% of decisions made are based on the story you put forth. That’s the real weightage of financial stories. And when finance leaders get hired, their ability to communicate the narrative to the panel is a sure-shot filter to bringing them on-board.
Wrap-up
Financial storytelling is essential even with external communications like approaching partners, boards, or external agencies. Today, the ability to narrate stories is often evaluated while promoting finance leaders across the ladder.
Storytelling trainings and workshops targeted to budding financial professionals are on the rise. This has substantially reduced the time for those young finance folks to jump ahead and assume leadership roles.
To learn more about how Bluecopa helps with your organization’s financial storytelling and financial visibility, book a demo.
