There’s no C-suite partnership more vital to business success than the one between a chief executive officer (CEO) and a chief financial officer (CFO). A solid CEO-CFO relationship can be the difference between an organization that crumbles under pressure and one that can handle any scenario while pursuing a strategic vision. Tesla and Zoom are excellent examples of how valuable a strong CEO-CFO partnership can be.
Elon Musk and CFO Deepak Ahuja’s partnership saved Tesla from not one but two near-bankruptcies crises, putting the company on track to become the world’s most valuable car company. In 2017, Zoom CEO Eric Yuan hired former colleague Kelly Steckelberg as CFO, not only to help him navigate the company’s rapid expansion but also to help him put the company on the path to IPO.
But you can’t develop a strong partnership between the CEO and the CFO if the finance function merely serves as a traditional reporting role. The modern CEO-CFO relationship and the success of the company depend on one key factor: the rise of storytelling in finance.
The Rise of Storytelling in Finance
Finance and storytelling seem to appear on opposite ends of the spectrum. After all, one is based on language, while the other is on numbers. But paired together, finance and storytelling make a powerful team. For starters, storytelling takes the information you’re sharing and contextualizes it into what your audience needs to know. Stories simplify the message. When it comes to navigating complex reports and data, this is extremely vital.
A well-crafted financial story will put the facts and figures in your reports into context, allowing internal stakeholders—such as the C-suite and the board—to connect with your plan on an emotional level, giving your message more power.
By focusing on storytelling, financial executives can strengthen their relationships with CEOs, and thus lead the company into success. Financial knowledge will always be valuable, but monitoring financial statements and cash flow forecasts in Excel will not help you build a stronger relationship with the CEO or achieve company objectives. Being able to interpret financial data into strategic business insights will.
According to Jack McCullough, president of The CFO Leadership Council, “More than a few CEOs . . . have shared with me that they value a CFO’s ability to tell a story far more than their ability to number-crunch.” What makes a good CFO is to “bring the numbers to life in a way that enhances understanding” and provide actionable insights for business leaders.
For modern CFOs, data storytelling and bringing the numbers to life is all about getting to the “why” behind the numbers. It entails going beyond simply reporting on the numbers but explaining in plain terms how those numbers will affect strategic decisions.
Traditional reporting involves providing the CEO with copies of income statements, balance sheets, and cash flow statements on a monthly and quarterly basis. Financial data storytelling is transforming those financial statements into a comprehensible narrative that properly depicts where the company is now—and how it can improve moving forward.
In theory, the CFO as a storyteller sounds great. However, when you’re constantly under pressure to keep financial reporting processes up to date in order to keep board members, investors, the leadership team, and other stakeholders informed about the data, adding storytelling to your to-do list may seem impracticable (if not altogether impossible). Still, CEOs need you to find a way to make it work so that the two of you can collaborate on strategic challenges to drive the company towards further gains.
There are three things you can do to move your focus away from backward-looking financial reporting and toward forward-looking strategic insight.
- Automate as much data collection as possible. Complex data collecting often distracts CFOs from focusing on the “why” behind the figures. You don’t have much time left to translate the numbers into business insights if you’re spending weeks every quarter manually gathering financial data from your customer relationship management (CRM) system, enterprise resource planning (ERP) tool, HR system, billing systems, and other business tools. To free up time to focus on the narrative, automate the collection of financial data.
- Move away from spreadsheet-based financial models. Spreadsheet-based financial models aren’t flexible enough to keep pace with business change. CEOs need their CFOs to be a candid voice of reason in the business. Analyze your financial data to proactively detect business issues that could have a short- and long-term impact on your company. Data storytelling helps you communicate your problems to the CEO so that you can collaborate on solutions.
- Focus on visualizing the data. Financial updates based on balance sheets and income statements are not required (or desired) by CEOs and others on the management team. They need a more visual method of quickly consuming and comprehending data. Use data visualization and collaboration tools to shift focus from reporting on the numbers to telling stories about key metrics.
Use Storytelling to Become the Partner CEOs Need
Storytelling is a fundamental ability that CFOs can utilize to build strong partnerships with their CEOs. When you can go beyond standard financial reporting to clearly communicate the story behind your numbers, you put yourself in the best position to deliver what modern CEOs want from a CFO partnership.
By focusing on data storytelling, you will be able to:
- Assume the role as a strategic advisor. CEOs need their CFOs to establish close working relationships with leaders across all business departments. It will be easier to collaborate on strategic issues if the numbers are translated into narratives that those leaders can comprehend. Become a true strategic partner by analyzing financial data to gain crucial business insights about your customers, market opportunities, and operations.
- Challenge the status quo. CEOs need their CFOs to be a candid voice of reason in the business. Analyze your financial data to proactively detect business issues that could have a short- and long-term impact on your company. Data storytelling helps you communicate your problems to the CEO so that you can collaborate on solutions.
- Build trust with key stakeholders. CEOs and CFOs need to present a united front for key stakeholders. Whether you’re a public company providing earnings guidance for investors or a private company getting ready to provide a board meeting update, CEOs need their CFOs to have strong communication skills. CFOs are in a unique position to turn numbers into narratives that inspire trust among key stakeholders.
A good relationship with your CEO (and the rest of the leadership team) is built on a common language. You may feel most at ease when working with spreadsheets and numbers. However, you must interpret the figures into a language that others may comprehend.
CEOs expect more than ever from their CFO partnerships—and data storytelling is the key to meeting those expectations.