TAKEAWAYS
Intuitively, the role of finance professionals is to produce accurate financial numbers. However, financial numbers on their own rarely drive decisions. Board directors and management of organisations make decisions only when they understand the meaning and impact behind those numbers. Hence, it is incumbent upon finance professionals to also appropriately communicate substantially meaningful messages about those numbers to their stakeholders, to facilitate sound decision-making.
As a seasoned finance leader and former Chief Financial Officer (CFO) with over 30 years of cross‑industry experience, Madam Zulaifah Abdul Ghani, Founder of Cognitio Forge, a Singapore-based boutique advisory and leadership development firm, could not agree more. “Over time, I realised my real job was to help people understand what those numbers meant and what actions they needed to take. I evolved from being a finance specialist to a strategic communicator,” she reveals.
For Madam Zulaifah, communication is not merely a good-to-have soft skill at the workplace. “I see communication as one of the most important skills for any CFO because our role is not just to report on financial performance, but to help people understand what the numbers are telling us about the future,” she opines.
Notwithstanding the significance of communication, finance professionals arguably do not appear to have a good grasp of it. Often, they become so overly engrossed in their own finance jargons, accounting treatments and technical standards that they forget one critical factor – their stakeholders may not be financially savvy or familiar with accounting concepts. This results in the wrong “language” being used in their communication with the stakeholders.
On the one hand, stakeholders crave simplicity and clarity. On the other hand, finance professionals overwhelm them with data that they are not interested in. Stakeholders usually want to know the business impact: What does it mean for the business? What are the risks and opportunities? What actions should we take? As such, the job of finance professionals is essentially to make complex information simple, relevant and actionable for their stakeholders.
Madam Zulaifah recalled an instance where a board was struggling to understand a financial presentation that was highly detailed and technical, with excellent graphics. Although the information presented was factually correct, the key messages were not getting across to the board. It became so bad for the board that they refused to hear out the entire presentation.
After she stepped in and redesigned the presentation into a much cleaner and simpler format, the response was immediate. More constructive discussions materialised and decision-making became much faster as a result. “The lesson for me was simple: Know your audience, simplify the message and focus on outcomes. Be very aware of information overload,” she states.
To effectively translate financial data into strategic narratives for non-finance stakeholders, Madam Zulaifah uses a simple framework featuring context, insight and action.
The first course of action is to establish the context. She will draw information from what is happening in the business environment of the organisation. This sets the background for the financial data. Second, she will provide insights into the financial data. This entails highlighting the salient points behind the numbers and their impact on the organisation. Third, she will recommend actions to tackle the problem areas identified from the insights.
In addition, she will focus on tangible outcomes, such as higher productivity, increased efficiency and cost savings, which will enhance the credibility of the narrative. She will also talk about topics like growth, profitability, customer impact, risks and opportunities, which are pertinent and of interest to stakeholders.
With this approach, the stakeholders can better appreciate the story behind the numbers and consequently, they will become much more engaged and confident in making decisions.
To better structure the communication, and given the very short attention span of a target audience, Madam Zulaifah suggests starting with the core message, and then supporting it with robust corroborative evidence. Furthermore, she concentrates on executive presence during her presentations. “Communication is not only about slides, it is about confidence, clarity and the ability to engage your audience in a meaningful conversation,” she emphasises.
Undoubtedly, finance professionals need to strengthen their communication skills in order to further their contributions to their organisations. For a start, they should move away from the mindset of simply reporting accurate data to one of narrating a relatable, clear and impactful story with data. They have to think beyond reporting and zoom in to explaining the business implications of the numbers, to help drive their organisations forward.
Additionally, finance professionals should seek opportunities to be more involved in business discussions outside of the finance scope of work. This will be beneficial because, with a broader understanding of the business context, they will be able to better tailor their communication according to their stakeholders’ needs.
With an increasingly uncertain global business environment and rising stakeholder expectations, organisations will value finance professionals who can transform complicated financial data into easy-to-understand information for non-finance stakeholders. They will be the ones who can convert data into insights, insights into action, and action into sustainable value.
Not only will finance professionals who can communicate effectively influence decisions, they will also help shape the future direction of their organisations.
Mdm Zulaifah will be providing more guidance on how finance professionals can become better communicators of financial information.
Tune in to the upcoming CA Listen Sparkling Conversations podcast in September.
