Communicating Financials to Executives

Anders Liu-Lindberg is a finance practitioner and consultant who trains accounting and finance professionals to better influence and communicate with executives. He’s a Partner and co-founder of the Business Partnering Institute. Christian Frantz Hansen is a Partner and Head of Learning and Development at the Business Partnering Institute. He operates learning and development programs to upskill finance professionals to become more impactful finance business partners.

• Author Biographies xiPrefaceOur Experience with Financial Communication xiiiChapter 1 Why Financial Communication to Executives Requires Special Attention 1The Pressure Is Mounting on Executives 3Insight × Influence = Impact 4The Purpose of Finance 7The Value of Finance 10The Intrinsic Motivation for Finance Professionals 12The Job Is on the Line 14All We Need Is a Framework for Financial Communication 15Chapter 2 The Struggles of Finance Professionals To Communicate Financials 17The Three Main Challenges 19Sharing Too Many Details 21Having No Consistent Structure 23Making No Apparent Recommendations 26Chapter 3 Five STEPS FOR COMMUNICATING FINANCIALS To Executives 31Take a Customer-Centric Approach 33From Data to Insights 36Five Steps for Financial Communication to Executives 38Info 39Insights 41Recommendation 42Evidence 44Action 46Sarah Gets to Know Her Customers 47Chapter 4 Step 1: Information: What Is the Financial Status? 51Define an Objective and Target Stakeholder 52Consider Your Audience 55Data Extraction: Access Relevant Data Sources 57Data Preparation: Build on a Proper Foundation 59Master Data Management 59Data Cleaning 60Chart of Accounts and Financial Statements 62Data Analysis: Extracting Relevant Insights 63Horizontal Analysis 64Vertical Analysis 66Variances and Deviations 69Using Technology to Your Advantage 70Data Selection: Present Only What Matters 72Moving from Information to Insights 75Sarah’s Data Struggle 76Chapter 5 Step 2: Insights: What Are the Key Attention Points? 79What Is an Insight? 80Cater to Your Audience 85Empathy: Present Insights Relevant to Your Stakeholders 86Verify Your Understanding 90Acknowledge Personality Types 91Types of Analytics 93Tips on How to Communicate Your Insights 99Tip 1: Golden Rule of Three 99Tip 2: Curate Based on Criteria 101Tip 3: Do not Just Summarize – Synthesize 104Moving from Insights to Recommendations 106Sarah Uncovers the Root Causes of Poor Revenue Performance 108Chapter 6 Step 3: Resolution: What Can We Do About It? 113Distinguish Between Output and Outcome 115Dare to Have an Opinion 118Leverage Structured Problem-Solving 120Define the Problem 121Disaggregate the Problem 124Design the Solution 128Tips for Making a Recommendation 129Prototype – Make Your Solution Visible 129Present Options – There Is Never Just One Solution Option 130Anticipate Objections – Be Ready with a Reply 131Supporting Your Recommendation with Arguments 132Sarah Ideates Potential Solutions 132Chapter 7 Step 4: Argumentation: Why Is This a Good Idea? 137The Difference Between Argument and Facts 138Facts: The Foundation of Trust 138Arguments: The Art of Persuasion 139The Interplay of Facts and Arguments 140The Magic Number of Three: Why Three Arguments Are Ideal 142The Psychology Behind the Number Three 143Three Arguments to Convince Management 144Expanding the Definition of Facts Beyond Numbers 146Expert Statements 146Customer Testimonials 147Industry Research 148Integrating Non-Numerical Facts with Financial Data 149The Importance of Selectivity 150Why Selectivity Matters 150How to Select the Right Three Arguments 151From Argument to Decision 153Sarah Backs Up Her Recommendation 153Chapter 8 Step 5: How Do We Get Started? 157Summarize and Ensure a Common Understanding 157Anticipate Change Resistance 158The SCARF Model – Sources of Change Resistance 159Pave the Way Forward 163Insist on a Decision: Turning Discussion into Action 166Getting Started with the New Sales Channel 169It’s Time to Present 171Chapter 9 Considerations on Data Visualizations 175Make It Easy to Decode Your Key Message 177System 1 and System 2 Thinking 180Designing for System 1: Presenting Insights Clearly and Effectively 181Engaging System 2 When Necessary 182Minimizing Cognitive Load 182A Picture Is Worth a Thousand Words 183The Split-Attention Effect 185Pre-Attentive Attributes and Gestalt Principles 186Pre-Attentive Attributes: Highlighting the Key Message Instantly 187Gestalt Principles: Organizing Information for Better Understanding 188Tips for Better Data Visualization 189Tips for Great Slide Making 196Place the Argument in the Header 198Use Action Titles in the Header and Charts 198Stick to One Key Message per Slide 198Present Only Evidence Supporting the Argument (in the Header) on the Slide 199State Your Sources 199Use Call-Outs to Highlight Key Points 199Use Colours to Make Charts Easy to Read 200Use Large Readable Fonts 200Chapter 10 How to Prepare the Perfect Management Report 201Structuring Your Management Report 203A Mock-Up of the Perfect Management Report 206Chapter 11 How Finance Professionals Become Excellent Communicators 217Without Using SCQA 220With the Use of SCQA 221Business Cases 222From Analysis to Presentation 223One Size Does Not Fit All 226Final Tips on Communication 228Before the meeting 228At the meeting 229After the meeting 230Chapter 12 Practical Steps to Start Improving Your Communication Skills 233Taking the First Steps 235Comparison and Feedback 235Ask Your Audience 236Prepare Your Mock-Up 236Implement and Continuous Improvement 237The Next Steps 238Awareness 239Desire 239Knowledge 239Ability 240Reinforcement 240From Steps to a New Company Culture 241It Is Time to Get to Work 243References 245Index 249