Data storytelling is one of the key skills for success in today’s data-rich world—and it’s an especially important skill for CFOs, who touch so many aspects of a business, to learn.
“Data is one of the most important currencies for all organizations,” said Chris Ortega, CEO and founder of fractional CFO and advisory services firm Fresh FP&A.
“Companies that are able to leverage data to drive actionable insights,” he said, have a competitive advantage.
But CFOs need to do more than just gather and present data if they want to help companies act on it. They need to be able to weave that data into compelling narratives.
“Getting that higher-level view to look at the data to drive action…is a real future skill set that a lot of finance professionals need to be developing,” Ortega said. “Translating data to action and connection is, I think, going to be a superpower of the future.”
But becoming a successful data storyteller requires developing skills that may be outside many CFOs’ comfort zone, such as structuring tales, influencing, conveying emotion and authenticity, and empathizing with an audience. And, odd as it may seem, they must gain a sense of when not to use data.
Ortega and Jim DeLoach, founding managing director of consulting firm Protiviti, shared the data storytelling tactics that have worked for them with CFO Brew.
Relate to your audience. Ortega once needed to discuss customer segmentation with a CEO of a women’s apparel and sneaker company before it launched its first retail store. The CEO didn’t have a strong finance background, and Ortega knew that throwing a lot of data and jargon at him would overwhelm him. So he began with an analogy, telling the CEO to think of his total addressable market as an iceberg and the ideal customer profile as a smaller lake. Once he saw that the CEO had grasped the concept, only then did Ortega introduce data about the retail market, the consumer price index, and so on.
For Ortega, that illustrated the importance of understanding an audience. “I think a lot of times, finance people go find really great data, but they have a really hard time translating that to the person that they’re talking with,” Ortega said. “You have to speak the other stakeholder’s language.”
In his experience, effective CFOs get to know their audiences as best they can to tell better stories. “[Gain] an understanding of the business partners’ pains, frustrations, opportunities,” he said. “Learn what keeps them up at night.”
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Trigger emotions. The challenge for finance professionals, DeLoach said, is to find the story within their data, and to have that story “build an emotional attachment” with an audience. Entry points to that story might include customer, employee, or stakeholder experiences, or communities or markets you started, he said. “If you’re passionate about your company…you’ve got something powerful right there,” DeLoach said.
Another way to spark emotion is to use an age-old narrative tool: casting your company as a protagonist. “Nobody believes everything’s perfect,” DeLoach said. “Talk about some of the challenges you’re facing.” For example, say it’s taking a long time to get a product approved by the FDA so it can go to market, he said. Discuss that, and now “you’ve got a protagonist and antagonist in the story and people like that. It’s real,” he said.
Use data judiciously. Finance professionals often like to lead with data, but that’s not always the best approach, according to DeLoach. Imagine listening to a baseball game on the radio where all the announcer did was recite facts and figures without telling you what was happening on the field, DeLoach said. That’s the effect data-forward presentations can sometimes have.
Instead, “visualize what’s happening on the field”—that is, in the marketplace, DeLoach said.
“The CFO is in a world of metrics around customer experiences, loyalty, and satisfaction, etc. But there has to be a compelling story as to what really differentiates the organization,” said DeLoach.
Think of the story as your meat and potatoes and your data as the seasoning, Ortega said. “If you go learn the business, that’s your main meal,” he said. “Now, once you have these statistics and the financial data—that’s the salt, that’s the pepper, that’s the little garlic you want to add on top of that meal. Now you’re ready to serve the full plate to a stakeholder.”
Don’t get too caught up in visualizations. Visualizations, too, should work in service of a story and not dominate it. “Visualizations should cause an emotion,” Ortega said. “A lot of CEOs, business owners, and founders that we work with have a dashboard, but it’s not driving action.” Visualizations, he said, should function like a stoplight prompting the audience to do one of three things: stop (red light), continue (green light), or reassess (yellow light) something that they are doing.