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Full Description
Practical guide to effectively communicate financial data, ideas, and insights to executives
Communicating Financials to Executives delivers indispensable insights on how to clearly, effectively and productively communicate financials to executives across industries in an influential manner. In this book, finance practitioners and consultants Anders Liu-Lindberg and Christian Frantz Hansen deliver a five-step approach on how to get started, along with underlying theory explaining why each step is imperative to success.
Special attention is placed on not just presenting data but doing so in a way that brings significant value to the table and creates an impact that leads to greater business success for the organisation. Topics explored in this book include:
The executive decision-making process and how to tailor your approach to seamlessly integrate into it
Managing the amount of detail in communications and knowing how to structure data appropriately
Visual elements that can help better communicate data to individuals who aren't "numbers people"
Specific struggles that financial and accounting professionals face in the modern business environment
How to build management reports that are easily understood by executives and drive significant business value
Communicating Financials to Executives earns a well-deserved spot on the bookshelves of all finance professionals seeking to better harvest the fruits of their labour by properly articulating ideas and insights to decision-makers within an organisation.
Contents
Author Biographies xi
Preface
Our Experience with Financial Communication xiii
Chapter 1 Why Financial Communication to Executives Requires Special Attention 1
The Pressure Is Mounting on Executives 3
Insight x Influence = Impact 4
The Purpose of Finance 7
The Value of Finance 10
The Intrinsic Motivation for Finance Professionals 12
The Job Is on the Line 14
All We Need Is a Framework for Financial Communication 15
Chapter 2 The Struggles of Finance Professionals To Communicate Financials 17
The Three Main Challenges 19
Sharing Too Many Details 21
Having No Consistent Structure 23
Making No Apparent Recommendations 26
Chapter 3 Five STEPS FOR COMMUNICATING FINANCIALS To Executives 31
Take a Customer-Centric Approach 33
From Data to Insights 36
Five Steps for Financial Communication to Executives 38
Info 39
Insights 41
Recommendation 42
Evidence 44
Action 46
Sarah Gets to Know Her Customers 47
Chapter 4 Step 1: Information: What Is the Financial Status? 51
Define an Objective and Target Stakeholder 52
Consider Your Audience 55
Data Extraction: Access Relevant Data Sources 57
Data Preparation: Build on a Proper Foundation 59
Master Data Management 59
Data Cleaning 60
Chart of Accounts and Financial Statements 62
Data Analysis: Extracting Relevant Insights 63
Horizontal Analysis 64
Vertical Analysis 66
Variances and Deviations 69
Using Technology to Your Advantage 70
Data Selection: Present Only What Matters 72
Moving from Information to Insights 75
Sarah's Data Struggle 76
Chapter 5 Step 2: Insights: What Are the Key Attention Points? 79
What Is an Insight? 80
Cater to Your Audience 85
Empathy: Present Insights Relevant to Your Stakeholders 86
Verify Your Understanding 90
Acknowledge Personality Types 91
Types of Analytics 93
Tips on How to Communicate Your Insights 99
Tip 1: Golden Rule of Three 99
Tip 2: Curate Based on Criteria 101
Tip 3: Do not Just Summarize - Synthesize 104
Moving from Insights to Recommendations 106
Sarah Uncovers the Root Causes of Poor Revenue Performance 108
Chapter 6 Step 3: Resolution: What Can We Do About It? 113
Distinguish Between Output and Outcome 115
Dare to Have an Opinion 118
Leverage Structured Problem-Solving 120
Define the Problem 121
Disaggregate the Problem 124
Design the Solution 128
Tips for Making a Recommendation 129
Prototype - Make Your Solution Visible 129
Present Options - There Is Never Just One Solution Option 130
Anticipate Objections - Be Ready with a Reply 131
Supporting Your Recommendation with Arguments 132
Sarah Ideates Potential Solutions 132
Chapter 7 Step 4: Argumentation: Why Is This a Good Idea? 137
The Difference Between Argument and Facts 138
Facts: The Foundation of Trust 138
Arguments: The Art of Persuasion 139
The Interplay of Facts and Arguments 140
The Magic Number of Three: Why Three Arguments Are Ideal 142
The Psychology Behind the Number Three 143
Three Arguments to Convince Management 144
Expanding the Definition of Facts Beyond Numbers 146
Expert Statements 146
Customer Testimonials 147
Industry Research 148
Integrating Non-Numerical Facts with Financial Data 149
The Importance of Selectivity 150
Why Selectivity Matters 150
How to Select the Right Three Arguments 151
From Argument to Decision 153
Sarah Backs Up Her Recommendation 153
Chapter 8 Step 5: How Do We Get Started? 157
Summarize and Ensure a Common Understanding 157
Anticipate Change Resistance 158
The SCARF Model - Sources of Change Resistance 159
Pave the Way Forward 163
Insist on a Decision: Turning Discussion into Action 166
Getting Started with the New Sales Channel 169
It's Time to Present 171
Chapter 9 Considerations on Data Visualizations 175
Make It Easy to Decode Your Key Message 177
System 1 and System 2 Thinking 180
Designing for System 1: Presenting Insights Clearly and Effectively 181
Engaging System 2 When Necessary 182
Minimizing Cognitive Load 182
A Picture Is Worth a Thousand Words 183
The Split-Attention Effect 185
Pre-Attentive Attributes and Gestalt Principles 186
Pre-Attentive Attributes: Highlighting the Key Message Instantly 187
Gestalt Principles: Organizing Information for Better Understanding 188
Tips for Better Data Visualization 189
Tips for Great Slide Making 196
Place the Argument in the Header 198
Use Action Titles in the Header and Charts 198
Stick to One Key Message per Slide 198
Present Only Evidence Supporting the Argument (in the Header) on the Slide 199
State Your Sources 199
Use Call-Outs to Highlight Key Points 199
Use Colours to Make Charts Easy to Read 200
Use Large Readable Fonts 200
Chapter 10 How to Prepare the Perfect Management Report 201
Structuring Your Management Report 203
A Mock-Up of the Perfect Management Report 206
Chapter 11 How Finance Professionals Become Excellent Communicators 217
Without Using SCQA 220
With the Use of SCQA 221
Business Cases 222
From Analysis to Presentation 223
One Size Does Not Fit All 226
Final Tips on Communication 228
Before the meeting 228
At the meeting 229
After the meeting 230
Chapter 12 Practical Steps to Start Improving Your Communication Skills 233
Taking the First Steps 235
Comparison and Feedback 235
Ask Your Audience 236
Prepare Your Mock-Up 236
Implement and Continuous Improvement 237
The Next Steps 238
Awareness 239
Desire 239
Knowledge 239
Ability 240
Reinforcement 240
From Steps to a New Company Culture 241
It Is Time to Get to Work 243
References 245
Index 249
