Why finance chiefs need storytelling skills in a crisis
The requirements of an effective CFO used to be fairly straightforward: be good at managing capital by means of your hard-earned accounting knowledge and administrative expertise. But so much has changed in recent years that these traditional skills alone may no longer guarantee C-level success.
Today’s businesses want technologically adept finance chiefs who can bring both technical proficiency and highly developed interpersonal skills to the table. They must serve as internal statespeople, engaging with other senior executives to form a cohesive leadership team that can navigate the business through any adversity it may encounter
When livelihoods are at stake, the finance function can become a beacon for employees who are worried about the future. This means that its leader must have the emotional intelligence to manage effectively upwards, downwards and sideways.
Adrian Talbot is global CFO of PR company Hotwire Global Communications and acting managing director of Hotwire UK. He stresses that “CFOs need to step up, be noticed and communicate even more in uncertain times. Being inaccessible will only encourage more uncertainty and, potentially, even panic. If the finance executive is nowhere to be found, the situation must be bad.”
An extended period of adversity for several sectors has served to increase the CFO’s influence. A 2022 survey of non-financial executives and managers by Oracle, for instance, found that 87% of respondents considered the finance function to be more important that it had been before the pandemic.
As the function’s importance to other departments increases, the finance chief must spend more time engaging more widely with the business.
Be clear about the challenge
Establishing a rapport with the rest of the organisation is a very different experience from that of communicating with the CFO’s traditional audience in the investment community. It’s likely to require simplifying certain messages to help everyone in the business comprehend how it’s planning to weather the storm.
This task can prove more complex than it might at first seem, according to Eliran Glazer, CFO at project management specialist monday.com.
“The unpredictable economic climate brings with it a unique opportunity to take a new and active role in internal communication,” he says. “When discussing finance, it’s crucial that CFOs set realistic expectations while also speaking clearly and breaking down concepts so that they’re well understood throughout the company.”
Mike Winn, CFO at digital marketing specialist MVF, agrees. He would advise any finance chief to “ensure that you’re telling a clear story that resonates with people outside the finance team. Sharing a balanced view of any headwinds and what the business is doing to counteract them is better than painting a wholly positive picture that wouldn’t ring true in this climate.”
The CFO as narrator
When finance chiefs are forming their internal communication plans, they must focus not only on what information they’re going to share but also on how they’ll deliver it. Nadine Pichelot, senior VP of finance at software developer Anaplan, believes that CFOs need to become storytellers, finding a way to deliver a narrative behind the numbers in a way that’s fair to their audience.
“There’s a delicate line to walk between sharing numbers on a slide and opening the books to every interested party. Start by taking stock of the questions that employees want addressed; determine what can and can’t be shared; and identify ways to prepare the audience for what’s to come,” she advises.
This may require the use of infographics, videos or other less familiar formats to support a presentation. It may also entail handling potentially impactful data, such as which projects are most at risk and what’s likely to happen to the share price if they do get scrapped.
“You may not be able to answer every question right now, but you can use data to inform a more open and accessible conversation with employees about what the future could hold,” Pichelot says.
Actions speak louder than words
How a CFO conducts themselves from day to day inside the organisation also has a huge impact on confidence among the workforce. A finance chief’s general demeanour and interactions with other employees can convey a stronger message than anything they might say during formal update sessions.
“CFOs should be transparent and approachable,” Talbot says. “Respect comes naturally with the job, but you’ll get much more of that if you participate in daily activities and establish a solid reputation.”
Enabling employees to get to know you means that, when the time comes to break bad news, you already have a solid foundation of trust on which to build.
“To strike the right tone, simple statements are often best to reassure people, providing that these cover all the facts,” Talbot says. “And body language is important. Many people won’t pay attention to everything that’s said, but they will observe how composed and confident – or otherwise – you seem.”
Know when to hold ’em
Eamonn Quinn, founder and managing partner of the Board Matters International consultancy, would advise finance chiefs never to shoulder the communications burden alone. Moreover, he stresses that “it is not, nor should it be, the CFO’s initial job to be the central internal comms hero. It’s entirely up to team leaders to be clear with their communications, with support from the CFO as necessary.”
There is a much better case for the finance chief to partner with the internal communications team after the announcement and implementation of a restructuring plan, he argues.
“The CFO can be clear on that plan, what it requires and how the organisation is measuring up to it, then help those team leaders answer the key questions that their staff may have,” Quinn says.
The new corporate ‘power couple’
More and more CFOs are indeed working closely with their firms’ internal comms chiefs to shape and deliver their messages.
These specialists can be “pivotal in advising the finance chief how to pitch their speech at the right level”, says Annalise Silver, head of internal communications at MVF. “Cool, calm and collected finance types sometimes appear to speak another language when it comes to their area of expertise.”
Developing a good working relationship with the internal comms chief may even prove a wise career move for a CFO.
“For those finance chiefs who didn’t take the chance to assume a more vocal role when Covid-19 struck, the perma-crisis we’re now stuck in offers the perfect opportunity for them to provide some calm in the storm,” Silver says.