Going beyond the numbers to shape a powerful narrative with your data is an important skill for finance leaders to master.
If you start thinking about the world’s best storytellers, you’ll probably lean towards the Shakespeares, Spielbergs and Springsteens of the world. But what about Agile CFOs? They’re pretty savvy storytellers too.
When it comes to running a business, strategic decisions are always driven by data. And as every organization’s data analytics maestro, it’s the CFO’s job to uncover the story behind that data. Agile CFOs, though, take this a few steps further: They’re constantly challenging business plans, leading through change with confidence, fostering company-wide teamwork and telling the story beyond the bottom line. Agile CFOs enable timely, data-driven business planning with the right tools for the job. They’re the driving force behind the company’s plan to grow.
Looking for more Agile CFO insights? Check out PlanToGrow.com and watch the free, on-demand talk, “7 Principles of the Agile CFO.”
Consolidating your financials and reporting the numbers is one thing, but shaping a powerful narrative to drive informed decision making across the business is another. Agile CFOs don’t just deliver the what, they also deliver the why behind every number and every business plan. It’s called data storytelling—and it’s a skill every finance leader should practice.
In this blog post, you will learn:
- What data storytelling in finance looks like
- Why data storytelling is important for finance leaders
- How to master data storytelling for finance-led business planning
What Is Data Storytelling?
Data storytelling is a creative way of consolidating, analyzing and presenting important data in a format that’s easy to understand. In finance, data storytelling complements FP&A processes, such as budgeting, forecasting and financial reporting, by providing legitimate context and reasoning behind the reported figures. It helps CFOs turn numbers into narratives with input from every arm of the company, ultimately resulting in a more strategic, reliable and well-informed business planning process.
Why Is Data Storytelling So Important?
Data storytelling is crucial because it helps you make a business case for financial decisions. It also allows you to contextualize and justify financial results. When a company needs to take a necessary action, data storytelling is how Agile CFOs identify, plan for and communicate the path forward to the rest of the company.
Let’s say, for example, that you need to implement a hiring freeze in a recession or make a substantial investment in product development to compete with larger competitors. Data storytelling allows you to clearly communicate the projected result of that decision—both financial and non-financial—and align stakeholders across the company on business objectives moving forward.
Another example could be if your business overspent on sales and marketing. Data storytelling is how you articulate: Were our quotas too low? Is our advertising budget too high? What really happened here and how can we fix it? Data storytelling puts it all into perspective and that’s why it’s so important for successful finance-led business planning.
Top 3 Data Storytelling Best Practices
With business conditions evolving as rapidly as they are these days, planning for the future of your company means having to make a lot of quick decisions. Now more than ever, you need to know how the choices you make today will influence the bottom line tomorrow. It makes insightful data storytelling an even bigger priority, which is why Agile CFOs use integrated planning tools to do it well.
Make sure you follow these three best practices so you can master data storytelling at your organization:
1. Visualize Your Data With Business Intelligence Dashboards
Many people are visual learners by nature and that’s why dashboards are such an essential aspect of data storytelling. When configured properly, dashboards can be used to visualize a range of metrics and KPIs from across your business. They can include graphs, charts and scorecards that bring your financial and non-financial data to life.
Given how simple they typically are to read, dashboards make it easy to align your numbers with compelling narratives. A recent survey from BPM Partners suggests they’re growing in popularity too, and for good reason. Well-built dashboards allow you to:
- Measure real-time performance trends and identify opportunities for improvement
- Benchmark important KPIs and track results against those benchmarks over time
- Identify relationships between metrics and report what those mean for your business
- Provide key stakeholders with a visual guide to their reported numbers
- Ensure transparency, accountability and engagement across the organization by showing employees how their efforts are moving the needle
Every company’s business intelligence strategy is different, and there’s no one right or wrong way to set up your dashboards. It all depends on the story you’re trying to tell, so make sure you build the dashboards you need to tell that story effectively.
Check out this dashboarding guide to learn more about how to tell powerful stories with your numbers and guide your business forward with confidence.
2. Eliminate Data Silos So You Can Tell the Whole Story
Data storytelling in finance is about more than just revenue and profit margins. In order to tell a complete story with your numbers and convey their impact on the entire business, you need to weave cross-functional operations data into the narratives you build as well.
Consider this example: Your company is preparing to launch a new flagship product offering. You’re adjusting your budgets and forecasts and planning for some additional revenue. In addition to the bottom-line projections, the story you tell in your management reporting or your board meeting should answer the following questions:
- How will this affect headcount? Will we need to hire more staff to accommodate higher revenue targets?
- If the product launch doesn’t generate as much interest as we expect it to, do we still have enough active deals in our sales pipeline to meet our goals?
- Is our infrastructure equipped for a more rigorous production schedule? Will we need to invest in a new facility?
The answers to those questions shape the narrative you’re trying to develop here, but the specific data you need might not be easily accessible. If critical data is siloed in multiple disparate source systems—such as your ERP/GL, CRM, HRIS and fixed asset tracking system—you’ll have to hunt down numbers manually which is tedious and prone to error. It makes agile, data-driven storytelling a lot more difficult to do.
That’s where integrated planning tools come in. With one centralized platform that connects your existing data sources, you can eliminate data silos and build a single source of truth your entire company can trust. Not only will you save time, but your cross-functional stakeholders will also find it easier to participate in the strategic planning process—ultimately resulting in more reliable business narratives that tell the entire story.
Discover how to integrate your data sources for faster, smarter and more efficient data storytelling from a single source of truth.
3. Know Your Audience & Inspire Them To Take Action
“People hear statistics, but they feel stories.”
Those are some wise words from Brent Dykes, a frequent Forbes contributor and author of Effective Data Storytelling. The statement addresses exactly why data storytelling is so powerful: It evokes emotion, inspires action and drives positive outcomes for your business. It’s about rallying your colleagues and planning as a team after drawing them in with a story. After all, people tend to perform better if they know their role in your company’s narrative and can feel the impact of their contributions.
That’s why you need to shape stories that appeal to the audience you’re trying to engage. Not everybody is motivated by numbers alone, and Agile CFOs understand this better than anyone. Let’s say, for example, that you’re reporting on a major loss that wasn’t in your quarterly plan. You can’t just send around the same spreadsheet and simply say, “there are the results.” If you want to inspire action, you’ll have to tailor the story purposefully so every department understands how to respond.
Sales leaders in this case might need a forecast update so they can realign targets with their team. Operations teams might want a detailed breakdown of transactional data to ensure that nothing was overlooked. Investors will want to know if your three-year plan is affected, and HR leaders will want a heads up if they need to prepare for layoffs. Now, instead of just reporting the numbers, you’re shaping an actionable narrative driven by legitimate financial data. And like any good story, it’s all about the delivery—you need to be clear, assertive and personable so your message doesn’t get lost in the fold.
As you continue to tell stories with your data and plan for today and tomorrow, ask yourself:
- What am I trying to achieve with this narrative? What action do I want to drive?
- How can I tell this story in an empathetic way that resonates with my stakeholders?
- What’s important to my audience and how does this story address that?
By answering those questions daily and following the best practices above, you’ll master data storytelling and be able to better support agile, finance-led business planning. And with the right tools at your disposal, including dashboards and integrated planning solutions, uncovering the narrative behind your numbers will be a breeze. Data-driven storytelling will grow into a standard process for your finance team as you continue to navigate change and plan for the future of your business.
Learn more about how you can quickly get started with data storytelling, or talk to a Vena FP&A expert 1:1 to help you plan for today and tomorrow.