By Andy Burrows
We hear quite a bit about storytelling in Finance these days. And it can seem like quite an intimidating concept for accountants.
“I got into accounting because I’m a numbers person! Now you’re telling me I have to be a novelist too!!!?”
So my aim here is to take some of that fear away for you and make it easier.
Because my belief is that storytelling is not such a new thing, as it sometimes seems.
It’s something that accountants do already, and have always done, but it simply needs developing because we don’t tend to do it very well.
What do I mean?
Well, I’ve been reflecting on the meaning of the word ‘accountant’ as someone who is employed to help the directors give an account of the owner’s assets and the success of the owner’s business.
An account, another word for which is… a story.
Accountants are trained, really, to tell the story (give an account) of how the owner’s assets are being used, and how well his/her business is performing.
So, it’s not such a new thing. Accountants have been doing this for centuries. In fact, it’s at the core of our purpose!!
And whilst I do absolutely agree that many accountants (even super cool FP&A people) are not very good at this, it’s always struck me that it’s not that far out of reach.
The trouble is that when we think of storytelling, we think we have to talk in metaphors and use flowery adjectives, and it doesn’t seem to fit very well.
But literally all we’re talking about when we talk about storytelling as a Finance professional is being able to explain why the numbers look the way they do, and to do that in an engaging way that non-Finance people understand, so that it’s possible to act on the real issues and risks.
The very simple starting point is to think in terms of ‘why’ rather than ‘what’ - always.
Try not to give facts without some indication of
Almost the first thing I got involved in when I moved from public practice to my first Finance job, in Barclays, was the monthly commentary for the management accounts pack.
And the over-riding sense I got was that the whole thing was a waste of time!
Because all they used to do was comment, for example, “distribution costs are 10% (£50k) over budget”. And I’d say to my team, “yes I already know that. I can see that! There’s big red writing in the budget variance column that says (£50k) (10%)”.
The commentary - the story – is: Why does that variance exist? What’s driving it?
Distribution costs are driven by business processes and volumes. So what is it about those processes and volumes that has resulted in us overspending the budget by so much?
And to find out why, you have to analyse a bit more, understand what is coded to distribution costs, what those suppliers are charging us for, and what drives the invoice values.
And then, since we’re thinking about a budget variance, we have to investigate whether our experience of the elements of the expenditure differ to the assumptions we made in the budget. And if so, why?
In our case, the distributors hadn’t changed their pricing or anything like that. We’d made a mistake in the budgeting. In fact, it was a Finance mistake, because we’d given the business a “cost challenge” and just lopped it off the biggest number in that product’s budget in one chunk. Now you’ve got a story to tell!
And then you find out the real reason why Finance people don’t really like it… because it gets them into political debates ...
BUT at least we’re then having a real debate about what’s really driving elements of performance!
So, firstly, ask why. And to each response ask why again. Until you feel like you see the practical, real-life, issues that are causing the numbers to look like they do.
And then secondly, explain it in a way that’s engaging. That’s probably the part we all find trickiest. So, here are a few thoughts on that:
To be engaged when listening to anything, you have to be clear why you’re listening from the start.
You have to know “why is this relevant to me? Why should I be interested?” - from the start.
So your audience has to have a reason for listening, otherwise they won’t. They’ll be texting and answering emails while you’re talking, half listening just in case you say anything controversial!
At a basic level, the audience has to feel secure, knowing where they are in your “story”. They have to be able to orientate themselves.
So, what I was always told was:
So, say at the start things like, “In this session, we’ll be looking at business financial performance for March 2023, and I want to take it in 3 parts (3 product P&Ls), then we’ll spend a few minutes on the balance sheet, and then we’ll summarise the key issues at the end."
That way, people always know where they are. If they accidentally drift for a few seconds, as soon as they tune back in, they’ll know where they are because of what you’re talking about.
In introducing the story, make sure they know there are things they’ll want to stay awake for. Tease them!
And then, for each point, make them want to know about it.
I learnt this for my blogging - hook comes first. Give people a reason to listen.
Smack them upfront with why they need to hear what you’re about to say. So, always introduce points, rather than diving in straight away.
Example: “For product 1 we have two worrying problems where I think we need more investigation, because they may indicate trends that could hurt our margins if we don’t do anything about it soon. Of course, that’s just my opinion, but I think they’re worth discussing. Problem 1 is…”
And then you tell them:
And, of course, if you feel the need, you can use some humour or some Ted Lasso or Blackadder style metaphors – “this is the stickiest situation since sticky the stick insect got stuck to a sticky bun!” Helps to keep people on your side, rather than hearing your story as a litany of judgment.
Also, using examples to prove your points is essential to storytelling, even if they’re made up!
You can try to help people to visualise what’s going on behind the numbers. Example: “To understand this problem with distribution costs more, picture the Securicor van driving up. He’s up against the deadline, which actually happens more than you’d think, and he finds that we’re still filling sacks, so half of them have to be left behind….” Etc. You get the picture.
And you won’t get any argument from the Ops Manager, because she’s the one you got the information from! Anyone from Ops will immediately recognise the scenario and then you’ll have linked it to a financial outcome.
Finally, in closing, make them want to do something about it!
Fire them up by reiterating the problems or issues that you’ve shown them, and then challenge them with how performance could improve if we fixed them. What are we going to do about it? And who’s going to take ownership?
There’s obviously more that can be said about financial storytelling.
But just remember, this is what we do! We’re giving an account – as accountants do.
The story has to be rooted in the business reasons why the numbers look the way they do.
Tell them why they need to care, use examples, and make them want to act by the end of it.
And you’ll all live happily ever after! 😉
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Qualified as a chartered accountant in the UK, Andy Burrows has worked for more than 25 years as a senior Finance professional in a variety of businesses of different sizes and sectors. He is now a popular writer in Finance and Accounting, and provides online learning and coaching to help Finance people become better at helping the businesses they work for. In 2019 he was described as one of the "Top voices on LinkedIn for Finance, accounting and FP&A".
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