Communicating Financials to Executives

Chapter ThreeFive Steps for Communicating Financials to Executives

We have covered why financial communication to executives requires attention and what challenges finance professionals currently face in doing it well. Now, we will introduce a five-step framework for communicating financials to executives. As mentioned, the framework builds on the Pyramid Principle by Barbara Minto. The overriding principle is that good communication is less about being an actor on stage, a journalist who can snoop up a story or creating brilliant slides. It is more about using a logical structure that catches the attention of the audience by focusing on issues that are important to them.

This is good news for finance professionals because we are good at that. For instance, our financial statements are built on logical structures, and if we boil it down, you could argue that everything we do in business ends up as a debit or a credit, logically balanced and in a complete presentation of financials. The challenge we have discussed is that this is not how to present the financials to non-financial executives. They will appreciate that everything balances, but they rely on us to be on top of that while they steer the business.

Instead, they need insights from us to make better decisions. It cannot just be any insight, though, as it needs to be insights that are relevant to the challenges they are currently working through. Otherwise, you will not catch their attention and quickly be shown the door. ...