Earlier this month I heard Steve Player detail his “Seven Steps to FP&A Success” during his keynote address at Adaptive Planning‘s Roadshow event in San Francisco. As usual, Steve cultivated the crowd with metaphors and stories that covered an impressive amount of material, and there’s no way I can summarize his key takeaways in a few paragraphs. However, one of Steve’s points resonated with me so deeply that I walked away feeling strongly that communicating numerical information is the most critical skill for finance professionals.
Below is a slide that Steve showed during his keynote, featuring a set of numbers in columns. He used the image to astutely point out that many of us in finance present information this way:
He joked about needing to get reading glasses as we get older, but there was something actually quite serious here that really touched a nerve. At this moment in Steve’s presentation, I recalled my days as a young financial analyst. My boss said, “your analysis is too detail-oriented, you need to see the big picture.”
I learned that the management team wanted me to be detail-oriented, but they didn’t want me to communicate all the details. They wanted me to tell the story — to better communicate insights — rather than simply provide updated data.
Steve explained that, increasingly, executives want finance teams to tell the story rather than report data. But we’re conditioned to produce financial reports in columns. I suspect management perceives many of us as “too-detail oriented” when we present or email reports that don’t tell a story. While most of us are taught how to treat deferred revenue and get the balance sheet to balance, most of us have little or ZERO training on how to package the analysis into an actionable story.
Steve gave me a moment of clarity: No matter how accurate our numbers or insightful the analysis, executives and operational leaders are unlikely to take action based on columns of numbers. In order to inspire a data-driven, decision-making culture, finance personnel may be able to make the most impact when get out of the details and tell the story.
I learned that the management team wanted me to be detail-oriented, but they didn’t want me to communicate all the details. They wanted me to tell the story — to better communicate insights — rather than simply provide updated data. — Ben Lamorte
I was lucky enough to have dinner with Randall Bolten in Palo Alto a couple of years ago. Randall articulated how subtle changes in the way we present numerical data can have huge impacts. His passion and sharp intelligence reminded me of Jeff Goldblum’s portrayal of the Chaos mathematician in Jurassic Park, and I knew Randall was onto something very important.
At the time, Randall was working on his book, Painting with Numbers: Presenting Financials and Other Numbers So People Will Understand You (John Wiley & Sons, 2012).
Randall even coined a new word, “Quantation,” by merging the words “Quantitive” and “Communication.” Here’s his definition: “Quantation: the act of presenting numbers, such as financial results, electronically, or in written form for the purpose of informing an audience.”
Bolten felt so strongly that presenting quantitative information as a communication skill unto itself was so important, that he added a new word to the English language.
This book is a MUST READ for any FP&A professionals interested in improving their communication skills. Here’s a preview.
As far as I know, the Association for Finance Professionals (AFP) offers the only certification for “FP&A”. Part 1 of the exam is entitled Financial Acumen: Gathering, Interpreting, Understanding and Communicating Business and Financial Information.
Assuming we gather, interpret, and understand financial information, the manner in which we communicate this information will impact how we are perceived within our organizations, and the extent to which executives and operational leaders will take action based on your work.