Business leaders need to be able to influence and inspire multiple stakeholders if they are to succeed. Storytelling is a powerful way to get people to engage with your vision for an organisation, but the narrative you use needs to be consistent, truthful and tailored to the audience.
In a poll conducted at Criticaleye’s recent CFO Retreat, 71 percent of attendees said their stakeholder relationships were becoming increasingly complex and difficult. With customers expecting instant responses via social media channels, activist investors seeking to shape key business decisions and younger, tech-savvy employees demanding a different relationship with their employers, it’s not difficult to see why this is.
Communication frequently falls down when the message being presented isn’t appropriate to the audience. Kim Horsburgh, Relationship Manager at Criticaleye, says: “Business leaders need to think about what that particular stakeholder needs to be aware of.
“During a restructure staff will want to know if their job will be affected, whereas investors will want to understand the business and the longer-term outlook. When you’re presenting information to multiple audiences, there needs to be a single story, but the content and focus should be adapted.”
Chris Griffith, Investor Relations Director at Tesco, says: “Building relationships is a key part of communication. If you’re a CEO or CFO, you need to build credibility, and people need to know they can trust what you say and understand your style.”
There are obvious benefits to working with the same group of stakeholders over a long period of time, says Chris, although he notes that there can be a downside when the narrative needs to change. “If you’ve led the business through a tricky period, you need to think about how to re-position yourself so you’re not just the person that dealt with the profit warnings but you’re also able to tell a growth story.
“You have to be very straight, and as long as you tell the truth, generally people will have confidence in you, so then you can be the person that not only communicates the bad news but also the good.”
Delivering the Message
The ability to communicate with multiple stakeholders is a key skill for CEOs and other senior executives. Gary Browning, Board Mentor at Criticaleye and Chair of Corndel, says: “Storytelling makes complex messages simple, memorable and sticky. With a story, you paint a picture and engage with the brain in a whole different way.”
When he was Group CEO at Penna Consulting, he initially used a traditional approach to analyst presentations, discussing graphs and spreadsheets, but then he started employing stories. He explains: “When we were talking to the City, one of the key parts of Penna was the outplacement business, but that’s not commonly understood. You’d usually have to explain what you meant by outplacement, and so rather than go through a list of services I used to tell stories of how people’s lives had been transformed.”
One such story was about a senior trader who had been made redundant and was impatient for a similar banking role, despite hating the job. As part of the outplacement service provided by Penna, a career coach calmed her down and persuaded her to take the time to explore her passions in life, one of which was art. She had the idea of raising finance to purchase and then hire out top-end art, such as works by Picasso, to companies that couldn’t afford to buy them. It was an endeavour she needed the encouragement of the outplacement service to pursue. The business was a massive success and was later sold for a considerable sum.
“When you tell that story, you don’t have to explain any more about outplacement, everybody gets it instantly,” Gary says.
Malcolm McKenzie, Managing Director at Alvarez & Marsal, finds that using ‘nuggets’ or bite-sized chunks of information can be useful elements of a business story. For example, he finds nuggets “make a transformation come alive for people”.
It can be a single paragraph, says Malcolm, which details what’s altered and the benefits to the organisation, and where you are on the implementation path: “If you issue a nugget of information once a week, then over time people can start to tell that story themselves."
Michele Faull, CFO of Coventry Building Society, is currently using creative techniques to refresh her finance function. She says she’s chosen this approach because “data is processed on one side of the brain, but a story engages emotions and lights up both parts. Crafting things into a story changes the way people react".
She is 18 months into a journey to set out the purpose of the function and relate it to the building society’s mission of ‘Members First’. This can be a difficult leap for Finance, which doesn’t deal with members on a day-to-day basis.
Michele explains that the organisation’s mission means it exists to give long-term value to savers and borrowers. This involves delivering good value and being simple, transparent and straightforward to deal with. “If you translate that into what the purpose of the finance function is, then it becomes clear that Finance is there to safeguard that long-term value.
“Then you start creating a world where you can talk to your financial reporting team and say, ‘Actually, when you start producing your annual financial statements, they need to be simple, transparent and straightforward, because that’s the brand we are.’”
Emma Carroll, Senior Editor, Criticaleye.
This article was inspired by Criticaleye’s CFO Retreat 2018, which was held in association with IBM, BIE Executive and E.ON UK.
Next week’s Community Update will look at where the best CFOs add value to businesses beyond reassurance over the numbers.