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It was my first round of business reviews as the new CFO.

6 divisions down. 3 to go.

The decks? Standardized beautifully. Every divisional CFO used the same format.

The P&L bridges looked immaculate. Variances neatly lifted from the Income Statement. Just one problem: none of it meant anything.

I had no idea what was going on in these businesses.

Superficially, I knew. One was ahead of their EBIT budget but behind in revenue. Another had missed their budget because of a labor overspend. But these are things I could read myself from the monthly internal financial reports.

I didn’t know why they had performed the way they had. Or what the consequences were. Or what needed to be done next.

The narrative from the divisional heads didn’t really match the financial reporting. The financial reporting was focused on commentating against variances horizontally, P&L line by P&L line. Rather than explaining the variances by driver.

The decks were like Tom Wambsgans: tailored suit, meticulously manicured, but no substance. 

I shared my concern with the CEO (my new boss) later that day:

“There was a lot of talking. A lot of pretty slides. But did we agree on meaningful actions in any of those meetings? Can I ask you a question?”

“Sure…”

“Is current performance perfect? Are you ten out of ten satisfied?”

“No, I’m about a 4 out of 10.”

“Right. And I agree with you - performance is about a 4 out of 10. Those meetings are not driving the kind of tension we need to get that 4 out of 10 performance to an 8. What is the point of reporting the past if it’s not to drive a better future?”

He hadn’t been there long, either. He was just distracted by other fires.

We agreed that next month would be different.

Welcome to a new 4-week series on Business Performance Reporting.

Let’s start from the top.

The short answer: it’s how you know if your business is winning or not.

Longer answer: it’s the communication of how well a business is executing against its goals. Using financial and operational data to evaluate past performance, assess current status, and guide the future.

In this series we are going to focus on best practices for communicating performance internally within the business. And how to do that in a way that drives behavior towards better outcome.

This is psychology as much as it is finance: Great finance team create connective tissue between numbers and people. Reporting is one of the most crucial levers for doing that.

And to keep the scope clear, heere’s what we’re not covering:

1. Forecasting & FP&A. We will specifically focus on reporting recent past performance. That’s because (spoiler alert) next up we have a full 9-week series breaking down the whole FP&A cycle. We’ll go deep… just not in April. And in any case, great forecasting is built on solid reporting.

2. External Reporting. You know the drill - 10-Ks, GAAP, SEC, audit, lender reporting. Important, but they don’t drive performance in the way internal reporting can, so it is not what we’re here to talk about.

Reporting as Feedback Loops

The purpose of internal reporting is to create feedback loops to help the business know what to start doing, stop doing, or keep doing.

Most companies have waaaaay more ‘reporting’ then they need. Graveyards of Excel files being sent weekly or monthly to large audiences. No-one reading them. Everyone assuming someone else finds it useful.

But just because something has ‘report’ in its title, does’t make it reporting. It’s noise.

Documents alone are not reporting. They’re just corporate wallpaper.

Reporting is an ecosystem. It includes:

If a report doesn’t drive future behavior, it shouldn’t exist.

Never birth a new report unless you know exactly what feedback loop you are trying to create. And regularly re-test existing ones with the same lens. Be ruthless.

Useless reports waste time, paper, and terabytes.

But that’s not the real cost.

The real cost is the confusion and diluted focus.

If your supply chain gets five reports per week, and one is good, and four are sh*t. I’ll bet you at least half the team are taking decisions off of the four.

All sh*tty reporting started as someone’s good idea. They probably left the company 3 years ago. And maybe it wasn’t even a good idea to start with.

How many times have you heard some variation of the following?

“It just takes the click of a button to prepare, so it doesn’t take me any time. And someone might decide they want it one day. What harm can it do to keep running it?”

More than you think.

Kill dead reports. Build your bureaucracy bonfire.

Every one you burn sharpens the ones that matter.

It’s ‘LinkedIn fashionable’ to scoff at reporting the past:

Some of the criticism is valid. And yes, reporting should influence future behavior.

But the most powerful way to shape future behavior?

A culture of accountability. A business where people do what they said they would do.

That’s how companies perform.

And the way you measure that? You compare what actually happened to what you said would happen.

The single best device for driving future performance is still this: Sitting down with a team, promptly, with the numbers in hand …and walking through what did and didn’t happen. And why. With that foundation you can then decide what to do next.

That conversation only matters if the team felt tension in what didn’t happen.

If something was supposed to happen in June, and now it’s August, that might be fine. But first, why didn’t it happen in June?

So, if the real job of reporting is to drive behavior and performance in the business, how do you do that?

Well, that’s what we’ll answer in this series.

But for now, I want to introduce the cornerstone model for reporting performance.

Good reporting, the kind that actually moves the business, must answer all four of these questions:

(Credit to Andrew Lynch who inspired this)

Here’s what that looks like in practice:

What? We missed profit by $400k this month, despite sales being 3% ahead of plan. Gross margins were 200bps behind, driven by rising raw material prices.

Why? Six months ago, we reduced our aluminum hedge from 6 to 3 months. At the time, global stock levels were high, and procurement expected prices to fall. But demand spiked, and our macro read was off. We misjudged the price direction.

So What? Our competitors are hedged further out. That 3–4 month gap will cost us $5m vs budget over the next six months. We can’t pass this onto customers, it would kill our competitiveness. And we can’t afford to do nothing. A $5m profit hole would trigger a covenant breach by year-end.

Now What?

We have to mitigate the $5m, so here is what we need to do in response:

This model balances past and future.  It diagnoses the root cause but also drives the next steps.

We’ll dig deeper into how to build and deliver this kind of message next week.

Most finance teams don’t have much time between closing the books and publishing the numbers.

You’re probably nodding. It’s a tale as old as time for finance teams. A scramble to get the numbers out, and the commentary becomes an after thought. Hastily put together at 7pm on publication day.

The consequence? Not enough time to figure out the so what or the now what — and sometimes not even the why.

But this isn’t just frustrating for finance, it creates chaos downstream.

When you publish numbers without the full story, the business fills in the gaps. Everyone draws their own conclusions, often inconsistent and wrong.

Before long, you’ve got a swirl of mixed messages about what happened and what should happen next. We (the finance community) need to publish much earlier and with a much more complete version of the story.

That means closing faster and speeding up ‘time-to-insight’ once you have closed. We’ll revisit this (and specifically how you do this) in a future series.

For now, just now that timeliness is important. Reporting has a short shelf life.

The know-nothings will tell you that all reporting needs to be digital and real time. Sounds good (and sells software), but this take is more wrong than it’s right.

Sure, some reporting is best delivered in real time. Operational KPIs on the front line, where you need to be making constant tweaks to optimize performance.

But not all decisions are made in real time nor should they be. Some decisions are best made with context, and time to breathe and reflect. And the way reporting is provided should respect that. No one needs a live dashboard of EBITDA every hour.

Good reporting matches the rhythm the business needs - not the pace data is available.

It’s about blending:

Miss any one of these, and the reporting is a waste of time. Or worse… it screws with focus and drives chaos.

It’s about getting the right balance and the right cadence. When it’s intentional, coordinated, and well-timed… reporting sets the rhythm of the business.

In week 3, we’ll get deep into how to design that rhythm.

There’s one email I send every month that matters more than any other.

Once the financials are final, I send the exec team the results, with the full board on copy.

Included is a commentary written using the full What, Why, So What, Now What framework.

No one outside the CEO sees the full picture before this. That’s deliberate. It creates a moment of shared context, visibility, and accountability.

By this point, each exec will already have an idea of their own function’s story. But this gives them the fact base in the context of company performance. And in a high-stakes, public forum.

Every word is intentional.

I think about the reaction I want from each person on that email. What I want them to say to their teams. How I want their teams to respond.

And how I can use the tone and framing of the note to nudge the whole business in the right direction.

This isn’t ‘finance’ (and you definitely won’t learn it in your MBA class). It’s psychology.

But it’s probably the most important thing I do each month.

So what have we got in store for you in this series?

And once we wrap this series on reporting, we will move downstream to roll into a 9-week FP&A series.

So this is like a 13-week super-series, covering the entire reporting and FP&A cycle.

It’ll be the definitive guide for modern finance teams.

And I CANNOT wait.

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