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Words carry weight

It was the quarterly all-hands with the top 75 managers in the business.

I had a 10-minute slot halfway through. I was going to talk cashflow (surprise).

I was about 18 months into the CFO role, and we'd had a bunch of early momentum improving cashflow. Creating a burning platform was easy when the platform was actually on fire.

But as things stabilized over the following year, I felt the urgency and attention shift away from working capital. The business had grown complacent. And it couldn't afford to be. Our progress was fragile. Just a few old habits would put us right back where we started. We were still in a turnaround.

I needed a new way to get the message across. Today was the grand debut for a fresh approach.

I'd fallen down a rabbit hole on the power of storytelling and the techniques behind it. I'd just read 'Storyworthy' by Matthew Dicks, and I was ready to road-test what I'd learned.

So, I delivered my ten-minute slot. It was a narrative built on data, but it had tension, stakes, and a bad guy. All the things a good story has (more on the precise structure later). Most importantly, it left people in no doubt about what they needed to do and why.

I could feel the energy in the room change. I had their attention and commitment to tackle the cashflow challenge again.

But what happened after the meeting surprised me the most.

For months afterward, people would stop me in the elevator or cafeteria to tell me about what they were doing to help cashflow. Eventually, the penny dropped: they wanted to be part of the story I'd told.

A few words had unlocked the power of 75 people (and their teams).

I wished I'd built this skill 10 years earlier.

Spreadsheets don’t tell stories. People (and memes) do.

Welcome to part 2 of our 4-part series on business performance reporting.

Last week, we broke down the fundamentals of business reporting and why it matters.

This week, we're tackling how to get people to actually take action on your reporting through the power of storytelling.

We’ll unpack:

• Why transformation is at the heart of every great financial narrative

• The five storytelling devices to make your words pop

• A change management framework that works when stakes are high

Whether you’re writing a board pack or firing up the team at all-hands, this will change how you report performance to the business.

In case it wasn't obvious from that opening anecdote... I'm obsessed with stories.

During COVID lockdowns, I got curious about why some people can command a room with a story. While others put you to sleep reciting the same facts. I went down a rabbit hole, devouring every storytelling book I could find.

Then, I started to practice.

As I shared in the opening, I saw immediate leverage in my words. I implemented these techniques everywhere. Some situations called for direct storytelling: all-hands meetings, presentations, one-on-ones. Others required subtlety: earnings calls, board meetings. More on that distinction later.

I was stunned by the impact.

Eventually, I got the urge to test this on a larger scale, and the Secret CFO was born. Without pulling on this storytelling thread, this newsletter wouldn't exist. Now, I get to tell stories to 50,000 finance professionals every week.

Transformation is at the core of any story

At the heart of every great story, from ancient myth to Hollywood blockbuster, is a transformation journey.

There are two types of people in life: those who cry during the first 10 minutes of the film 'Up', and liars.

'Up' isn't a movie about a flying house. It's about an old man going on one last adventure to honor his wife.

Just like 'Interstellar' isn't a movie about space. It's about a father trying to reunite with his daughter. Space is just the backdrop.

Game of Thrones, despite its complexity, is about the transformation of a handful of characters.

• Daenerys: From exile to tyrant

• Jon Snow: From bastard to reluctant king

• While Robb Stark, Ned Stark, and Catelyn Stark were all prominent early character. They were all dead by season 3. They were ultimately just devices for Jon Snow's transformation story

Yes, I'm a terrible person to watch TV with.

This core element of transformation is precisely what makes storytelling so powerful in business. Especially in reporting.

We established last week that the purpose of reporting is to drive future action. In other words, to create transformation.

Is everything a story?

"Not everything is a story," I hear you say. "Sometimes data should just be data."

You're half right. If you're a junior analyst grinding out variance reports, forcing a narrative onto every spreadsheet cell will earn you eye-rolls, not applause. Your job is to feed accurate data into someone else's narrative.

But here's the trap: if you don't understand the broader story your numbers support, how do you know you're analyzing the right things? How can you spot when data contradicts the narrative? The best analysts I've worked with build mental models of the business story as they crunch the numbers.

Let's also be clear: stories don’t have to be long and rambling. They can be brutally efficient.

Hemingway famously won a bet by writing a six-word story: "For sale: baby shoes. Never worn."

Six words contain an entire tragedy.

In finance, your story might be equally concise: "Q3 margins collapsed. China tanked." That might be all your CEO needs for now to understand the story.

And the story might not even be words. It could be a chart, an image, or even a meme. PE giant Apollo used memes in their 2024 investor day deck. It makes their point better than any words or chart could.

Starting with Data?

So, where do you start? With data, right?

Well... kind of.

Sure, you need solid data to underpin the story you're telling. The action you want from the business must be led by analysis - not a whim.

Side note - The analysis is out of scope for this series, it’s a whole-ass topic in its own right.

But just because the data is how you reached the narrative of your story, doesn’t mean that’s how YOU should tell it to others.

This is where most finance pros go wrong (and where most financial storytelling frameworks lead them astray).

They tell the story as if they're speaking to a roomful of clones of themselves. Fellow left-brained spreadsheet dweebs (I count myself among them).

They walk logically through each step of analysis and the conclusions they reach. It certainly makes them sound smart.

But it doesn't inspire action. For that, you need to use classic storytelling devices…

The Five Storytelling Devices

There are many great storytelling frameworks out there:

• Pixar

• Hero’s Journey 

• Storybrand Framework 

These are all useful but have more elements than you need for most reporting applications of storytelling.

For most finance applications of storytelling, you need five devices:

Let’s break each of them down:

Hero. Every good story has its Kevin McCallister. And no, it's not you, CFO. This should be one of two people: either the person you're trying to influence directly (this is best). I.e. the sales people you need to drive prices up. Or the operations team you need to find another 5% of efficiency. Or if that doesn't work, then the hero can be someone your target cares about, like the customer. Just make sure it’s someone your audience will want to see win.

Villain. Why does the hero exist if not to defeat the villain? Home Alone was only memorable because Kevin had to outsmart the Wet Bandits. Your villain should be the thing you're trying to change or eradicate: churn, confusion, poor net promoter scores, aggressive competitors, etc. Try not to make it a person. There are times when it works, but most of the time, it's classless in a professional setting. If this villain can tie to your higher purpose, even better. Businesses perform well (like sports teams) when they have an enemy, real or imagined. Michael Jordan was the master of this:

Struggle. It was Kevin's isolation, limited resources, and having to rely on his wits against grown men that made his Home Alone victory so satisfying. What's the structural tension in your story? What are the trade-offs people will have to make? What obstacles stand in your way? What will you have to sacrifice to win? Are you asking people to work harder? Give up budget? Have difficult conversations?

Stakes. What happens if you're unable to defeat the villain? For Kevin, his beautiful family home gets ransacked, maybe he never sees his family again. In your story, does it mean you’re out of business? You lose your market leadership? You miss your bonus targets? Spell out exactly what's on the line. This is where you’ll get people’s attention.

Action. Finally, what exactly needs to happen next? Is it setting up paint cans on strings and toy cars on the floor? Do you need people to drive prices up? Improve labor controls? Close a loss-making outlet? What exactly needs to happen? Who's doing it? When?

Practical Example

Let's look at how the same financial data can be presented in two dramatically different ways.

Traditional Monthly Reporting Format

Executive Summary: March 2025 Performance

The company delivered mixed financial results for March 2025. Revenue reached $4.2M against a budget of $4.5M (-6.7%). EBIT was $840K versus a budgeted $945K (-11.1%). Cash balance ended at $3.6M, with key working capital metrics trending unfavorably.

Revenue Analysis

• Total revenue: $4.2M vs budget of $4.5M (-6.7%)

• Product A revenue: $1.8M vs budget of $2.1M (-14.3%)

• Product B revenue: $1.6M vs budget of $1.5M (+6.7%)

• Product C revenue: $0.8M vs budget of $0.9M (-11.1%)

EBIT Analysis

• EBIT: $840K vs budget of $945K (-11.1%)

• EBIT margin: 20.0% vs budget of 21.0% (-100 basis points)

• COGS: $2.1M vs budget of $2.25M (+6.7% favorable)

• Operating expenses: $1.26M vs budget of $1.30M (+3.1% favorable)

Cash Position

• Ending cash balance: $3.6M

• Days sales outstanding: 45 days (target: 40 days)

• Inventory turns: 5.2x (target: 6.0x)

Next Steps: Management should review the pricing on Product A and evaluate inventory management practices to improve performance next month.

Monthly Reporting Using Storytelling Framework

Headline: March Madness - How Our Cash Got Trapped

Hero: Our sales team delivered on Product B, hitting 107% of target despite supply chain chaos.

Villain: But poor sales elsewhere meant our EBIT fell to $840K (11.1% below budget), and cash flow is hemorrhaging. We have $1.8M trapped between slow inventory on product A & C and stretched receivables. That's capital we can't deploy.

Struggle: And it’s not just revenue and cash, our EBIT margin compressed to 20% (vs. 21% target). Product A's $300K revenue miss couldn't be offset by the $70K in favorable cost variances. The gap is widening every week.

Stakes: Without action, our EBIT shortfall will compound to $1.5M by Q3, and we'll face a $1.2M cash shortfall by July. This forces an impossible choice: delay our expansion program or take on expensive debt and destroy net margins. We need to act now to prevent this impossible decision.

Action: By Friday, I need:

1. Sales: Implement Product A's new pricing to recover EBIT margin

2. Operations: Cut the 12 worst-moving SKUs to free up $430K in cash

3. Finance: Accelerate collections on $520K in receivables with early payment incentives

Execute these to recover $300K in EBIT and free up $800K in cash by month-end. We have a small window to act before these variances become unrecoverable.

Note: I've structured the storytelling version using our five key devices separately for illustration purpose, but in practice, you'd weave them together seamlessly.

Tough Messages

Oftentimes (especially in high-stakes situations), your financial storytelling will ask people to change in some way. And people hate change.

You'll hear objections dressed up as practical concerns:

• "The customers prefer it this way."

• "We tried it before, and it didn't work."

• "It'll never happen in time."

But these are rarely the real reasons. The true barriers are ALWAYS emotional, not rational.

I once watched a regional CFO torpedo an ERP rollout, not because the system was flawed, but because it would centralize some control of budget approvals and strip him of his influence. His team ran a quiet campaign of ‘technical concerns’ that delayed the project 18 months and added $3M in cost.

Humans fear losing control.

People carve out territories inside organizations: titles, desk locations, reporting lines, working hours, relationships, power dynamics, bonus structures, promotion prospects, overtime rates, work-from-home privileges, and hundreds more invisible boundaries.

When people hear "change," they immediately calculate what territories they might lose control over.

Breaking through this emotional noise requires more than just facts and figures. That's where the next framework comes in.

Heart, Head & Hands

This model is one I call Heart, Head & Hands. I can’t take credit. I first heard it during a keynote speech by a high-profile CEO at an industry conference and it's stuck with me.

The framework is simple but powerful:

If you want someone to take action, you must appeal to their:

• Heart (emotional connection)

• Head (rational understanding)

• Hands (practical action)

In exactly that order.

This is also the core of Simon Sinek's "Start With Why" philosophy. You must give people a reason to care before they'll act on your data.

So first address the emotions in the room, then present the rational case, and finally tell people exactly what you need them to do.

Here's an example of this approach in action:

Heart: "Let's be honest about where we stand. This company, the one we've all committed to, is facing its defining moment. I'm not talking about hitting quarterly targets. I'm talking about whether we'll still be having these meetings next year. The path we choose right now determines whether we create our future or have it dictated to us. That's what keeps me up at night and why I'm standing here today. There is a much brighter future, and we can get there quickly. But only if we take some crucial steps now."

Head: "Our cost structure is 32% above industry benchmarks. EBITDA margin has dropped from 9% to 3% while competitors hold at 11%. Analysis shows targeted reductions of $4.2M quarterly will return us to competitive positioning within two quarters. Without this, we burn through our cash reserves before the end of the year."

Hands: "As a department leader, I need three things from you by Friday: a proposal for 10% headcount reduction, a plan to cut 20% in non-personnel costs, and your schedule for one-on-ones with affected team members. I've already prepared templated communications you can use. I'll be available all day tomorrow if you need help making the tough calls.

You might be wondering when to use which framework. It depends on what you’re trying to achieve.

I use Heart, Head & Hands for big, uncomfortable changes. For those times you're asking people to do something new or emotionally loaded.

The Five Devices has more everyday use. It’s the default for turning routine reporting into something people actually care about.

Common failings & edge cases

To be successful at the highest level, you’ll need to free yourself from the shackles of high school and college English classes. There are no points for 4-syallable words and long, meandering stories.

Part of the edit process for this newsletter is to ensure I am only using words that an 11 year old could understand. Or if it’s a technical term we define it using simple words. It takes longer to edit than it does to write.

Here are some practical takeaways to keep in mind as you hone your storytelling:

• Overdramatizing small issues. Turning a 3% variance into a Netflix thriller will make you look like a fool

• Misjudging the audience. The ‘hero’s journey’ works well internally with the right audience but falls flat talking to a buttoned-up banker (for example)

• No data. Yes, these are stories, but they are built on data. We aren’t making up fairytales here.

• Crisis Communications. In a true crisis, keep the front end of the story sharp. Clarity and speed are 100x more important than creativity

• Cultural considerations. In some global contexts, the communication style might need to vary. Map the tone accordingly.

Net-net

We've covered the principles of financial storytelling and two powerful frameworks:

• The five storytelling devices (Hero, Villain, Struggle, Stakes, Action)

• The Heart, Head & Hands approach to change management

But a key question remains: Where and when do you tell these stories? What reporting cadence makes sense for different audiences? What level of storytelling is appropriate for a board meeting versus a team huddle?

Next week, we'll get into the practical applications of reporting and dive into the ideal cadence for different audiences and purposes. I'll show you how to adapt these storytelling techniques for presentations, board meetings, earnings calls, and everyday communications.

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