Few CFOs communicating financial data effectively

While many finance chiefs recognise the importance of communications, few are effective in communicating with numerous stakeholders inside or outside their company such as investors and bankers, a report said.

Given the complexity of modern multinational organisations, with the increasing number of stakeholders a CFO should connect with, it is essential to execute a disciplined communications program to get critical messages to specific stakeholders without being drowned out by noise, added the report titled ‘CFO Insights – Creating an effective communications program’ from Deloitte, a leading provider of audit, consulting, financial advisory, risk management, tax and related services.

This issue of Deloitte’s CFO Insights introduces a simple model to help finance chiefs create and execute a disciplined communications program that aligns to their core objectives. This communications cascade requires incoming CFOs to establish clarity around nine key elements: priorities, audiences, audience-specific objectives, messages, packaging, channels, delivery, frequency, and feedback.

“Often CFOs underestimate the communications effort required to influence and make a difference in their organisation. Internal communications support for CFOs is either unavailable beyond the CEO office or when available it is ad hoc and not systematic,” said James Babb, partner and CFO Program leader at Deloitte Middle East.

“Working through the communications cascade early in the transition with a good communications professional can help CFOs clarify their requests of them, and both frame and execute a systematic communications agenda efficiently to achieve their organisational objectives.”

According to the Deloitte report, these are the nine key elements and steps in effective communications:

1. Aligning communications to priorities – A good starting point of CFO communications strategy should be core go-forward priorities. Once there is clarity on those, it makes sense to create a communications strategy specific to each priority that then becomes part of an overall communications program.

2. Defining critical audiences – The first step in creating a communications strategy for a specific priority is to define the audiences the CFO wants to communicate to and influence.

3. Defining audience-specific objectives for each priority – For each priority, the CFO may have different communications intents and goals for different audiences.

4. Defining critical messages – Having strawman messages to different audiences clarified across a timeline can help with the effective construction and distribution of messages as needed.

5. Packaging messages – Once key messages to stakeholders have been defined, the next step is to consider how to best package them.

6. Choosing who will deliver the messages – Sometimes, it is more effective for others to deliver messages on the CFO’s behalf.

7. Selecting channels – Depending on the nature of the messages, the importance of different stakeholders, the number of stakeholders to communicate with, and their geographic dispersion, different communications channels are likely to be selected.

8. Defining frequency – For each priority, audience, message, and channel, defining the frequency with which a CFO will communicate is needed.

9. Seeking feedback and evaluating effectiveness – To assess whether a CFO’s communications strategy is working, he/she needs to solicit feedback from different audiences.

A good communications program helps CFOs become clear about how much effort and time they will have to put to communications. It clarifies the messages and ways of engaging critical stakeholders. An authentic and credible communications program can help persuade and inform key stakeholders on the intentions and successes of CFOs—and this in turn can accelerate their impact on the organisation.

“The communication cascade may seem like a hierarchical structured template for one-way communication from CFO to an audience. It does not have to be. CFOs may have positions and viewpoints they communicate through conversations with other stakeholders. They may modify their positions and views based on those dialogues with stakeholders,” explained Babb.

“Conversations are part of the communications process—useful for establishing mutual understanding and revising priorities and messages. The cascade, while appearing linear, is not meant to be a one-time effort. Instead, it should be a dynamic process with feedback that is reviewed and reshaped every six months or so to be relevant, timely, and effective.”