Many highly intelligent employees who are skilled and passionate in their area of expertise will glaze over like Jessica Simpson listening to Robert Plant when you try to talk to them about financial information. The following tips will help you talk about finances so non-financial management and staff will listen and understand.
- If there’s a bustle in your hedgerow, don’t be alarmed now. It’s just a spring clean for the May queen. No idea what I’m talking about? That’s what we sometimes sound like when we are talking financials to non-financial people. CFO’s are so accustomed to abbreviations like EBITDA and ROI; or to phrases like Working Capital and Discounted Cash Flows; or even to words like Accruals and Amortization, we forget these words sound like gobbledygook to some of our non-financial peers. Do not assume they will ask for the definition of terms they don’t understand as they may be too embarrassed. By keeping your jargon in check and stopping to explain the meaning of confusing terms, you will keep them engaged and win their trust.
- Speaking of trust, build it, ’cause you know sometimes words have two meanings. Non-financial people are often intimidated by financial discussions and they may feel you are trying to fool them. Once you have built their trust, they become far more interested and responsive in financial discussions. Getting to know your audience will help you build their trust. Go to lunch with them or activities outside of work. Give them credit for their accomplishments in front of others. Admit something self-deprecating like your love of Led Zeppelin. Most importantly, don’t do anything to erode their trust.
- Numbers are intimidating, but with a word she can get what she came for. Most CFO’s can look at a page of numbers in a detailed financial statement and quickly extract all the important information. Non-financial people do better with words and, better yet, graphics. The ability to create easy-to-understand graphics is a skill CFO’s need to master.
- Yes there are two paths you can go by, but in the long run, your message will be better received when you use consistent metrics. If you are constantly changing the metrics or not reviewing them on a consistent and frequent basis, they may not spend the time to figure out the message. When they see the same metrics over and over on a routine basis, they become comfortable with them, they learn how to quickly absorb the key information and they will review them as part of their regular routine.
Following these tips may not help you climb the stairway to heaven, but they will make you a more popular CFO. More importantly, it will help you keep your company’s non-financial employees better informed so they can do their jobs more effectively. If you want an idea of how nonsensical financial jargon can sound, check out this hilarious random financial phrase generator. If you like this blog post, please share it with your connections and discussion groups on LinkedIn, or on Twitter or Facebook using the icons below.