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How to Help Non-Finance Audiences Understand Finance Information

  • By Bryan Lapidus, FP&A
  • Published: 1/22/2018

DisclaimerLast week I gave a presentation to the executive committee of a non-profit that I support. I run the long-range financial planning committee, and I was there to present the “base case” that my committee projects for the next five years. This was not a financial audience—they were volunteers who ranged from medical to legal to marketing professionals. My message to them was covered in one slide that contained two graphs: expected cash flows by year, and cumulative cash flow over that period.

Of course, crafting any successful presentation requires understanding the audience, and for finance professionals, that includes how we present quantitative information to non-financial people. First, I spent time on a disclaimer slide because I had wanted to prepare my audience on how to interpret financial projections. I knew my audience was a high-level supervisory committee who were not close to the numbers, and I did not want them to assume they had a higher level of accuracy or authority than my committee intended. We prepared the slide seen above to introduce the graphs.

Let’s break down this slide into its parts to see why I spent about 20 percent of my time on it.

The goal

To begin, every meeting and every presentation should have a purpose. This focuses you as the creator of the presentation, and it guides the audience to be receptive to your message. 

For those of us in finance who work with models all the time, we know the strengths and fallibility of models. We also know that the further out in time, the less precise the model will be. The goal of a model is to be useful. In my case, by putting the current fiscal year into historical perspective and showing trouble looming on the horizon, my goal was to create a need for action.

I focused on the message of taking action to preclude why I was not going to show detailed data. This audience would not have the time or inclination to sift through the spreadsheets, and my goal was not to argue about details.   

The limitations of the model

I told my audience that the forecast I was about to show the was one of many possible outcomes, and there are many things that will influence those outcomes. In fact, I had two slides discussing ways the outcome could improve or worsen. This is walking a tightrope between maintaining credibility in the model I was about to show, and admitting that there are other possibilities that could exist which may seem to undermine any argument that I was about to make. However, this is the truth, and it was better that I raise the issue than someone else.

My first disclaimer was that this model was directional and not precise. Non-financial audiences may look at a forecast, with detail and perhaps even decimals, and be impressed by the level of precision and seeming sophistication of the presentation. Precision is not the same as accuracy. We can create models that provide detail to any decimal place, but that is no guarantee that they will be accurate. One way to avoid this false sense of accuracy is to round off future numbers and talk about them in rough terms.

The second disclaimer was designed to mitigate the potential for panic while creating the impetus for change in the organization. I stressed that what I was about to show was one of several possible outcomes, reinforced by the thrive/survive/other pathway sketch on the bottom of the slide. The organization could correct its course if it took action.

The third disclaimer focused on driver-based planning. Past financial presentations to this group were very detailed; for the long-range plan, I consolidated them down to 10 line items that are the main drivers. I also pointed out where there was accountability, or someone should be appointed to lead that business driver. I had a backup slide in which I summarized the key assumptions, but because I address this potential weakness upfront, the audience understood that larger point I was making and we did not need to debate the specific details.

By spending a few minutes in the beginning of the meeting explaining what I was going to present and potential challenges, I was able to spend more time explaining the main point of the presentation, thereby saving time and distraction from the message. I did not panic the audience, even though I focused on challenges ahead, and maintained both a positive tone and a bias towards action. Overall, we had a very good conversation—no disclaimer needed on that!  

Bryan Lapidus, FP&A, is a contributing consultant and author to the Association for Financial Professionals. Reach him at [email protected].

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