Deloitte’s CFO Insights: Are CFO’s communicating financial data effectively?
27 December 2015 – While many finance chiefs recognize the importance of communications, few are effective in communicating with numerous stakeholders inside or outside their company such as investors, bankers, customers, and employ. According to Deloitte’s latest report “CFO Insights - Creating an effective communications program,” given the complexity of modern multinational organizations, with the increasing number of stakeholders a CFO should connect with, and the competition for attention, it is essential to execute a disciplined communications program to get critical messages to specific stakeholders without being drowned out by noise.
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 organization. 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 organizational objectives.”
According to the Deloitte report, these are the nine key elements and steps in effective communications:
- 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.
- 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.
- Defining audience-specific objectives for each priority – For each priority, the CFO may have different communications intents and goals for different audiences.
- 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.
- Packaging messages – Once key messages to stakeholders have been defined, the next step is to consider how to best package them.
- Choosing who will deliver the messages – Sometimes, it is more effective for others to deliver messages on the CFO’s behalf.
- 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.
- Defining frequency – For each priority, audience, message, and channel, defining the frequency with which a CFO will communicate is needed.
- 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 organization.
“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.”
To view the whole report, go to: http://bit.ly/1NbwsZE
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About Deloitte & Touche (M.E.):
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is a leading professional services firm established in the Middle East region with uninterrupted presence since 1926.
Deloitte provides audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with more than 3,300 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has also received numerous awards in the last few years which include best employer in the Middle East, best consulting firm, the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW), as well as the best CSR integrated organization.