Communicating Financial Information Effectively - … Mgmt Institute/2016 Handouts... · Blowing the whistle ... This is often a statement of the reason for the change, ... Communicating

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Communicating Financial

Information Effectively

Sponsor: WACUBO BMI

Date: August 3, 2016

Location: UC Santa Barbara

Name of Presenter: Jeffrey West, University of Utah

The world is complex, dynamic,

multidimensional; the paper is

static, flat. How are we to represent

the rich visual world of experience

and measurement on mere

flatland?

– Edward R. Tufte, Envisioning Information, The Graphics Press,

Cheshire, Connecticut, 1990

Communicating Effectively

Analysis and presentation of financial

information constitutes an important form of

communication

• The message

• The messenger

• The delivery method/tool

• The audience

110 Effectively Communicating Financial Information, August 6, 2009

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KEY skill for personal development & success

• Seeks to inform and facilitate decision-making

• The “Goldilocks” test

• Information needs to be:

Meaningful and important

Succinct and relevant

Analyzed and interpreted

• Modern attention spans


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Your Presentation Objectives

Define and focus on: The Environment

The Audience

The Issue

Our Future

The Solution

Craft a story

Communicate complex ideas with clarity, precision and efficiency!

Communicating Financial Information Effectively 1/17/07 6

• The magician’s illusions are based on techniques that:

Deny

Conceal

Obscure

Manipulate, optical information

• To create illusions is to engage in disinformation design

• Two principles of successful illusionists:

Suppressing context

Preventing reflective analysis

Edward R. Tufte, Visual Explanations: Images and Quantities, Evidence and Narrative, The Graphics

Press, Cheshire, Connecticut, 1990

Is Effective Financial

Communication Magic ?

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• When communicating financial information

effectively, the techniques of disinformation are

reversed and the strategies of good

communications are reinforced

• Your audience should know beforehand what you

are going to do

• The strategies of magic suggest what not to do if

our goal is truth-telling rather than illusion-making*

* Edward R. Tufte, Visual Explanations: Images and Quantities, Evidence and Narrative, The Graphics

Press, Cheshire, Connecticut, 1990, page 55

Reverse the Techniques of

Disinformation Design


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What makes a good presentation?

We all know when a presentation is good.

And, we know when they are poor.

• What are some attributes of a good

presentation?

• What are some attributes of a poor

presentation?


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It‘s Story Time

Data, without the meaning behind it, can be boring.

Too much information can be confusing.

Would you rather listen to someone state facts and

figures or would you rather listen to a story?

What story do you need to te l l?

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Common Presentation

Themes

• Transactional/event-driven/history (What happened?)

Relaying information

Facts, figures, trends

• Status/summaries/results (Where do I stand now?)

Time period, actions implemented, etc.

Complying, progress, requirements

Resources – where’s my stuff?

• Forecasts/projections/estimates (How might the future

look?)

Budgets, plans, decision points

Persuading - building a case for some action


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Twelve Types of Stories

1. Historical narrative

“We have a history that makes us proud, and we want to apply our high

standards to the current situation”

2. Crisis

“We have to respond to the danger facing us”

3. Disappointment

“We made a decision based on the best information we had available, but

now we know it wasn’t the right decision, so we have to try something else”

4. Opportunity

“We know something now that we didn’t know before, which presents us

with a new possibility if we act”

5. Crossroads

“We’ve been doing fine on the path that we’re on, but now we have a

choice and we have to decide which path to take”

Summarized from Henry M. Boettinger, “Moving Mountains: The art of letting others see things your way ,” 1st Collier

Books ed, January 1975, Macmillan Publishing Company, Inc (Crowell-Collier Press, 1969).


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Twelve Types of Stories (cont.)

6.Challenge

“Someone else has achieved something amazing – do we have it in us to do the same?”

7.Blowing the whistle

“Although it appears everything is going fine, we have a serious problem we need to fix”

8.Adventure

“We know that trying something new is a risk, but it’s better to take a risk than to stay in a rut”

9.Response to an order

“We’ve been told we have to do this, so we’re here to figure out how to make it happen”

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Twelve Types of Stories (cont.)

10. Revolution

“We’re on a path to disaster if we don’t radically change what we’re doing”

11. Evolution

“If we don’t keep up with the latest _____, we’ll fall behind”

12. The Great Dream

“If we can only see our possibility, we can make it our reality”

S o . . .

• W h a t i s y o u r g o a l ?

• W h a t i s t h e p u r p o s e f o r y o u r p r e s e n t a t i o n ?

• W h a t k i n d o f s t o ry d o y o u n e e d t o t e l l ?


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Crafting the Story

How do you put all the pieces together to

create a cohesive story that is supported by

data that brings about the desired outcome?

Use a story template…


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The Story Template

The Environment:

Where are we, and when is it?

The Audience:

Who are we in this environment?

Why are we here?

Our Future:

What do you (or our constituents) want to happen in the future?

The Solution:

How do we advance there from here?

The Middle: Developing Your Story

Key Point #1 Major Contributor A

Major Contributor B

Major Contributor C

i

ii

iii

iii

Minor Contributor

Minor Contributor

Minor Contributor

The Issue:

i

ii

iii

i

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The Beginning: The Introduction and Environment for Your Story

Refer to the template in your handouts – Adapted from “Beyond Bullet Points,” by Cliff Atkinson, Microsoft Press, 2005, page 22.


Major Contributor B

Major Contributor C


Major Contributor B

Major Contributor C

The Idea

This is the doorway/opportunity to the solution

The Ending: The summary, and recommendations for action, benefits and expected outcomes

The restatement

The recommendation

The benefits

The call for action

iii

Minor Contributor

i

ii

iii

Minor Contributor

i

ii

iii

Minor Contributor

i

ii

Minor Contributor

i

ii

iii

i

ii

iii

Minor Contributor

i

ii

iii

Minor Contributor

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The beginning

1. Review / describe the environment surrounding

the problem

Why is this important to me?

2. Identify the audience

Who am I crafting this story for?

Why is this important to them?

3. State the current issue or situation

This is often a statement of the reason for the

change, request or requirement needing action

What has changed?

Framing Your Story


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Framing Your Story (cont.)

4. Describe the future condition or desired state

What you want to happen or where you would like

to be after the situation is resolved

5. Propose a pathway(s) to the solution

How do we close the gap between point 3 and 4?

How do we move from point A to point B?


• Read through the Paragon State University case

study

• Consider the audience, its needs, level of

knowledge, how to learn more, how they will use

the material, the frame of reference, your

institution’s situation and the time frame.

• In groups - discuss and begin to build facts

and/or assumptions for preparing a presentation

Use the “beginning” section of the Presentation/Story

Template

Application Exercise #1

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Strive for Clarity Early in

Your Presentation

• A clear statement of the problem is essential to a

successful presentation

Clarity addresses the audience’s question: “Why am I

here?”

• As soon as possible, address the following for your

audience:

What is the subject or topic to be addressed?

Why is the subject/ topic important?

What is a possible solution (s) or opportunity?


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Strive for Clarity Early in

Your Presentation (cont.)

Audience members are not purely rational

beings – they are emotional too

Make an emotional connection with the

audience by defining a few of the most

important elements of any story

Tailor these elements to your audience,

making the story personal.


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Developing Your Story

In view of the previous discussion, what are the

three key points that would be most meaningful to

your audience?

Consider the presentation “theme”

– What happened?

– Where do I stand now?

– How might the future look?

Which of the 12 “types” of story are you trying to tell?

What message do you want to emphasize clearly and

concisely?

Aristotle is first credited with identifying that a well-constructed story should have a beginning, a middle, and an end.

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Developing Your Story (cont.)

Decide how to best relate your theme to the

audience

Look for tangible (and desirable) outcomes

available

Begin to tell your story – with this audience in

mind

Anticipate the possible impact of your message

(put yourself in the “shoes” of your audience)


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Outcomes Needed

• Will you be satisfied with providing information

only?

• Will you be satisfied with obtaining input only?

• Do you need a decision? Who in the audience

will make it?

• What latitude do you have in the decision

process?

• What input will the audience really have in the

outcome?


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Variations of Your Story

One size or type of presentation might not fit all

situations. Consider changing the structure of your

story You could place the Why and the What questions first and

define the environment (the Where and When), the

audience (the Who), and the solution (the How) later

You could begin with the solution, used as an attention

step, and then continue with the other steps

At times, you might be able to eliminate one or more of the

questions, if the audience is clear and in absolute

agreement about a situation

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Practical Advice for an Effective

Presentation

1. Provide everyone in the audience one or more pieces

of paper, rich with material related to your presentation

The credibility of paper

Serves as a record for future reference

Demonstrates responsibility

Not necessarily a copy of your presentation

2. Master the details of your presentation through practice

Preparation and practice have high value

Repetition allows for improvement

Practice on what your audience will hear and see


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Presentation (cont.)

3. Show up early to your presentation Arriving early provides you a safety “buffer” to overcome

unforeseen problems

Provides a few moments for you to relax

Allows you to greet people as they arrive (establishes a connection)

4. Finish early Get to the point

Be brief

Remember, its about “Edutainment”

Samuel Johnson’s famous comment on Milton’s Paradise Lost: “None ever wished it longer. . . .” The Lives of the Most Eminent Poets (London, 1783), volume 1, p. 249.


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Presentation (cont.)

5. Anticipate questions from your audience

If you have one member of your audience that might have

“issues”, deal with those in advance of the presentation

This might require a separate one-on-one chat

Try to answer the “anticipated” questions in your presentation,

thereby avoiding unwelcome discussion during your presentation

Answering these questions demonstrates thoroughness

6. When answering questions during your presentation

Validate

Clarify

Respond

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Using the same Paragon State University case

study you worked on before, identify three major

messages and the data elements that relate to

those messages

Use the “middle” portion of Presentation/Story

Template

Work in groups

Application Exercise 2

Evaluate Data Requirements


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Selecting the Right Data is Critical

in Reaching Your Audience

• Begin with the basic story and identify data relevant to the story

Focus on the three key points

• Be selectiveDo not use too much data

• Pay attention to time framesUse appropriate time frames in your financial data

• ComparisonsOften, this is a good opportunity to integrate the use of non-financial data into your presentation

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Selecting the Right Data is Critical

in Reaching Your Audience (cont.)

• Financial data reflects operational decisions

Remind your audience that financial data is derived

from our student population, campus additions and

building improvements, information technology

services, employee health, sponsored research

changes, etc. (It’s usually about resources!)

• Be consistent with other financial reports

Use existing financial and institutional reports as

your starting point and extract data from them

(Everything should tie back to “official” data, i.e.,

the system of record)


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Graphics Reveal Data

• Information is data that allows for an action or

decision to take place!

• Data, in isolation, does not foster decision-

making

• Graphics can be more precise and revealing

than numbers/computations alone.

Consider Anscombe’s Quar te t


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Anscombe’s Quartet:(all four of these data sets are described by the same linear model)

I II III IV

X Y X Y X Y X Y

10.00 8.04 10.00 9.14 10.00 7.46 8.00 6.58

8.00 6.95 8.00 8.14 8.00 6.77 8.00 5.76

13.00 7.58 13.00 8.74 13.00 12.74 8.00 7.71

9.00 8.81 9.00 8.77 9.00 7.11 8.00 8.84

11.00 8.33 11.00 9.26 11.00 7.81 8.00 8.47

14.00 9.96 14.00 8.10 14.00 8.84 8.00 7.04

6.00 7.24 6.00 6.13 6.00 6.08 8.00 5.25

4.00 4.26 4.00 3.10 4.00 5.39 19.00 12.50

12.00 10.84 12.00 9.13 12.00 8.15 8.00 5.56

7.00 4.82 7.00 7.26 7.00 6.42 8.00 7.91

5.00 5.68 5.00 4.74 5.00 5.73 8.00 6.89

N = 11

mean of X's = 9.0

mean of Y's = 7.5

equation of regression line: Y = 3 + 0.5X

standard error of estimate of slope = 0.118

t = 4.24

sum of squares X - X = 110

regression sum of sqaures = 27.5

residual sum of squares of Y = 13.75

correlation coefficient = .82

r2 = .67

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Yet, how they differ!(F.J. Anscombe, “Graphs in Statistical Analysis,” American

Statistician, 27 (February, 1973), 17-21)

I

0.00

2.00

4.00

6.00

8.00

10.00

12.00

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00

II

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00

III

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00

IV

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00


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Communicate complex ideas with

clarity, precision and efficiency!

Our reports and graphical elements should:

Show the data

Focus the viewer on “thinking” about the substance

rather than about the method, design, technology or

anything else

Communicate the truth about what the data have to

say (avoiding distortion; preserving data integrity)

Present much data in a small space


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Communicate complex ideas with

clarity, precision and efficiency! (cont.)

Make large data sets coherent

Encourage the eye to compare different

pieces of data

Reveal the data at several levels of detail,

from a broad overview to a fine structure

Serve a clear purpose: description,

exploration, tabulation, etc.

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Written Reports

• Chose a format and then follow it consistently

• Use words, numbers, and graphics together

• Tell your story about, and with, the data

• Use attractive displays; they do not have to be

“works of art”

• Simple is better than complex, both in words and

graphics

• Use the “Story/Narrative Template” as the guide

or outline for your report


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Making Complexity Useable

Friendly1. Words are spelled out, avoiding mysterious and elaborate encoding

and acronyms

2. Words run from left to right, the usual direction for reading

3. Little messages help explain text

4. Elaborately encoded shadings, cross-hatching and colors are

avoided: instead, labels are placed on the graphic itself; no legend

is needed

5. Colors, if used, are chosen so that the color-deficient and color-blind

(5 to 10 percent of viewers) can make sense of the graphic

6. Type is clear, precise, modest and is upper-and-lower case (easy to

read)

From Edward R. Tufte, The Visual Display of Quantitative Information, 2nd edition, The Graphics Press, Cheshire, Connecticut, 2001, page 183.


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Making Complexity Useable (cont.)

Unfriendly1. Abbreviations abound, requiring the viewer to sort

through text to decode the abbreviations

2. Words run vertically, particularly along the Y-axis; words run in several directions

3. Graphic is cryptic, requires repeated references to scattered text

4. Obscure codings require going back and forth between the legend and the graphic

5. Design insensitive to color-deficient viewers: red and green are used for essential contrast

6. Type is overbearing; is all capitals

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• Restate your position

• Make a recommendation

• Talk about the benefits

• Make this a call for action

Ending the Story


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Application Exercise #3

In groups

Complete the “ending” section of

Presentation/Story Template for Paragon

State University

Identify spokesperson to report out What you’ve learned throughout the process

What was the most challenging aspect

What you might do differently next time you present

Summary and Concluding

Remarks

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Your Presentation Objectives

• To define and focus on:

the environment (Where and When),

the audience (Who),

the issue (What),

our future (Why), and

the solution (How)

• To craft a story

Beginning

Middle

Ending

• To communicate complex ideas with clarity, precision and

efficiency!


Effective communication is a LIFE skill

• Not only useful for your profession

• Some of us are born “natural” communicators –

but most of us need to study and learn how to do

this effectively

• Like any other skill, you will get better at it the

more you do it

• Look for opportunities to present; be “out front”

• Consider tak ing a “s to ry te l l ing” c lass


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Communicating Financial

Information Effectively is Not Magic!

Remember, to pull a rabbit out of a hat, the rabbit

must first be in the hat!

Documents

Communicating Financial Information Effectively - … Mgmt Institute/2016 Handouts... · Blowing the whistle ... This is often a statement of the reason for the change, ... Communicating