The following is a guest post from Kim Vogel, a former CFO who currently teaches in Stanford University’s continuing education program. Opinions are the author’s own.
Effective CFOs understand the power of stories. Numbers explain and data clarifies, but if the goal is to convey complex financial information in a relatable way and also inspire individuals and teams to take decisive action, then stories are the way to go.
When CFOs harness the power of the right story at the right time, they engage and empower stakeholders at every level of the enterprise to take the actions required to move the enterprise forward, elevating the strategic importance of the finance and accounting functions and raising the profile of the CFO.
While the stories CFOs tell are as unique as the circumstances they describe, it turns out that almost all narratives CFOs select fall into five categories or archetypes that have guided storytelling in literature, theater and cinema since storytelling began. Here is a recap of these powerful and timeless plot structures, and reminders of how Fortune 500 CFOs have used these same plot devices to shape their messages and make complex information more relatable and understandable.
1. Rags-to-riches
The rags-to-riches plot features an underdog character who gains something — status, wealth, acceptance — that they have been denied. Along the way, the underdog fuels belief in self-determination and perseverance, learns important lessons and by the end of the story elevates themselves beyond what they have lost. Examples of this plot in literature include Great Expectations, the fairytale Cinderella or the movies Rocky and Pretty Woman.
The Walmart CFOs have invoked the rags-to-riches archetype again and again, leveraging this tried and true theme while also empowering their stakeholders, the three-legged stool of strategic business communications. David Glass introduced the narrative when he joined Walmart in 1976 as the company’s first CFO. Glass often identified Walmart as the underdog in retail. One story he told compared the retailer to a gazelle in a world of lions:
“Every morning in Africa a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning in Africa a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle, when the sun comes up, you better be running.”
2. The quest
In the quest plot, the main character embarks on a journey to achieve a certain goal, earn a specific reward or acquire a particular object, often facing and surmounting numerous challenges and obstacles along the way. The journey often leads to an outcome greater than envisioned by the character. The Wizard of Oz is a classic quest story. Other examples include the Harry Potter franchise.
Amazon has described its own story as a quest to be the biggest bookstore in the world, later the biggest online retailer in the world. Its very name invokes a quest, signaling its determination to carry every product from A to Z.
Amazon’s first CFO Joy Covey often compared her unlikely quest to the company’s journey. Covey was a high school dropout at age 15 and eventually graduated from Harvard with an MBA as well as a law degree. As Amazon’s CFO, her messaging emphasized that the company was on a quest that challenged conventional short-termism:
“Rather than asking ourselves, ‘How has this been done in the past?’ We asked, ‘Where do we want to go and what are our goals?’ ‘Who are the companies that are truly able to make decisions that are in the best long-term interests of shareholders?’ ‘How do we structure our conversations with Wall Street from the very beginning, before we even go public?’ We felt that was the way to create the best possible company in the long run.”
3. Rebirth
The rebirth plot describes a character or an organization that experiences a near-death experience but emerges more potent and determined than before. The takeaway from rebirth stories is that the various challenges were a hidden gift leading to a positive outcome that even the main character could not have predicted. The time loop movie Groundhog Day is a classic rebirth story. Rebirth is also the main plot element of the hugely popular Barbie movie.
Apple is one of the most well-known rebirth stories in corporate America. In the late 1990s, Apple was on the brink of bankruptcy. In 1997, co-founder Steve Jobs rejoined the company and in a series of bet-the-company innovations, Apple became the most valuable company in the world. Fred D. Anderson, who served as CFO from 1996 to 2004, often spoke of those turbulent times using rebirth language:
“The resurrection of Apple from the ashes of near-death could only have been led by Steve Jobs. Only he understood the soul of Apple and its innovative roots, and the importance of combining art and science in the creation of truly great products. Only he had the powerful personality, vision and taste to achieve greatness. There will never be another Steve Jobs.”
4. Voyage and return
In the voyage and return story, the main character travels to a strange land, from which he or she returns armed with wisdom and renewed agency. Consider Gulliver’s Travels, Alice in Wonderland and the movie Toy Story, in which Woody and Buzz Lightyear take a journey, get lost and must work together to get home, learning the importance of cooperation and teamwork.
Hasbro’s CFO Gina Goetter works voyage and return themes into her presentations. To eliminate what she calls “bad complexity,” Goetter invokes the movie, Toy Story. Shuddering at the opportunity cost of all the unsold Hasbro products gathering dust in warehouses, Goetter reflects on “all these little action figures coming to life at night,” a direct quote from the movie.
5. The hero’s journey
Rooted in the world’s oldest stories, this plot describes a character who must overcome an intimidating challenge. Think classic stories such as David and Goliath or The Lord of the Rings trilogy. In corporate terms, the plot device pits a company against an existential financial threat, perhaps a disruptive technology, an upstart competitor or a Black Swan event. The fact that some companies fail to survive these threats — think Enron in 2001 or Lehman Brothers in 2008 — only intensifies the potency of the narrative when the hero endures.
By 2010, Best Buy was close to bankruptcy and it looked like it might join Circuit City in the retail graveyard. New leadership, including CFO Sharon McCollam, implemented a rigorous budget, eliminated the corporate jet and she personally inspected 75 Best Buy stores, imposing a “white glove” dust inspection and replacing managers who allowed stores to be disheveled. McCollam always advocated for the customer. “Retail is detail,” she noted. “If you don’t take care of the little things, the big things won’t take care of themselves.”
The best story wins. For CFOs who think in Excel, a good exercise is to make a list of past experiences and lessons learned and see how they might map to one of the five plot archetypes. The more complicated a message is, the more CFOs need the leverage of narrative. By honing their storytelling skills, CFOs will be better equipped to guide their organizations through the complexities of the financial environment, drive overall success, flex their strategic powers of influence and create durable impact
