#342 Why We Need To Be A Bit More Like Financial Journalists

#342 Why We Need To Be A Bit More Like Financial Journalists

“I truly believe that you need to have your expertise to go deep, but always keep your eyes open what’s around you because you never know what next step might come up.”

According to today’s guest mentor Michael Lengenfelder, who also helps us deconstruct on the #sitn podcast:

• How to move forward in your career path and transition between many different operational & leadership hats and finance.
• The importance of storytelling in finance and business and having more a journalistic mindset.
• How finance professionals can more effectively engage in storytelling to help with better decision making.

Check out http://sitnshow.com/ for detailed time stamped show notes, transcripts, links to resources and more guest mentor episodes and Monday Memos.


Our Guest Mentor:

Michael Lengenfelder is an experienced business leader who has had to wear many hats during his career as a Consultant, Business Unit Head, Finance Vice President and now in his current role as Head of FP&A Product Management. Michael has over 15 years history of working in the computer software industry gaining an exceptional knowledge of Finance, CPM/Planning/Budgeting/Forecasting/BI, Risk Management and Financial Consolidation.

Michael holds an MA focused in International Business Administration, is a keen cyclist and is based out of Vienna, Austria.

Key Quotes from the Episode:

[On career path] “I truly believe that you need to have your expertise to go deep, but always keep your eyes open what’s around you because you never know what next step might come up.” [5:34]

[On storytelling] There’s one rule of thumb that I have, even if you don’t know a report and you look at it, it should tell you a story. If you need to spend five minutes and you still can’t tell a story about a visualization, it’s simply not good. Yeah. And the thing about the storytelling is basically a whole concept around it, right?” [11:14]

[On storytelling in finance] “You have some visualization. What’s the good, what’s the bad, and there’s always good and bad, without exception. And then they give recommendations. And that’s what I think a lot of the executive reporting should be about.” [13:22]

Key Points from the Episode:

–          How to move forward in your career path and transition between many different operational hats and finance.

  • The importance of having more a journalistic mindset for storytelling in finance and business.
  • How finance professionals can effectively engage in storytelling to help with better decision making.

Stamped Show Notes

[02:30] Michael gives us a brief introduction of his career and journey

[04:43] The biggest challenges for Michael when taking the next leaps in his career particularly moving between operational and leadership roles.

[06:00] Michael talks about his transition into finance.

[08:50] Michael shares what excites him most about his current work.

[09:28] Michael advises us what we can do with storytelling.

[16:12] Michael elaborates how to effectively do storytelling better.

[17:35] Michael shares what sort of key things could help people get from ABC to XYZ.

[19:10] The best piece of advice Michael has ever received.

[20:26] Michael recommends a resource for the audience.

[21:33] Michael gives details on the best place to connect with him.

[22:00] Michael shares his parting thoughts to the audience.

Resources Mentioned:

International Business Communication Standards: Conceptual, perceptual, and semantic design of comprehensible business reports, presentations, and dashboards Paperback – July 17, 2017 by Rolf Hichert (Author), Jürgen Faisst  (Author), Members of the IBCS Association (Contributor)


Website: International Business Communication Standards (https://www.ibcs.com/)

Connect with today’s guest:

LinkedIn: https://www.linkedin.com/in/michaellengenfelder/

Unit 4: https://www.unit4.com/

Full transcript:

#342: Why we need to be a bit more like financial journalists.

[00:00:30]Andrew: [00:00:30] Hi everyone. And welcome to this weeks strength in the numbers show really excited to share with you today. Guest mentor Michael Lengenfelder.

[00:00:37]Share some really fantastic advice. On how to deconstruct a few different areas within finance. One of them is how to move forward in our careers.

[00:00:47]yeah. Make those leaps. We need to yet transition successfully between many different operational and leadership hats.

[00:00:54]As Michael served in many different leadership roles, not just as a finance vice-president

[00:00:59]We then spend a lot of our conversation focused around the importance of storytelling. Maybe the benefits of having a more journalistic mindset, particularly in times when there’s just so much data and potential insights out there, how do we get the right balance messaging and headlines across, out of that?

[00:01:17]And as part of doing that, we then arrive at together. Some baby steps finance professionals can take to more effectively engage with this

[00:01:26]skill. Let’s call it or ability to leverage storytelling to help with better. Decision-making.

[00:01:32] I really enjoyed my time with Michael, his energy. He brought to the conversation.

[00:01:36]yeah, we had good fun recording this. And if you do want to find out more about Michael. Review some of the timestamps show notes, the transcripts links to the resources mentioned and insights from other guest mentors. Please check out, sit and show.com. And we always really appreciate it. When you recommend the show to your friends and colleagues, we can be found on all the major platforms you can subscribe at iTunes, Stitcher, SoundCloud, YouTube, Spotify, and Amazon music.

[00:02:03]And as always, we really appreciate you investing time with us today. So without further ado, over to Michael and the show .

[00:02:09] Michael, welcome to the show.

[00:02:16]Michael: [00:02:16] Thanks for having me.

[00:02:17]Andrew: [00:02:17] It’s our pleasure. I look really forward to sharing you with our audience, but before we get into the nitty gritty, as we call it, would you mind maybe giving them a brief introduction to your career and journey?

[00:02:28] Michael: [00:02:28] Sure. It’s basically all tied to the software that I’m still working with. I would even say that I’m a little in love with it, if you can say that with software. It’s about the FP&A software. I started 16 years back as a consultant then went through all the hierarchy levels in consulting. So from consultant, senior team leads, then led the whole consulting department. And when I back then started with the company, it was a small company. We were twenty-five people. And then came the next big step where I took responsibility for a business unit which was the utilities in the German-speaking region, responsible for software sales and consulting. Then came an interesting move from very operational positions. I became the VP finance, so responsible for the group of finance.

[00:03:17] What I back then did not understand was probably that was already the preparation for the next step. And I did that job also for three years. One and a half years before the software was acquired and the company was acquired. Unit4 then handed over the finance department to the new group.

[00:03:37] Then I took the next step which had been always with me for a long time. It’s the development of standard models. So standardized business models that you could easily reuse in the next project. And after the finance role, I then got a role that was really focusing on developing those standard models and also industry models.

[00:03:57] And now three months ago the picture is completed. I took over the product management for FP&A and next to the models, I’m now also responsible for the platform itself.

[00:04:08]Andrew: [00:04:08] So you’ve had a variety of experiences and I hope before we go into our main conversation, I’d love to pick some of those experiences, Michael, for our audience.  I find like a lot of the people listening into the show, they’re sorta like mini consultants within their organizations, or if they’re working in practice with clients, they’re like expected to be more advisory consultants now. When you made that shift from that consulting career path to leading a business unit. And having that responsibility for sales and P&L and so on. What did you find was the biggest challenges for you when you made that leap?

[00:04:43] Michael: [00:04:43] To be honest, I came from a smaller organization, and in the small organization you typically don’t have such a clear separation. So even in my consulting times, I was heavily involved in selling the software with my expertise from the project. So it was never that clearly separated.

[00:05:00] I was involved in many different areas. For me, it was a natural transition from the area that I was in still. I’m very passionate about this industry. I was super happy to take the next step in order to push this into the market and make it grow.

[00:05:16]Andrew: [00:05:16] I think that’s actually really good advice and they’re actually vital because if you have that mindset, that you’re part of a successful operation and selling the business. I think that coming onto our storytelling conversation later on, that I think it’s actually a good mindset to bring in because it just makes you a bit more valuable, a bit more adaptable to the environment we’re in and opened up that career path if that’s something you want to do as well.

[00:05:36] Michael: [00:05:36] I truly believe that you need to have your expertise to go deep, but always keep your eyes open what’s around you because you never know what next step might come up.

[00:05:46]Andrew: [00:05:46] Hey, that’s a great advice, Michael. And then I suppose you turned from, if I summarize it, from poacher to gamekeeper when you moved to VP Finance. How was that transition moving into finance?

[00:05:57]Michael: [00:05:57] Interesting, to be honest, because that’s what I’ve done for many years up until then. With the customers, I was then able to do internally. That was very interesting to really actually apply all that I was preaching, right? Fully integrated financial planning with P&L balance sheet cashflow enabled also the team leads to see in the system. To see what contribution margins we made in PS which I think is really important.

[00:06:22]If you can tell somebody who’s working operationally, let’s say in a consulting business, that they see what value am I creating with all my team members, if you can see that on a monthly report, I think that opens a lot of eyes that they understand better some decisions that need to be taken.

[00:06:41] So that was really interesting to basically do internally and also find the challenges that you naturally have there. But basically drink my own champagne then in the internal organization.

[00:06:54] Andrew: [00:06:54] I know. Yeah, it’s a bit of an interesting one.  I think as far as professionals, as finance leaders, we’re very good at giving out advice and putting controls in governance where it needs to be done. Sometimes you should probably take some of our own medicine, drink our own Kool-Aid. So that’s good. And I suppose that then just actually helps the holistic view. So now that you’ve moved more towards product management. And that’s a good thing. In software used to be sold as licenses upfront. Now it’s moved into the more, this recurring revenue, on the DRIP type model.

[00:07:23] And that’s got its pros and cons, but I was just talking to a pricing expert recently. And he was saying, business hasn’t gone to this sort of recurring revenue mindset or as a service mindset, then someone else will, they should at least try it, otherwise competitors is going to do it.

[00:07:41] How do you find operating in that as a service software space for you? It must be quite exciting yet challenging as well.

[00:07:48] Michael: [00:07:48] Absolutely. And with the current group that I’m working for, this is clearly set as a cloud company, right? No question about it. And to be honest, there are many advantages to it. We see, or we saw in some regions of the world a resisting approach or hesitant approach.

[00:08:06]Central Europe, for example, was very slow to jump on the SAS or cloud train. But I think the final push came definitely with the pandemic. So this made it very obvious what the advantages are. And I think that’s now the final push for the cloud globally, which makes it the de facto standard.

[00:08:24] Andrew: [00:08:24] Yeah, it is.  We were just talking off air about this. It was that it was a niche Cantonese saying around crisis. I think it’s two words and someone shared me. I can’t remember the exact word, but the translation is danger and opportunity. The recent pandemic crisis presented a lot of challenges, dangers, but also there’s opportunity in that.

[00:08:43]So I suppose in terms of your current work, what’s exciting, you most about that opportunity?

[00:08:49]Michael: [00:08:49] To be honest to take the next steps, it’s super exciting to direct the product in the hopefully right direction. And we have specified a couple of key areas and one is clearly the storytelling that we want to focus on. So basically take the next step with FP&A software.

[00:09:06] So with financial planning and analytics software. Yeah, that’s one of the key areas that I want to focus on.

[00:09:12]Andrew: [00:09:12] It’s interesting talking to a finance audience, who are probably very fact-based. What was it? “Facts tell, stories sell.”, I think is the expression nowadays. So what could we do better around storytelling in your mind?

[00:09:26]Michael: [00:09:26] A lot. Coming from the real world where. There’s one thing that I do, a little advertising always but it’s a nonprofit organization so I think that’s more than okay. We’ve been following for quite some time the IBCS, that’s the International Business Communication Standards. It’s a nonprofit organization and what they basically have as their main goal define the notation rules for finance reports. The founders are great speakers so whenever you get, for example, across a Dr. Faisst speech, take the opportunity because he simply explains for so many things. We have standard notations, think of sheet music, think of architecture. Very clear and easy to understand. And he made actually the good example when you google ‘sheet music’ for example, and you look just at the Google pictures. It just all looks very much alike, right? That you can immediately understand, do the same thing for finance dashboards. You get a colorful picture, but you would never be able to say that there is any standardization. That’s a clear recommendation that I would give. Think about first the notations, a clear setup that you want to apply for your reporting. And once you’ve done that, of course you need software. I think for the collaboration for the massive amounts of data. It’s simply necessary to have appropriate software to support you.

[00:10:51] And then the last step is What I want to really push is the storytelling approach, right? Because what we see is also critically viewed from the product management side, we see a lot of colorful dashboards et cetera. But if you critically look at them, what’s the message that you get from them? And that’s often the question where it gets a lot more silent. There’s one rule of thumb that I have, even if you don’t know a report and you look at it, it should tell you a story. If you need to spend five minutes and you still can’t tell a story about a visualization, it’s simply not good. Yeah. And the thing about the storytelling is basically a whole concept around it, right?

[00:11:35] That if you think about an executive monthly report, for them it should not be searching charts, et cetera. It should be like reading a newspaper. When you think of a newspaper headline or a newspaper homepage, where you log in, nicely presented for the target audience, easy to understand a combination of text and visualization.

[00:12:00]Andrew: [00:12:00] I was just thinking, what would a good practice then because like when we develop dashboards I’m just going back to earlier in my career, I’ve been thinking, “Oh my God, it looks amazing.” I did a really great job patting myself on the back, but if it doesn’t have that story, if someone like independently looked at it and said actually I don’t get it. We might, how do you say, take it to heart but I suppose maybe getting an independent view from someone else it’s like, what does this mean to you? Or what can you take from this?

[00:12:25]Probably is worthwhile. At least sense check in with someone is that, would you recommend something like that? Did you have any other tips to make sure that people are presenting the dashboards, the stories in a better way?

[00:12:36]Michael: [00:12:36] Absolutely. I think this will actually be a role in finance, the storytelling. We actually have first customers where you have those, I like to call them also the financial journalists. What they do is they need to be industry experts or for their area. And they will go in and have a look at the data and simplify it.

[00:12:56] What is all analysis and finance about? First, what’s good. Second, what’s bad and what’s the actions that we need to take. And if you think of that, so they look at the good standardized reports, they analyze on different aggregation levels and they find the good, the bad, and then give recommendations. And when you visualize that now, that’s what your newspaper is about.

[00:13:22] You have some visualization. What’s the good, what’s the bad, and there’s always good and bad, without exception. And then they give recommendations. And that’s what I think a lot of the executive reporting should be about.

[00:13:36]Andrew: [00:13:36] Glad you use that. It is going to be interesting to see if we see more financial journalists, even just come up as a role or it forms part of the role. So a journalist said to me once. Why was it, if it bleeds, it leads, right? Which is a very negative way of looking at something, but I’m just thinking of some finance leaders in my past. And like they would absolutely freak out if they saw like a bad message. They hated surprises, bad surprises. So I’m sorta thinking it’s nice that you balance it with the good, but to get people’s attention,  you sometimes have to maybe position the bad, but I like the fact that there’s actions and next steps with it.

[00:14:07] So there’s probably a right and a wrong way doing this, is there?

[00:14:11]Michael: [00:14:11] Yes and no. Honestly, from my experience, there’s something interesting in all of it, right? In every deviation. Because if you think about the thought process, you set a budget of forecast that you wanted to achieve. So you made assumptions. Many people made assumptions to come up to that number that you’re working towards.

[00:14:29] And for some reason you achieve it. Overachieve it or underperform and finding those reasons. Where do you have a deviation in your initial assumptions we will grow in a certain region. Those people will over-perform in sales, in performing consulting projects, et cetera. Obviously there was something wrong or something is going extremely well and both things I think are super important. If you find out where do we have issues you need to fix them. If you find out if something is going really well, and that can be small things, right? I’m not always talking about million deviations. If you have a small area where you test something also in absolute terms, a small deviation can be super interesting.

[00:15:12] And then dig into it, find out what’s going right and make it grow. So even from an opportunity side, looking at a business and that’s what we’re all going for. I think this is super interesting to find out where are the little golden nuggets in the picture and make them grow.

[00:15:29] Andrew: [00:15:29] Yeah, it’s just interesting what our audience are going to think because some of our audiences thinking it could be quite challenging and it’s not going good. They’re probably not making plan and others they’re making it. And hopefully you probably have time to go find those nuggets.

[00:15:41] But one thing I think they should all be doing. We were discussing this as well is understanding the relationship between risk and return. And that’s something we probably should always be scanning for. It’s impending a forward-looking risk management. What might materialize, what do we need to be doing about it now?

[00:15:57] Are there any sort of tips you could share with our audience, Michael, on how to effectively do that better?

[00:16:02]Michael: [00:16:02] To be honest, I think that’s the most natural thing about business and business decisions, there’s always risk and return. And I think this should probably be part also of your storytelling of your recommendations, right? Because if you recommend something, for fixing problems, but also there, you fix something but there might be a risk attached to that. So I think having this full view of the good and the bad or the risk and the opportunity also in the story that you’re telling, I think that’s the essence of what it’s all about.

[00:16:36] Andrew: [00:16:36] Yeah. Now that’s a really good point because I think it adds some additional foresight to the insights. So let’s say the good and the bad is probably the insight piece. And then the foresight piece this is what’s going on now. And we’re keeping an eye as well on what might happen.

[00:16:49] And we need to call this out and it’s up to you in business, if you want to do something about it, but here you are.

[00:16:54] Michael: [00:16:54] That’s actually full transparency, right? That’s the full transparency. When you make a decision that’s then well-prepared for such a decision that you have all while the options, the risks and the opportunities on the table.

[00:17:07] Andrew: [00:17:07] Yeah, I don’t know if you found this yourself, Michael, but sometimes we’re very good at spotting what needs to happen to get to the  XYZ? But some of the decision-makers are ABC still, they haven’t quite got there. Probably, maybe not our strength probably from our training or whatever to help people get from ABC to XYZ but have you seen any people who’ve been able to do it effectively, like leveraging software or being able to build it up themselves or articulated themselves.

[00:17:35] Michael: [00:17:35] Well I’ve mentioned before, right? There’s multiple steps. I think the software decision is an important one to get this support, I think with the standardization and the notation rules, you don’t need to reinvent that. Really there’s good organizations.

[00:17:51] Andrew: [00:17:51] That’s a good leg up. Yeah. Yeah.

[00:17:52]Michael: [00:17:52] And honestly this is a big thing, right?

[00:17:55] Have a look at what they have to find. And then do you want to take it over for your organization one-to-one or do you want to make small adjustments to it? But if you have a software plus a clear standardized reporting set with notations, easy to understand, and there’s a last piece, then the storytelling approach, right?

[00:18:14]Easy to understand good reporting. I think if you have achieved that, there’s a lot done.

[00:18:20]Andrew: [00:18:20] I think you’ve encapsulated there is get the speed to insight faster. It’s like leverage the technology, leverage what’s around you, standard notation, things like that to get to the insight faster, allows you to focus more time on the story piece and putting that together.

[00:18:34] Michael: [00:18:34] And there’s a lot that we just made in three bullet points. But with the right software set up you have immediately done a huge speedup, a huge collaboration that you enable.

[00:18:46] Andrew: [00:18:46] Collaboration is a key word.

[00:18:48] Michael: [00:18:48] With many people on the same system, the single source of truth, everybody working on the same data set.

[00:18:54] I think there’s a lot in this, pick a good software for this. There’s a lot in that told already where you will profit as an organization massively.

[00:19:03]Andrew: [00:19:03] Great advice, Michael. You’ve been giving us great advice, but I am curious though, what’s been the best bit of advice you’ve ever received?

[00:19:10]Michael: [00:19:10] That’s a good one. Honestly, stay true to yourself, probably. And one that we touched upon before,  I really never had such a target vision of my career. This one thing that I was going after, that’s really what I did over all the years. Just really be passionate about what you do at the moment.

[00:19:30] But having your eyes open the next opportunities that come up, but I was never really going after the one position that’s out there. And when I look at it, you could say that in my career, it was an up and down or sideways. But looking back, I see a very logical path now. And it all makes sense.

[00:19:47] Andrew: [00:19:47] Yeah, when you recounted your experiences as journey, and it is that a bit of a journey. Like it actually sounded really fascinating. All the different experiences you picked up. And you still have that passion, it comes across like we’re on a video link here but like your passion comes across. So I think that’s great advice for our audience. Be true to yourself, know what you want, but be open to other opportunities that come up  even if you might feel sideways. Or up or down. It actually all feeds in and actually will make sense.

[00:20:13] So that’s really great advice. Look, in terms of resources our audience could go check out, you mentioned IBCS. Are there are any sort of other books, documents, white papers, our audience can go check out that  they might find useful.

[00:20:26] Michael: [00:20:26] That’s the one. I am currently into a lot. No, I would go with this one. That’s my clear recommendation for the moment.

[00:20:33]Andrew: [00:20:33] Yeah.  I’ve skimmed over it myself. I actually think it’s a really great concept. Because we have standards around presentation of financial statements, which is probably very traditional. We’re in a new age. We’ve software that can enable us to get to insights faster.

[00:20:47] And if we present them in the same way, I think that makes it easier for other people to collaborate on them. And share, challenge insights and stuff, and things like that and make it better, get to the key messages faster to storytelling faster. So I think, yeah, definitely worth checking out.

[00:21:01]Michael: [00:21:01] And it’s a concept. When you hear about it for the first time, it just feels right. And that’s always, for me, a good gut feeling indicator. If you hear something, that’s just it totally makes sense. And you actually started questioning. That’s true. Why are we not doing that already?

[00:21:18]Andrew: [00:21:18] Yeah. It seems so simple. Oh yeah. Why don’t we do that? Because like if is it music scores, they have their standard notation and things have to go in the right places. Yeah, great point. I encourage our audience to check that out.

[00:21:28] And if they wish to continue the conversation, Michael, with you, where’s the best place to connect with you at?

[00:21:33]Michael: [00:21:33] LinkedIn. Always. Just reach out I’m active on LinkedIn and extending the network everyday. So LinkedIn is the place to go.

[00:21:41] Andrew: [00:21:41] Awesome. I will put those links into the show notes and I suppose, look, you shared fantastic advice about your career journey and as well as some really key tips around storytelling, risk management and being true to ourselves. Is there any other parting thoughts you might have for our audience before we wrap up?

[00:21:59]Michael: [00:21:59] Maybe as the final recommendation, coming back to the things that we’ve talked before. Don’t take anything for granted, critically reflect on the reporting also that you have today and ask yourself the simple questions. Am I telling already a story? Is it easy to understand, is it targeted at the right audience?

[00:22:18] Because let’s be clear. A detailed middle-management report with some very operational details is not the same report that you would want for your executive board. So I think critically reflecting on what you have today, question that, and maybe also start to change process. That would be my last summary message.

[00:22:41] Andrew: [00:22:41] That’s awesome. That’s awesome, Michael. Thanks.   With that thing, with that change process. That is the one constant in this ever changing environment. It’s change is still a constant, so a great way to wrap up the show, Michael, thank you for being such a great guest mentor in Strength In The Numbers today.

[00:22:55]Michael: [00:22:55] It was great. Thanks for having me. And let’s do this again some point in the future.


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