Budgeting as alignment & storytelling

🛠 THE CFO EFFECT PLAYBOOK (Part III)

Step 1: Budget as a story instead of a spreadsheet

Every strong budget should answer three simple questions in a story form:

1. Where have we been?

   • Anchored in actuals.

   • “Last year we grew 15%, with strong retention but margin pressure from freight.”

2. Where are we going?

   • Tied to strategy.

   • “This year, our top three priorities are expanding into mid-market, improving gross margin, and reducing churn.”

3. How will we get there?

   • Linked to initiatives and resource allocation.

   • “We’re funding sales hiring in North America, automating fulfillment, and building a new analytics module.”

This is why I love bridges (LYA → plan). They make the story visual.

• Revenue bridge: last year’s actuals → volume growth → pricing → churn → new product.

• Margin bridge: last year’s GP% → supplier savings → logistics → mix.

• OpEx bridge: last year’s run-rate → headcount adds → new systems → efficiency cuts.

A bridge tells the story of change. A spreadsheet just lists numbers.

Step 2: Alignment in Practice

So how do you actually use the budget to align?

1. Start with strategy, not numbers.

   • Before finance builds anything, leadership must agree on 3–5 company goals.

   • These become the “chapters” of the budget story.

2. Gather initiatives, not wishlist.

   • Don’t ask departments for “budget requests.” Ask them: “What initiatives will you run to support our strategy, and what impact will they have?”

3. Score and prioritize.

   • Use frameworks (ICE, ROI, IRR, ROIC) to rank initiatives.

   • Make trade-offs visible. If you fund X, you can’t fund Y.

4. Communicate transparently.

   • Share not just what got funded, but what didn’t and why.

   • This builds trust, even if people disagree.

5. Publish a one-page summary.

   • Every employee should be able to see:

     • Our goals.

     • What we’re funding.

     • How success will be measured.

T>vvv Everyone knows what the company is betting on this year.

Step 3: Storytelling to Stakeholders

Budgets don’t just align internally. They also tell a story externally.

• Employees want to know: “Where are we headed, and how does my work connect?”

• Board members want to know: “Are you balancing ambition with discipline?”

• Investors/lenders want to know: “Will you hit your targets, and what’s the downside protection?”

How you present the budget matters as much as the numbers:

• For employees: use plain language, visuals, and connect to their day-to-day work.

• For the board: highlight trade-offs, risks, and scenario planning.

• For investors: show cash runway, funding needs, and capital efficiency.

Don’t drown them in rows. Tell them the story.

Visual Storytelling Beats Rows

I can’t emphasize this enough: 200-line spreadsheets don’t inspire confidence.

• A revenue bridge shows exactly what’s driving growth.

• A waterfall chart shows margin improvement by initiative.

• A headcount plan by function shows how resources shift.

• A roadmap with milestones shows how bets unfold.

Numbers are necessary. But visuals tell the story faster and make it stick.

Here’s the pattern I’ve seen across industries:

• Average CFOs try to build accurate models that no one uses.

• Great CFOs build usable budgets that align the company and serve as a compass.

The whole difference is about the storytelling.

When people see themselves in the budget story, they buy in.

When they buy in, they execute.

When they execute, the numbers start to match reality.

A budget without alignment is just a spreadsheet.
A budget with alignment becomes a shared roadmap.

Takeaway for You

As you finalize your budget this year, don’t stop at the numbers. Ask:

• Does this budget clearly tell the story of where we’re headed?

• Does every function see their role in delivering it?

• Can I explain the budget on one page to an employee or to the board?

If the answer is yes, you’ve turned your budget into more than a financial exercise.

You’ve turned it into a unifying narrative.

That’s how CFOs lead. Not just by allocating capital, but by telling the story of the company’s future.

Next Week’s Episode:

🔜 Capital allocation

The best CFOs invest like portfolio managers.

Every company has more ideas than resources.
New products. New markets. New systems. New hires.
But capital, time, and talent are all finite.

So the real question isn’t “What’s possible?”
It’s “Which bets deserve our limited resources?”

Next Sunday, I’ll break down exactly how to approach capital allocation like a pro:

✅ How to use the ICE framework to filter high-impact, realistic, and executable projects
✅ How to apply financial rigor with NPV, IRR, and Payback, without falling into spreadsheet illusions
✅ How to combine strategic judgment + execution reality to pick the bets that compound, not just look good on paper

Because the best finance leaders sequence the right opportunities instead of chasing them.

If you want to turn your capital allocation into your growth engine, you won’t want to miss this episode.

Disclaimer:
This content is for informational and educational purposes only and should not be construed as financial, legal, or professional advice. Always consult with a qualified advisor before making any business or financial decisions. The author and publisher disclaim any liability for actions taken based on this content.

Talk soon,