Profitability & Cost Management Shared Interest Group

How CFOs and Financial Leaders Can Turn Their Profitability Models Into Living Decision Systems

Companies invest significant time and resources in developing advanced Profitability and Cost Management (PCM) models. A PwC report finds that, on average, 63 percent of executives say they spend most of their decision-making time ineffectively. Despite implementing systems such as activity-based costing, driver trees, EPM platforms, and detailed dashboards, many organizations still struggle to ensure their most robust models have a significant impact on key decisions.

This article provides a practical roadmap for transforming PCM models into decision systems that drive action and deliver results — with specific strategies to help CFOs unlock greater value from their PCM initiatives.

CFOs often overlook whether the real issue lies in the model itself or in how it is communicated. The Perceived Convincingness Model suggests that emotions and the ease with which a message is processed — known as processing fluency — are important factors in how convincing a message is perceived to be. This suggests that PCM models that focus solely on logic, without considering emotional engagement, may not gain traction with decision-makers.

Consider this: In one organization, the finance team delivered their cost model with flawless analytics and clear charts, only to receive polite nods and little follow-through. No one felt urgency or ownership, and the model quickly faded into the background. In contrast, another company tied its profitability analysis to a story about how a neglected product line quietly drained resources from high-potential areas, threatening jobs and market leadership. That narrative sparked real debates, motivated teams to act, and enabled hard decisions. The difference was not in the numbers — it was in how people felt about what the numbers meant.

Real organizational change requires all three elements: mind, heart, and hands.

The Diagnosis: When Models Produce Reports Instead of Decisions

In a financially mature organization, a good PCM model can answer key questions: Which customers are actually profitable? Which activities use resources without adding value? Which margin scenarios work under different cost structures?

Even when a PCM model is robust and technically sound, it delivers value only when it informs business decisions. Ignoring these models can lead to missed cost-saving opportunities, resource misallocation, and unmet profitability targets — exposing organizations to strategic risk and loss of competitive advantage. Yet this pattern of underutilization is common across industries:

·    The finance team builds the model with methodological rigor.

·    Results are presented to leadership committees with structured visualizations.

·    According to recent research, although business leaders may appear interested in analytical models, decisions are still often made using instinct or traditional indicators, while the model itself is reduced to a routine report that rarely influences real action.

This is not irrationality on the part of leaders. It is a predictable consequence of how financial strategy is communicated. Research published in Harvard Business Review, based on experiments with more than 2,000 professionals, demonstrates that visual clarity improves comprehension — but does not increase commitment to execution. In fact, when narrative and metaphor were added to strategy visuals, commitment to execution increased by as much as 22 percent compared to visuals alone. As Bischof and Eppler show, clearly communicating expectations is crucial for translating strategy into action: managers must state precisely what is expected of employees after setting a strategy. Integrating clear communication into PCM model discussions is therefore essential for turning understanding into concrete action.

"Metaphor and storytelling did not change what people understood. They changed how much people cared." — HBR Research on Strategy Visualization

The Mechanism: Mind, Heart, and Hands

For a PCM model to drive real change in an organization, it must work across three levels simultaneously. This is known as the Mind–Heart–Hands principle:

Most PCM programs address the Mind level, and some reach the Hands through technical training. However, the Heart level — which drives motivation for change — is often overlooked. Finance teams are increasingly recognized as a company's decision engine, connecting insight to impact. Consider one manufacturing company whose finance team introduced the 'Value Engine' metaphor during a leadership workshop. The COO initially regarded it as just another report. When the facilitator compared underperforming divisions to misfiring cylinders in a well-tuned machine, the COO related it to his own experience with car breakdowns — and then championed the metaphor, encouraging his team to identify 'friction' points across departments. This shift from technical language to relatable metaphor created a sense of personal ownership and urgency, making the model relevant and actionable for the entire leadership team.

This explains why organizations with equally strong models can have very different adoption outcomes. The key difference is how the model becomes a shared story.

Three Metaphor Archetypes for PCM

Not every metaphor fits every situation. Before exploring these options, take a moment to reflect: which of these organizational cultures sounds most like yours? In work with organizations across manufacturing, financial services, consumer goods, and energy, three types of metaphors have proven especially useful for profitability and cost management programs:

Archetype 1: The Value Engine

This metaphor works best for organizations that concentrate on efficiency and measurable results.

With this approach, executive discussions shift from technical phrases like "driver recalibration" to energizing questions such as "Where is the engine grinding or seizing up?" or "Are we igniting the right cylinders to generate maximum momentum?" This vivid language sparks more dynamic conversations and drives decisions far more naturally than a technical diagram ever could.

Archetype 2: The Journey to Value

This metaphor is well-suited for financial transformation programs with a clear gap between current costs and desired profitability.

This metaphor is powerful because it highlights the steps, trade-offs, and risks involved in decision-making. Rather than framing cost reduction as simple cutbacks, it presents the program as a journey of reorientation toward more fertile terrain — making the approach both more honest and more motivating for the teams who must execute it.

Archetype 3: The Economic Ecosystem

This archetype is especially effective for diversified organizations where profitability varies significantly across business units, customer segments, or geographies.

This metaphor helps make tough conversations about portfolio profitability easier. It encourages questions like "Which parts of the system consume resources without adding value?" and "Which could grow if given the right support?" The ecological framing also makes decisions about divesting or reallocating resources feel less emotionally charged—and it surfaces a technical point: shifting resources in one area creates ripple effects throughout the organization. Recognizing these interdependencies helps leaders anticipate unintended consequences, supporting a more holistic and resilient approach to profitability management.

The 4Fs: Criteria for Choosing the Right Metaphor

Selecting a metaphor at random can be counterproductive. If it does not align with the organization's culture, it may create disengagement rather than commitment. Use the 4Fs test to evaluate whether a metaphor is appropriate for your PCM program:

Practical Roadmap: From Analytical Model to Decision System

Here is a five-step roadmap to put this into practice. Each step is mapped to a widely recognized phase of change leadership — such as Kotter's 8-Step Model or ADKAR — so you can anchor these actions within proven approaches to organizational transformation. Step 1 corresponds to Kotter's 'Create Urgency' and ADKAR's 'Awareness' stage. Step 2 supports 'Build the Guiding Coalition' and ADKAR's 'Desire' phase. This alignment makes it easier for leaders and teams to understand, adopt, and champion PCM as a living decision system.

Step 1 — Define the Transformation Narrative

Before selecting a metaphor, build the story. Define the organization's current profitability position, the urgency or tension driving the program, and the desired future state. This three-part structure — current situation, strategic tension, and desired destination — forms the foundation for the metaphor.

Step 2 — Locate and Prototype the Metaphor

Pay attention to the language people already use in your organization. The best metaphors come from real conversations with leaders and frontline teams, not from outside sources. Choose two or three candidates and map the PCM model's core elements onto each. Test these prototypes with small cross-functional groups — not just finance — and evaluate comprehension, memorability, and engagement. Use prompts such as: "What does this metaphor make you think of?", "Does this image help you see our challenges differently?" "Can you describe a decision where this metaphor would be useful?", or "Is there anything confusing about this image?" These questions surface quickly, whether a metaphor supports understanding or creates friction.

Step 3 — Build the Dual Visualization

A high-impact PCM program requires two complementary visual layers:

·    Analytical layer: the structured strategy map, with drivers, hierarchies, and causal relationships clearly articulated.

·    Metaphorical layer: a narrative visualization that turns that logic into a memorable image, using characters, movement, and a clear sequence over time.

Use both layers together in executive presentations, workshops, and training materials. The analytical layer answers "what and why." The metaphorical layer answers "how does this affect me and what should I do?"

Step 4 — Convert the Metaphor into Operational Language

A key sign of adoption is when leaders use the metaphor naturally in business conversations. When a CEO asks, "Where are we losing fuel in this process?" or a commercial lead says, "Is this customer generating power or just consuming resources?" — the metaphor has become part of the organization's shared thinking system.

According to The Oxford Handbook of Metaphor in Organization Studies, recognizing and regularly acknowledging when team members use a shared metaphor in meetings accelerates its adoption as a central feature of organizational decision-making. A simple public acknowledgment — noting its use in meeting records or offering a brief "language win" — reinforces the practice and helps turn the metaphor into a cultural asset.

Step 5 — Embed Into Governance Rituals

Consistency of use is what transforms a metaphor from a communication tool into an organizational culture. Integrate the metaphorical map into PCM steering committees, business review processes, new leader onboarding, and strategic planning materials. Update it regularly to reflect the program's progress. The map should feel alive — not archived.

Why This Is Especially Critical in PCM

Strategic cost management plays a key role in enhancing corporate sustainability, but profitability and cost management programs face forms of resistance that other strategic initiatives do not encounter with the same intensity. Cost transparency generates political tension. The allocation of indirect expenses creates conflict between functions. Identifying unprofitable segments can threaten established roles and power structures.

Without a narrative that gives meaning to these results, PCM models not only generate incomprehension — they generate defensiveness. People protect themselves from the model instead of using it.

Leaders can manage this resistance proactively. Involving key stakeholders early increases buy-in and reduces backlash. Framing transparency as an opportunity for growth — rather than an audit — shifts focus from blame to shared goals. Creating open forums for concerns reduces defensiveness and builds trust. These steps turn potential obstacles into drivers of engagement.

A well-designed metaphor does not conceal complexity. It makes complexity navigable. It transforms data that threatens into information that orients — and it reframes the role of finance: from cost auditor to value architect.

"People do not execute models. They execute stories. The model must become a story before it can become action."

Conclusion: A Model Without a Story Is a Map Without Territory

No matter how advanced or accurate a PCM model is, its true impact depends on whether it creates shared language, forges emotional commitment, and shapes daily behaviors toward value creation. The ultimate success of any profitability or cost management initiative rests on its ability to inspire leaders and teams to act on its insights—not just understand them.

CFOs and financial leaders who understand this do not sacrifice analytical rigor — they complete it with strategic storytelling. They build two layers of communication: one that informs and one that activates. And they design metaphors that allow people at every level and function to say, with genuine conviction: I know where we are going, I understand my role in this journey, and I am committed to getting there.

That is the difference between a PCM model that produces reports and one that produces decisions.

References

1.     Eppler, M. J., Hinnen, A., & Bünzli, F. (2026). Your strategy needs a visual metaphor. Harvard Business Review. Retrieved from https://hbr.org/2026/02/your-strategy-needs-a-visual-metaphor

2.     Eppler, M. J., & Platts, K. W. (2009). Visual strategizing: The systematic use of visualization in the strategic-planning process. Long Range Planning, 42(1), 42–74. https://doi.org/10.1016/j.lrp.2008.11.005

3.     Frei, F., & Morriss, A. (2023, November). Storytelling that drives bold change. Harvard Business Review, 101(6), 60–67. Retrieved from https://hbr.org/2023/11/storytelling-that-drives-bold-change

4.     Hiatt, J. M. (2006). ADKAR: A model for change in business, government, and our community. Prosci Learning Center Publications.

5.     Kotter, J. P. (1996). Leading change. Harvard Business School Press.

6.     McKinsey & Company. (2019). Decision-making in the age of urgency. Retrieved from https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/decision-making-in-the-age-of-urgency

7.     Rounaghi, M. M., Jarrar, H., & Dana, L. P. (2021). Implementation of strategic cost management in manufacturing companies: Overcoming cost stickiness and increasing corporate sustainability. Future Business Journal, 7(1), Article 31. https://doi.org/10.1186/s43093-021-00079-4

8.     Salvado, J. C., & Vermeulen, F. (2025). You should be able to boil your strategy down to a single clear visualization. Harvard Business Review, 103(4), 98–107. Retrieved from https://hbr.org/2025/07/you-should-be-able-to-boil-your-strategy-down-to-a-single-clear-visualization

About the Author

Pedro San Martín is a finance transformation leader specializing in Enterprise Performance Management, profitability strategy, and decision architecture. With more than 25 years of experience across PwC, IBM, Deloitte, and Asher Analytics, he advises CFOs on redesigning management accounting to drive enterprise value. He is currently with Asher & Company, where he leads a joint venture responsible for the PwC Strategic Finance Center of Excellence for PwC Interamericas. He can be contacted at psanmartin@asher.company