The annual report is an important tool for telling your story of transformation.

Thriving organizations must always have an eye on the future. Why should your supporters stay with you and how will you attract new supporters who share your mission? Even though your annual report is — by definition — a review of last year, it’s really an opportunity to share the vision of your CEO and leadership team with your key stakeholders.

Here’s the question that every CEO needs to address in their vision for the future: How do you stay relevant and compete in this ever-changing world? The answer is that it’s all about transformation.

And yet, transformation doesn’t necessarily involve one single top-down initiative. Al Kent, David Lancefield and Kevin Reilly, PwC executives, writing in Strategy + Business argue that transformation is often a series of smaller, deliberate steps where adaptability  becomes part of doing business. The annual report can be one of these critical steps. Let’s take a look at how leaders and marketing execs can apply these principles to the annual report theme:

1. Creating a strategic tool. How does the CEO and leadership envision the future for your organization? Start with the strategy. What are your objectives for achieving success – and more importantly – how will you continue to evolve? Then align the strategy with words and images that convey your story with distinctive branding. For example, we designed six annual reports for Reading Hospital as they transformed from a local hospital to a regional healthcare powerhouse. The CEO used the letter as a way to define his future vision for enhancing and sustaining wellness beyond the local area. Each year, the annual report laid the groundwork in defining the plans for a major transformation that resulted in a new state of art facility ushering in a new era of healthcare from the Reading Health System to what is now a network of hospitals under the Tower Health System.

2. Building a trustworthy transformational brand. Your brand is what others think of you. What are you doing to communicate your vision as a trusted brand? Even in the age of social media, actions still speak louder than words. Create consistent messaging that reinforces a growth mindset for your clients, beneficiaries, supporters, staff and community leaders. For the nonprofit Children’s Aid, the key was delivering an annual report that featured success stories that demonstrate how their comprehensive solution was far more effective than piecemeal efforts offered by other charitable groups. Children’s Aid provides 360 degree support to children with a team of teachers, coaches, social workers and healthcare providers who work with children and their parents to create an interrelated support network. Success is achieved only when you address all the problems facing a child. Building trust is an ongoing effort even for an institution that is over 165 years old. The whole really is greater than the sum of its parts when you can show the results of interrelated services with long term impact.

3. Establish a framework for defining success. Most organizations are working on many cylinders at the same time. But not everything can – or should— go in the annual report. When we develop a theme for the annual report we use it as a litmus test for what should go in the report. For example, while working with IPRO, a qualitative health care consultancy, we created a transformational theme, “Improving Healthcare for the Common Good,” and challenged all of the department heads who wanted their initiatives featured in the annual report to tell us how their work improved healthcare for everyone. It elevated the storytelling to express universal truths that could be applied towards the goals of the whole organization.

4. Transform your legacy into an asset. Annual Reports traditionally look back, yet never forget Winston Churchill’s maxim, that history is written by the victors. Choose the past achievements that position you for the future and show how your experience of surviving and thriving makes you a transformational expert. Anniversaries and milestones can be rallying points, but often they fail to do more than just express a nostalgia that doesn’t really move the needle anywhere outside of your inner circle. How can you build upon the past in a way that welcomes more supporters to join you?

Start the transformation
With the ubiquity of the internet, the role of the annual report has changed radically. The annual report itself must transform from a listing and financial record of the past to a vision and messaging tool for the future. It makes more sense to move your financial data and listings to an updatable and searchable database online. The annual report should become your key tool for delivering the CEO’s vision and messaging for the coming year.