Avoiding the Corporate B.S. Trap with Investors: Four Rules for Communicating Clearly
By Joe Miller
A recent story in The Wall Street Journal highlighted the myriad challenges we face in navigating today’s swell of misinformation. In a piece titled, “Fine-Tune Your B.S. Detector: You’ll Need It,” Elizabeth Bernstein offers common-sense suggestions to keep in mind: e.g, check information sources, look for supporting evidence, don’t necessarily trust your instincts, maintain a healthy skepticism.
Valuable advice if you’re a consumer or retail investor? Of course. But what if you’re on the other side, as a CEO or CFO of a public-held or want-to-be-publicly-held company trying to communicate your company’s potential to a suspicious institutional audience? As in real life, speaking slowly and clearly is always a good idea. Here are four more rules that will help ensure your communication with investors is believable and reliable.
1. Use plain English. We have the tendency to talk to ourselves inside our companies, using our own secret set of idioms and acronyms. The problem is no one outside the company understands what the hell we’re talking about. Use plain English to explain what each of your business units does and what problems your products or services actually solve.
2. Be precise. Vagaries are best left to the vague, and obfuscating facts and financial metrics will only instill uneasiness. You have a business that’s striving to achieve goals and post financial gains that will impress existing and prospective investors. Be as precise as possible about your results to date and your goals for the next six, 12 and 24 months. Have a five-year plan you can speak to. If you can’t be reasonably precise about a particular matter, explain why.
3. Drill deep. Investors want to have a look under the hood. Use your investor presentation or earnings call to showcase strengths of your company that might otherwise be overlooked or, worse, misunderstood. We always recommend using these meetings to throw a brief spotlight on an unsung unit or team that is making a significant contribution to your company’s success. Detail what the group does that why their contribution is meaningful to your bottom line.
4. Frame your story in context. Finally, how will your company benefit from broader trends, either within your industry sector or socioeconomically? To whatever extent you can, show that your company is thinking big-picture and is well positioned to take advantage of larger forces.
It’s gotten even harder over the last year and a half for young companies to cut through the noise and be believed by key stakeholder audiences. Assuming you have a great business model, clear, consistent communication and an appreciation for context can go a long toward establishing your company as an attractive investment opportunity in the quarters and years to come.
Joe Miller is the founder of Vermont-based public relations firm Miller Clearly LLC and a senior advisor with the Westmeath Netsortium global network.