Dirk Lever, AltaCorp Capital Inc.
Each year when your company prepares its annual report it has a great opportunity to set the tone for the next year. Many companies already do this, especially when it comes to the ‘art’; the look of the annual report typically sets the ‘look’ for the rest of the year (quarters, business marketing, product marketing, etc.). Let me suggest that you not stop at the artwork. Consider what you can do better in all aspects of your business reporting and marketing – and use the annual report as a launch pad to refresh your company’s look.
The great thing about the annual report is that it typically involves a lot of internal resources; you have everyone’s attention and focus. This is the time to consider potential changes to your overall reporting.
When Should You Start the Process? (How about Never Stopping!)
Perhaps think of this in a different way: never stop considering how you can present your company in a better light. It is an ongoing process; a form of continuous disclosure. So throughout the year, keep a diary of ideas that you believe can help better deliver your message (from meeting notes to feedback from calls, your diary will be invaluable). And a great time to present your ideas to the people who will make key decisions is when the annual report is ‘on the table’.
Mock Up Your Ideas
Mocking up your ideas will present a clearer picture to decision-makers in your company. Show how your concepts apply not only to the annual report but to quarterlies and marketing as well. Explain issues clearly and how a new approach can address them. And be flexible because you may just start an entire revamping process.
Does the Message Align with Corporate Strategy
Try to always keep in mind your corporate strategy. Do your presentation style and materials fully align with the strategy? Can investors truly comprehend how the corporate plan reflects the strategy?
Simplify, Simplify, Simplify
Think hard about your company. What are the three or four key points about your business that you want potential investors to understand most? Are you conveying this unambiguously? If not, make it so.
Consider Apple Inc., a firm with marketing genius and technologically complex products. Apple spends little time advertising the technological complexity and a lot of time relaying a simple message. Former Apple CEO Steve Jobs was brilliant in his messaging: a silhouette of someone dancing to music with his or her iPod, monochrome simplicity. Now take that concept of product marketing to the marketing of your business. Do the key points your company is trying to convey come through loud and clear? Or are you drowning people in detail and losing the message?
Deliver the Key Takeaways at the Beginning
Delivering your business message should not be like a ‘who done it’, with the mystery solved in the last pages. Your corporate messaging should be easy to understand, with the key points you are trying to convey upfront and obvious. It should not matter what type of report or marketing material you are preparing, the principal takeaways should be clear, simple and upfront. It is amazing how many companies insist on the mystery novel approach – do not do it!
Are You Changing Your Reporting? Warn your Audience!
Every once in a while you will need to overhaul your corporate reporting because the company grows, segments or accounting rules change, or some other reason. Rather than springing the changes on investors, warn them. Professionals have probably built corporate models of your company (some quite complex) and changes may lead to potentially significant modifications in how they enter data into these models. Serving notice of changes will be very much appreciated. Consider that rebuilding models may take hours but if there is no warning, the process could take days or weeks. Those are days or weeks when your company would be ‘in limbo’ or – worse – not properly understood. Enbridge Inc. is making such a change after warning the investment community – and the company will have historical data recast a month before reporting its first quarter in the revised format.
Pull it all Together
When it comes time to set the tone for the upcoming year, use the opportunity wisely. People are curious and will be tempted to look at what you are doing – so make sure they like what they find and that they find the messaging you intend. Make it simple, clear and concise. Remember Apple.
Dirk Lever is Managing Director, Institutional Equity Research, AltaCorp Capital Inc.