communications strategy

100 Days: Time to Take a Hard Look at Your Communications Strategy

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There is always a lot of discussion in the media and around office water coolers about the first 100 days of a president’s term. What’s been accomplished? What’s on deck? Truly, a lot can be accomplished in 100 days whether you are starting a new job, launching a new campaign, building a business, or leading the free world.

The president is the CEO of the nation, so it makes sense to evaluate the leadership landscape at this point. While it’s unrealistic to think that the first 100 days hold the key to an executive’s tenure…it certainly sets the tone.

For any executive, the 100-day mark is a good opportunity to come up for air and assess how focused tactics are addressing your broader communications strategy. It’s also a good time to (re)address how you talk about your strategy publicly.

As you look back on the first 100 days of 2017, consider where your organization is headed, what is working, and where you might need a course adjustment.

The Big Picture

It’s important in business (and in life) to take a step back to think about the big picture from time to time. Understandably, a long term communications strategy can get lost dealing with the day-to-day challenges and adjusting tactics to fulfill immediate expectations. So, be sure to remind yourself to take a step back, re-evaluate, assess metrics, and relaunch.

When it comes to your larger communications strategy, considering these big picture items will help you manage expectations both with your team and your stakeholders. Consider how you talk about your goals, expectations, and the steps to success. If you feel out of your depth, it may make sense to find a corporate communications partner to walk you through this process.

Recognize When it’s Time to Pull Up

Recently, I met with the executives of a newly launched business. The experience was a great reminder of the importance of keeping the big picture on the radar. We spent the first 30 minutes of the meeting discussing business challenges; how they were addressing those challenges; and how to grow revenue while maintaining—or growing—profit margins.

It was a good tactical conversation. But it wasn’t why I had been invited there. This company was concerned that they were under-valued compared to their peer set. And while all of the tactics to improve operations and financial results were absolutely critical components to addressing the valuation challenge, the team’s strategic goal had gotten lost in their tactical focus.

It was time to pull up. I took them through a process designed to help them assess progress to date; revisit their broader challenge; and address market changes, competitive shifts, and investor perception.

Now was also the right time to take a look at how they had communicated their strategy to investors. Did they know what we were working toward and why? Had we shared critical milestones, success metrics, and off-ramps?

In the first days, months, and even years figuring out what business model to follow and what broad communications strategy will propel an organization forward most effectively is difficult. Sometimes you are so focused on growth and getting the right systems in place that communications takes a backseat.

But having a communications strategy in place, even one that is not perfect, will help you avoid headaches down the road. Suppose you know that you will need to ease back on production during the Q3 or Q4 next year. It will be a lot easier to explain a slow quarter next year if you keep investors in the loop as to your broader strategy starting now.

Keep in mind that strategy shouldn’t be a secret. Secrets = surprises. And surprises are interpreted as risk by investors.

So, as we look back at the last 100 days of 2017. Ask yourself and your team some difficult questions:

1. Have you clearly and publicly articulated your strategy and goals? If the answer is “hmmm… maybe not,” chances are good that your team’s hard work on all those tactical concerns will go unnoticed or unappreciated or unvalued. Or, what’s even worse, the hard work will be viewed as “noise” without an anchor to a broader goal.

2. Have you shared the key success metrics that accompany your strategy? Remember that you have some control over your own evaluation. If there are metrics or milestones that you have accomplished, but which are likely to be overlooked by external analysts, highlight them yourself.

3. How about some of the key tactics that you’ll employ to achieve those goals? Once you have articulated your goals, strategies, and key metrics, anchor the tactics in those goals. Point to, for example, cost reductions, research and development, implementation of new inventory tracking software, etc.

4. How does your broader strategy fit the operating environment? As you execute the tactics of your strategy, your market, and your competitors, your business also changes. Take a moment to pick your head up to assess your operating environment. The strategy you chose to govern the organization when you first launched may not hold up today.

5. What is your strategy to communicate progress against your plan? A steady drumbeat of updates (small and large) lets investors know that you’re chipping away at your strategy. So designate someone to play the role of chief communications officer who will decide when and how to communicate with investors.

Developing a communications strategy can be quite a challenge, especially for new businesses. Our experts have helped teams like yours take a step back, find the right strategy, and execute the plan. Let’s talk about how how we can help you!

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annual report

The Evolution of the Annual Report: From Financial Report to Corporate Persona

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Annual reports have evolved over the years from a dry vehicle for conveying information about a company’s financials to a critical tool to communicate corporate strategy. An expertly communicated annual report has the power to influence the way your company is perceived by those who matter most.

There are challenges to unleashing the full potential of the annual report, however. To make corporate financial information more accessible and easily understood, SEC regulations have attempted to standardize the delivery of key operational and financial information.

But there is still plenty of opportunity to effectively leverage this piece as a vehicle for expressing your company’s vision, mission, and values. The annual report is one of the most widely read communications your company will release. So, there are plenty of benefits to rethinking your firm’s customary approach.

Factors that Influence Stakeholders’ Perception of the Annual Report:

1. Content

It is obvious that the content of the report influences how investors and other stakeholders view your firm’s reputation. But what is not so obvious is that how you understand the content is not the same as how your investors interpret the content. An annual report is a great time to practice your corporate storytelling skills.

Of course, investors will zero-in on financial performance, but the way in which this information is presented will affect perceptions. The Letter to Shareholders and the Management Discussion and Analysis sections of the annual report offers an opportunity to share a transparent and honest discussion of market conditions, corporate strategy, and investment priorities.

Being transparent and honest in your communications is not as easy as it sounds. Internal expectations based on previous performance can affect how you view this year’s performance. Corporate strategy and market conditions may be in flux.

For these and other reasons, it can help to bring in external corporate communications experts and marketing specialists to provide a clear-eyed perspective on the annual report message. Just as you use auditors and financial experts to ensure the accuracy of your financial reporting, it can also help to have experts to support your messaging.

The sweet spot for content is delivering an annual report that accurately conveys the facts, gets the message across, and effectively communicates your company’s past performance and future expectations.

2. Design

Design alone won’t save terrible earnings. So, don’t spend a lot of time putting together a slick design hoping to distract stakeholders from the unfortunate truth. Still, your company’s annual report should be consistent with your corporate brand.

The most successful and admired companies find subtle ways to stamp their identity throughout the report. For example, Warby Parker, an online eyeglass company, created an interactive annual report in the form of a calendar with 365 company milestones and figures. Keep in mind that through consistency and authenticity, the annual report can really work together with other corporate communications to manage your firm’s reputation.

3. Delivery

One other factor to consider that has ramifications for how your stakeholders perceive your company is how and when you deliver the report. Of course, timely filing of the annual report is table stakes. But also consider utilizing additional delivery channels including video and interactive infographics.

In addition to the above general guidelines, you may want to revisit these excellent tips about how to make your annual report one of your best assets including:

  • Think of the annual report as your “financial brand” for the year: This way you can repurpose parts of the report into other communications documents, such as facts sheets, the proxy, and the investor deck.
  • Design your annual report to be easily segmented: Make it easier to repurpose stand-alone parts of the annual report for social media, for instance, by making the report easier to separate into parts.

Conclusion

Yes, annual reports serve several purposes. They provide a company’s financial information, amplify a company’s marketing message, and remind shareholders of a company’s strategy. But first and foremost, firms need to think of the annual report as a key tool in their corporate reputation management toolbox.

The annual report is an important vehicle for connecting with investors to give them more than just a financial picture. Annual reports can—and should—also give clear insight into your company’s vision, values, culture, and internal operations.

Ultimately though, the annual report is only one part of a wider corporate communications strategy. We specialize in helping to construct your corporate narrative at Audacia Strategies. There’s no substitute for having a clear picture of what your company stands for and where you are going. Contact us today and let us help you bring everything into focus.

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holding statement

Controlling a Crisis is Hard. The Right Holding Statement Can Help.

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When an incident or crisis occurs, the public has a right to know what happened and what steps are being taken to resolve the issue. Keep in mind, though, that there are better and worse ways to communicate during a crisis. Too often companies make the mistake of throwing together a holding statement only to further damage their credibility.

With everyone’s first instinct being to shoot video with their smartphones and immediately post to social media, the need to respond quickly during a crisis is apparent. For this reason alone, it’s important to have a crisis management plan in place that you can immediately activate in the event that something goes wrong.

The Holding Statement: Critical to Maintaining Credibility

One crucial, but often overlooked piece of any sound crisis management plan is the holding statement. Having this short statement on hand helps you avoid the dreaded “no comment” statement, which the public perceives as a disavowal of responsibility.

It also prevents the media from writing speculative stories about the organization and the situation. While you may not have the ability to control the crisis, you do have the ability to control the narrative. In other words, a skillfully written holding statement maintains credibility in the face of a crisis.

Crisis Communications is a Delicate Business

During a crisis, communications can have one of two effects: the statements released can mitigate the damage or make a bad situation worse. So, what can your organization do to ensure that your communications calm the storm instead of churning up more trouble?

1. Create Pre-Crisis Holding Statements

What holds true on the basketball court, holds true for crisis management—there is nothing worse than being caught flat-footed. Just as champions on the court run drills to prepare their defense for game day, champions in crisis management run drills to prepare their responses for an emergency.

But before you can prepare those responses, you need to have a good crisis management plan in place. Start by anticipating possible risks and vulnerabilities; then put together holding statements for each one. Remember to think broadly about the types of crises that might impact your company. This could be anything from safety issues to natural or manmade disasters to social media frenzies.

The good news here is that if you take the time to identify potential crises and think through the right statements ahead of time, while heads are cool, you set yourself up for saving your credibility should the worst happen.

2. Consider Distribution

Holding statements can be issued via traditional distribution methods, such as press conferences, but given the current pace of communications and multiplicity of channels, including social media, having multiple distribution methods makes sense.

This means that you actually need several variations of each holding statement you create. Create channel-appropriate statements for each of the following: traditional media distribution, social media video messaging, talking points for key spokespersons, social media posts, customer messages, website updates, and whatever other channels make sense for your organization.

3. Strike the Right Tone

Tone is very important. In the event of a crisis, you will want your holding statement to acknowledge that your company recognizes the need to cooperate with media and to inform the public without sounding authoritative.

If your communications team isn’t careful, the desire to show that you are in control of the situation can come off as arrogance or indifference to the injury that others are experiencing.

Holding Statement Keys: Simple, Informative, Timely

Once you have thought through your crisis strategy with an eye toward maintaining your credibility, keep a few more details in mind as you prepare your actual holding statements.

Keep It Simple: No speculation.

The holding statement is a confirmation of known facts, expression of awareness, and—depending on the situation—expression of appropriate and authentic empathy. Organizations are most often judged on the authenticity of their response in times of crisis.

A cold, legalese message during an emergency (particularly one with physical, financial, or environmental harms) can be a turn off and result in questions about credibility and brand promise.

Informative: Stick to the facts—Who, What, Where, When, How, Now What?

Talk about the actions your organization is taking and the priorities you will address. As with all communications, make sure that your holding statement aligns with key corporate values (e.g., prescription drug safety is our number one priority). Do NOT address rumors, speculation, or unconfirmed reports.

Make sure that key spokespeople are identified and that all inquires are routed through these people. If you skip this step, contradictory statements could end up adding to the chaos, which is the last thing you need. Collaborate with your legal team ahead of time (ideally as part of your crisis response planning), to have agreed upon language and an approval process in place.

Timely: As in, within an hour.

The initial response should be released within an hour of the occurrence of the issue or incident and should state, at a minimum, when the next update is anticipated. You can’t afford to let the rumor mill get ahead of your official statements, so make sure a clear chain of command is in place.

Time is your biggest enemy when it comes to dealing with a crisis. To be ready to spring into action, update your plan and role play scenarios with relevant team members at least twice each year.

At Audacia Strategies, we understand that dealing with a crisis is stressful. That’s why we have systems in place to guide you through. Let our team do what we do best so that you can get back to what you do best. Schedule your consultation and let’s get started.

Do you have your holding statements together?
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executive transition

Executive Transition Part II: Preparing Your Executive

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If you missed part I of our series on executive transition, click here to read more about how to prepare for planned or unplanned c-suite changes.

Last time, we discussed how to prepare your organization for an executive transition. Because stakeholders watch these types of big transformations carefully for any signs, positive or negative, of what the future will bring, it is crucial to take the necessary steps to get everyone on the same page.

By far, the most important element of a successful c-suite transition is properly preparing your executive. This is where investor relations officers and communicators really earn their keep. Both roles play a critical role in supporting and enabling a successful executive transition.

Prepare to prepare your new executive.

First, take some time to gather key resources to help your new executive transition smoothly. For instance, create a portfolio including the most recent corporate overview, key messaging statements, shareholder overview, previous public statements, an analysis of the competitive landscape, key events/timing, etc.

Next, before you begin strategizing, put yourself in the shoes of your new executive. Ask yourself and your team crucial questions, for example: Is the new leader, whether interim or permanent, an internal hire or will she need to be brought up to speed on your organization’s culture?

Keep in mind that while the new executive may have been brought on to accomplish specific goals, the more she knows about the organization as a whole, the better able she will be to accomplish these specific goals. So, don’t be afraid to ask the new executive what support she needs from you during this transition period.

Answers to these questions will help you better enable your new executive to smoothly enter her new role. Once you’ve asked and answered these critical questions, you can now put yourself in the shoes of your key stakeholder groups and begin the hard work of prepping your executive for the transition:

1. Define key messages.

As discussed last week, executive transition = risk. Our communications goal throughout this process is to make the change appear less risky, insofar as possible. An orderly transition will give investors, employees, and customers confidence that the company, whether public or non-public, is in control of the transition.

What does this look like in practice? It means, at a minimum, defining key messages around the following: (a) any insight you can provide into the reasons for the change, (b) why the new executive is the right hire at the right time, and (c) reinforcement of key company strategic messages.

(a) Why did the previous C-suite executive leave?

Present a clear rationale for the change, whether it was by choice or not. That said, word choice in describing the transition is absolutely important. Aim for language that is natural, concise, and respectful to all transitioning parties.

Keep in mind that communications during this time can be a delicate balancing act between signaling Board control over the transition, legal sensitivities, and acknowledging organization strategy. So, be prepared for (and even welcome) multiple perspectives as this verbiage works through internal approval processes.

Even under the best of circumstances, there will be speculation about why the previous executive left. This makes it even more important to ensure that lines of communication are clear. Transparency will ensure that the company isn’t perceived as holding back information from stakeholders.

Whatever words you choose, be sure to avoid anything that makes transition communications appear confusing or bitter, as this can stoke speculation, spook investors and employees, and make for a generally unproductive business environment.

(b) Why is the new executive the right hire at the right time?

It’s important to have a clear message about why the new c-suite executive is the right man or woman to take on the job. Discuss the strategic criteria for this hire. What differentiates your executive from his or her peers? Leverage any previous experience leading similar organizations or leading through similar market changes.

Especially if this transition was unexpected, anything you can say to emphasize that your new executive has been preparing to step into this ideal position at this moment, is helpful. Don’t be afraid to think big here. Talk to your Board and your new executive about his vision for the future of the company and find creative ways to work that into your messaging.

(c) How does this support the company’s strategy?

Finally, make sure to re-emphasize the company strategy. This applies whether the overall strategy is changing (e.g., because the previous CEO was fired due to poor performance in shifting market conditions) or the basic strategy is staying the same, while the new leader is free to make small tweaks to business operations.

Either way, it’s a good time to revisit the corporate vision and mission to remind stakeholders that the fundamentals will remain solid through this period of transition. Bonus points for showing how the new executive has demonstrated strengths in key strategic areas.

2. Allow for acclimation.

To the extent possible, give your executive some time to get her feet on the ground and learn more about how the organization runs. Most executives will want at least a 30-day transition period. However, depending on the business circumstances this is not always possible. It’s best to be upfront with your executive about the timeframe from the beginning.

At the very least, be sure to carve out time before key meetings with employees, investors, and customers to prepare. Discuss the stakeholder group personalities, hot buttons, previous conversations/promises/expectations, and the competitive environment.

3. Consider key prep strategies.

Initial interactions with key stakeholders should reflect: (a) reasons the executive chose your organization and (b) assurance that the early stages will be about listening to key stakeholders to best understand their view and expectations for the organization.

If possible, it is a great idea to organize listening sessions with stakeholder groups during this transitional period. These sessions, can provide your executive with the opportunity to hear directly from employees, top shareholders, and key customers and get them out of the “headquarters bubble.” It can also demonstrate that the company is committed to listening to diverse perspectives during this time of transition.

If your company is public, it’s crucial to prep your new executive on RegFD, especially your firm’s policies regarding RegFD and the quiet period. Make certain that your executive is prepped to handle impromptu questions (in the elevator, at a conference, etc.) by returning to their key message of why he took the job and his commitment to listening to stakeholders for the first 30-60 days.

Along these lines, roleplay likely Q&A with key stakeholder groups. Remind your executive that it’s better to stick to what she knows even if it means not fully answering the question, than going off-script and saying something inaccurate.

As much as you aim to control communications, though, there will be questions, calls, emails sent to IR, CEO, CFO, CCO, anyone who can be reached. Make sure that appropriate communications roles are established and shared. Generally speaking, it is safest to have all questions routed to media relations and investor relations. From there, you can assess and engage your executive as appropriate.

4. Consider your best public introduction strategy.

Is an industry-specific trade show or other important event coming up? This might offer a good opportunity to introduce your new executive in a lower key environment and have key customer or partner intro meetings. These types of events are also good opportunities to conduct initial media interviews.

Do you need more time for your executive to get her feet on the ground? Discuss and agree on a timeframe to set market expectations. Then make sure this information is broadly communicated to key channels through press releases, 8-Ks, internal messaging, etc.

For example, you might include a sentence in an employee update that says, “Jane Doe expects to be meeting with our key customer accounts over the next 30 days and will visit our major employee population centers over the next 90 days.” When speaking to external stakeholders, set expectations with a comment such as, “John Doe will participate in XYZ conference/earnings call/investor day/etc. during the next few months.”

When it comes to ushering in a successful executive transition, there are several moving parts to keep in mind. As complicated as executive transitions can be, they are also exciting times for companies.

It definitely pays to think through your strategy and prepare your executive. Audacia Strategies can help make your executive transition as smooth as possible. We’d love to work with your team to develop the right strategy and outreach plan. Contact us to get started!

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Executive Transition - Handshake

Executive Transition Part I: Planning is Not Optional

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Stakeholders can learn a lot from watching an organization go through executive transition. Handled well, c-suite transitions impart confidence in the organization and its future direction. Handled poorly, leadership changes can alert investors to bigger issues within the organization, whether material or merely perceived.

The c-suite (i.e., CEO/CFO, for our purposes today) is the public face of an organization. According to the 2015 Edelman Trust Barometer, an annual study on global trust and credibility, 43% of people say that they trust the CEO as the spokesperson of the company.

Executives embody the credibility of the company. There is a good reason transition of these key leadership roles is watched so closely: as the c-suite goes, so goes the health of a corporation.

In Part I of this two-part series, we’ll talk about the planning and announcement of an executive transition. Stay tuned for Part II when we’ll discuss how to prep your new executive for primetime.

Executive Transition = Financial Risk

We all know there could be any number of perfectly benign reasons for an executive to choose to leave a particular company, knowing this doesn’t make an executive transition any less of a risk in the eyes of stakeholders.

While you may feel energized by the winds of change blowing through your organization, from the perspective of an investor or a customer, a change in leadership introduces an unknown variable, which is just a different way of saying financial risk.

When the current CEO is performing well, there are questions about whether her successor will be able to maintain the momentum. When the current CEO Is performing poorly, there are questions about how quickly her successor might be able to turn things around.

A leadership change can also be unsettling to employees, since the CEO is the cultural leader of an organization. So transitions also raise questions about the cost to organizations in terms of human capital.

Since all eyes are on you, c-suite transitions are really make or break. It’s so important for these types of big changes to be planned and carefully orchestrated. Okay, let’s talk strategy!

2 Types of Transitions: Planned and Unplanned

There are really just two types of c-suite transitions: planned and unplanned. You should have a plan either way! (Now is probably a good time to review my recent post on Crisis Management.)

There are unique challenges associated with each type, but with the right transition strategy in place, you will be equipped to manage unfolding events as much as possible.

1. Planned Executive Transitions.

If you have the luxury of knowing that a c-suite transition will take place, make sure you have a plan to communicate and acclimate external stakeholders (e.g., shareholders, customers), as well as employees.

While executive transition is generally viewed as a risk, there are steps you can take to minimize the risk in the eyes of investors. A well-considered transition plan indicates a healthy corporate succession plan aligned to the company’s stated strategy.

Additionally, if you have the benefit of time and a transition period of anywhere from a few weeks to a few months, it’s an opportunity to engineer a smooth hand-off between executives.

Joint meetings with current and interim leadership, as well as investors, customers, and employees are a strong signal of organizational health during transition. Consider what will infuse your audience with the most confidence.

2. Unplanned Executive Transitions

If a CEO/CFO must step down unexpectedly, be prepared. This means being ready to communicate quickly, transparently, and as completely as possible. At the very least, I recommend having the interim leader identified along with his qualifications as soon as possible and preferably simultaneous with the transition announcement.

You should also discuss the Board’s search process for a permanent leader and criteria for the next leader. Also, discuss Board strategy—particularly, if the transition is a result of the Board wishing to move in a new direction. If possible, a broad timeline for a decision will also help calm stakeholders as there will be key milestones and communications to watch.

It’s always important to communicate as much as possible, as transparently as possible. But during times of executive transition, strong communication is absolutely essential. Communications that appear to be less than forthcoming and/or light on path forward will only breed rumors and ramp up perceived risk.

Keep this quote at the forefront of your communications strategy:

“If you don’t give people information, they will make up something to fill the void.” – Carla O’Dell, Ph.D., President, American Productivity & Quality Center

There will be questions, calls, emails sent to IR, CEO, CFO, CCO, and anyone who can be reached. Make sure that appropriate communications roles are established and shared. This responsibility will generally fall to media relations and investor relations.

Don’t forget about timing

Whether your executive transition has been a long time coming or out of the blue, your communications strategy for transitions should also include strategies around timing. In corporate communications, timing really is everything.

For instance, unexpected transitions raise questions about an organization’s financial health. One way to ease this concern is to consider timing the transition announcement to coincide with a quarterly release. If such timing is impossible, reaffirm or refer to previous transition strategies with which stakeholders are familiar.

It’s also important to announce the transition to employees, simultaneous with an external release. If you announce internally and externally at different times, rumors will fly compounding concerns about who is really steering the ship.

I recommend going so far as to have a specific employee communication plan to address key cultural characteristics and how the c-suite transition will affect the organization from a big picture perspective. When your executive is up to it, set up a town hall meeting where employees can be formally introduced to the new face of the company and have their questions answered.

Next week: we dig deeper into how to prep your executive (interim or permanent) for a successful transition.

In the meantime, if your organization is gearing up for an expected or unexpected transition, Audacia Strategies is here for you. Having the right strategy in place will convert your transition into a transformation. Contact us today to set up your consultation session.

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corporate storytelling

Corporate Storytelling: The Art of Controlling the Narrative

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In the age of pervasive media and information overload, it’s more important now than perhaps ever before to have ace communicators on your side. When it comes to rising above the noise, creative communications is a distinct advantage. Given all of this, the emergence of corporate storytelling should be unsurprising.

And yet relatively few companies naturally embrace storytelling as the powerful communications tool it clearly is. There is a good reason that human beings throughout history have used stories to explain concepts, pass down information, and yes, entertain themselves.

Story is the paint that brings words (and numbers) to life.

While marketers have been employing corporate storytelling to engage with consumers and develop brand narratives for decades, it’s time to expand the discussion beyond the marketing department. All of an organization’s stakeholders: customers, employees, vendors, investors, partners, and competitors tell some part of the story.

It’s clear that your organization’s value is more than just numbers and the right narrative can convey this. But the challenge is to get all of these stakeholders on the same page and communicating the story that you want to tell.

So where should you start and what are key elements to consider as you construct the right narrative?

Start with what you like in a good story.

Think about the last great book or article you read. Or think about the last great movie or TV show you watched. It could be fiction or nonfiction. What made it so compelling? What kept you reading or binge watching? Why did you feel invested?

For me, there are three main elements to a captivating story: a compelling, yet relatable plot; intriguing characters with interesting backstories of their own; and a bit of a risk…that element of the unknown that keeps me flipping pages. Of course, the real art of storytelling is in how masterfully the writer weaves these elements together.

Obviously, there are huge differences between writing the “Great American Novel” and compiling your company’s annual report. Still, just as you are invested in reading your favorite book, you want all of your stakeholders to be invested (some literally) in the success of your company. Keep in mind that every communication with stakeholders is an opportunity to strengthen the connection.

How to apply these elements to corporate storytelling:

Compelling and relatable plot: This is the big one. Ask yourself and your team: What is the most compelling storyline for your organization? Hint: it’s more than your earnings per share, sales growth, or funds raised. It’s what makes your organization different from the one next door.

This is your “hook.” Start with your company’s vision for the future. Add in your corporate strategy. Then layer in some key metrics and milestones to help your investor follow along and you’re well on your way.

Considering that you are asking investors to trade on future value, it should feel natural to talk in these terms. But the biggest benefit to building in a compelling plot is that it forces you take a step back from the minutiae and put the data in more relatable terms.

Intriguing Characters: This is possibly the most important element of any story and your corporate story is no exception. Our cast of characters starts with our leading men and women—C-suite execs. But just as important is the supporting cast, who add depth and diverse voices to the mix.

It’s important to have your C-suite front and center, as the face of the company. They are the personification of your organization’s credibility and commitment to shareholders, customers and employees.

But consider highlighting (with appropriate training!) other key employees (e.g., CTO, Cybersecurity Team Lead, key salespeople). Whenever possible give those with the talent and interest a platform to demonstrate the depth of your “bench” using thought leadership pieces, investor days, industry events, or special webinars.

Finally, don’t forget to give your competition a role to play. But remember that they don’t have to play the villain! In fact, it’s safer not to peg them in that role. While angel investors won’t usually invest in competing companies, with public companies it’s common for shareholders to invest in several stocks in the same industry for diversification.

Risk/Element of the Unknown: This element is the trickiest one for corporate storytelling. Suffice it to say, if your company’s narrative arc resembles the plot of Get Out (no spoilers!) in any way, it’s time to revise. Save the suspense.

Still, stories can help people cope with change. If your organization happens to be in a transitional phase, a credible and accurate story can put things in perspective. Fear of the unknown can be worse than reality. So, a coherent story can infuse a level of calm into an otherwise seemingly chaotic situation.

During these periods of unknown risk and an uncertain future, it’s important to return to the fundamentals. If one of your organization’s values is protecting the environment, but when the chips are down, you are perceived as sacrificing green initiatives in favor of larger profits, that hurts your credibility.

If you hire veterans and support military families, but your CEO has proposed cuts to corporate programs that benefit these groups, investors will notice the inconsistency in your storyline. Again, everything depends on finding the right story and getting all the key stakeholders onboard.

Corporate storytelling is a powerful tool for increasing understanding, credibility and the all-important trust factor. The more intangible values that can’t be neatly plotted on a histogram or represented by a formula in a spreadsheet are part of your story.

Everyone loves a great story and your corporation has a great story to tell. Audacia Strategies would be honored to help you develop your corporate narrative. Contact us today and let’s put pen to paper.

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crisis management

5 Steps to Crisis Management and Surviving the Trump Effect

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In the weeks leading up to the US presidential election last year, there was a lot of speculation about how the stock market would react. Uncertainty does not inspire confidence among investors. That speculation sparked discussion among those of us in corporate communications and investor relations about maintaining situational awareness and crisis management.

Now here we are almost a month into the Trump presidency and there is still a great deal of uncertainty in the air. Regardless of your politics, questions remain. How will Trump’s policies influence stocks, bond markets, commodities, the flow of trade, and economies around the world? Will the intelligence community and the administration find a way to cooperate? How will all of this effect global perceptions of risk and market uncertainty?

Perhaps most important for communicators is that the President has singled out individual corporations and executives via social media and in his public statements. Consider some recent headlines:

When the President speaks—and tweets—markets listen. How can firms manage their reputation (and associated stock volatility) in an era of 3:00 a.m. Twitter-storms?

1. Have a clear story. Test your story.

First, make sure you have a clear corporate narrative already in place. Your narrative should reflect your company’s strategy and decision-making criteria. That is, your words and your actions should align and convey credibility. This is true whether communicating to Wall Street, Main Street or Capitol Hill. When a crisis strikes, credibility can be the determining factor in successfully weathering the storm.

Test your narrative via with a broad team. I recommend having at a minimum investor relations, communications, legal, government relations, operations, and sales at the table. The goal is to have as many perspectives as possible around the table to put your messaging through its paces. If your budget allows for including an unbiased third-party, that perspective can be incredibly helpful to get the group out of its conventional thinking.

During this session, poke all the holes in your message; ask all the uncomfortable questions; ask irrational questions. Nothing is out of bounds. Then, development a plan for countering each line of attack.

Develop holding statements (which deserve an entire post of their own). Consider what you will want to say to investors, the media, and your internal team. Your messages should be concise, accurate, and informative. Test your potential responses if possible.

2. Have a crisis management plan.

Make sure that you have a solid plan in place for dealing with a crisis when it happens. Have a crisis team in place and make sure its participants meet regularly. Have a system in place for notifying stakeholders.

At one time, our only option for a notification system was a “phone tree” and team of callers. Today’s technology makes triggering a crisis management plan as simple as sending a single email, text message or making a single phone call.

Here, it’s a good idea to consider using multiple communications channels and establishing preferences ahead of a crisis situation. Some constantly check email, others are more likely to receive a text message or a tweet. So ensure that information is prepared for a variety of communication channels.

Have an answer to the following questions:

  • How will you notify your team that you are in crisis mode?
  • How will you disseminate information as it becomes available?
  • Who is responsible for putting the plan in motion and seeing it through?

3. Define team member roles.

Be sure crisis management roles are well-defined and documented. Ensure that all team members understand their roles, responsibilities and interdependencies. It’s crucial for everyone to be on the same page and operating efficiently.

Do what you can to prevent untrained representatives from speaking with the media. And make sure that, like a well-tuned orchestra, your whole team understands their specific function.

4. Talk to your board of directors.

Before a crisis hits, discuss with your board of directors the crisis management plan you have put into place. Explain the details of your plan: how you arrived at the strategy, what protocols you are following, your team’s special expertise, etc.

Assure your board that you are preparing for all contingencies. Ask for their input. Often Board Members have been through challenging situations and will have good suggestions that may add perspective to your plan.

Perhaps most important, reassure your Board that all strategic moves will be made with transparency and in accordance with the processes outlined in the crisis plan.

5. Talk to your c-suite.

Engage your c-suite executives early on. Ideally, they should be visible champions of the planning process.

Make sure that your executives are strategically aligned and prepared in the face of a crisis as well. There’s little worse than watching your executive get caught off guard by a question from the media. So train your executives in crisis communications.

Even if your CEO has done an admirable job as the spokesperson for your corporation, there’s a critical difference between promoting a company in good times and preserving a company in bad times.

Dealing with a market crisis is one of the toughest scenarios that organizations face, but if you maintain a clear plan, you will be ready to face the crisis head on. Our team at Audacia Strategies has firsthand experience in crisis management and dealing with some of the most sensitive crisis areas that corporations must oversee.

Are you ready to develop your crisis communications strategy and in need of someone to help you steer through? Contact us to schedule your consultation.

 

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earnings

Surprise! Your Earnings Suck. Now What?

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Having to announce disappointing earnings to investors is a unique challenge. No one likes to be the bearer of bad news, but bad quarters happen to all companies. That said, Wall Street doesn’t like surprises (positive or negative, but especially negative).

Surprises damage corporate credibility and can have long-lasting effects beyond just a challenging quarter or two. So it’s crucial to find the right strategy for dealing with these types of surprises.

Maybe the quarterly earnings looked decent until an auditor discovered a previously overlooked error in revenue reporting. Or maybe raw materials costs suddenly spiked. Or perhaps that big anticipated contract evaporated. Whatever the reason, as you see the numbers coming in and it dawns on you that your earnings suck, you may be tempted to run and hide.

There is a better solution though. I promise!

First, don’t forget about situational awareness.

You might recall that I’m a big believer in situational awareness. No, it’s not a magic wand you can wave to turn lead into gold. Still, reporting quarterly earnings in the context of your company, your competitors, and the market is important. If nothing else, it shows analysts, traders, and investors that you have your eye on the right metrics.

Also, if a market shift due to a materials shortage, for example, affected your competitors’  earnings as much as your own earnings, that is relevant information to note during an earnings call with investors.

Your number one priority, though, should be ensuring the clarity of your message and maintaining transparency with investors. While it can be challenging (okay, downright painful) in the short-run, it will pay dividends over the long-term as it can stabilize challenges to credibility.

Let’s discuss the best strategies for revealing less than stellar earnings:  

Now that you’ve done your homework to place your earnings in context, it’s time to face the music. While you cannot soften the blow, you can take steps to maintain credibility and goodwill moving forward.

1. Don’t sugar-coat.

It does no good to play up the good news and ignore the elephant in the room, so don’t sugar-coat or whitewash unequivocally bad news. If mistakes were made, own up to them. Talk about what you plan to do to respond and recover over the course of the next quarter or longer.

Be prepared to discuss the ways in which this challenge has made you reevaluate your business strategy and/or structure. Be tangible. Be candid. And, whenever possible, be quantitative. Don’t take a blow to the chin unnecessarily, but be clear about whether the impact is indicative of an ongoing strategic or structural challenge.

In preparing for these conversations, I find it helpful to think like an analyst and ask hard questions of yourself and your team during your earnings preparation process:

  • Hold up the magnifying glass and go over every line item if necessary, until you are confident you understand what went wrong.
  • Ask the hard questions about the quality of your business forecasting process.
  • Get an understanding of the “early warning” indicators that might have helped or might help in the future.
  • Be ready to answer uncomfortable questions from emotional investors like, “How could you not have known about this sooner?” or “What else don’t you know about?” or “So, what will be the next shoe to drop?”

Now is not the time to be defensive. Now is a time to be clear, concise, and aware in your message to and interactions with your shareholders.

2. Engage the team.

You have probably already tapped into the resources of your audit team, legal team, and C-suite. But don’t forget about those running the operations and working directly with customers.

These folks working “on the ground” in your operations or interacting with customers on a daily basis may be able to shed some helpful color on the situation. Take the opportunity to sit down with those who have more direct contact with what’s driving the numbers on your spreadsheets. Consider how this color can inform your earnings release and any forward-looking discussion.

3. Consider a pre-announcement.

If you have a material miss of market expectations on your hands, you may want to consider pre-announcing prior to your full earnings release. A pre-announcement is exactly what it sounds like, an announcement of results (to the extent they are available) before the full earnings release. Generally, this release will occur 2 to 4 weeks prior to a scheduled earnings announcement.

To be clear, there is no SEC requirement to disclose. However, many on the Street believe that a company has an obligation to warn investors if it will fall materially short of expectations. This is true even if your company does not issue formal earnings guidance.

The benefit to a pre-announcement is that it sends a message to the Street that you are sharing information in a timely fashion and gives comfort that the company isn’t keeping material information from investors.

However, there are legal intricacies surrounding corporate guidance (or lack thereof) and acknowledgement of consensus numbers. Pre-announcement can be a controversial issue for many companies and should be thoughtfully considered beforehand.

Look, an earnings surprise is hard and managing the disclosure isn’t easy. Your stock price will likely take a hit and you and your management team will need to have some challenging conversations.

At the end of the day, markets trade on future value and the reality is that future value takes a hit when earnings come in at less than expected. Your goal during this process is to maintain effective dialogue with the Street to communicate your firm’s future prospects and that requires credibility, transparency, and candor. You’ve got this.

We’ve got a great team at Audacia Strategies and we’ve helped companies navigate corporate crises like this before. We can’t make bad earnings disappear, but we can come up with a strategy for maintaining credibility and moving past the temporary crisis. Contact us today to schedule a complimentary consultation.

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annual reports

Boring No More! Turn Your Annual Reports into Your Best Asset

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Annual reports are a company’s most-requested and most-read communications but they have a bad reputation for being dry and boooring. They can be full of jargon and legal speak. But while the proxy rules require all publicly traded companies file annual reports with the SEC, they do not require the information be delivered in the same sleepy fashion year after year.

I have been thinking a lot of about how to better leverage the annual report as a vehicle to share the vision, strategy and culture of a firm. Of course, I turned to corporate reporting expert, Barbara Koontz, Senior VP of Customer Experience, at Curran & Connors, who is a veritable wizard when it comes to helping companies design annual reports that stakeholders actually want to read.*

Because I have learned so much from Barbara myself, I asked her to share some of her insights with you. And she graciously agreed to answer my questions here (edited for length).

Q. Annual reports can be a strong tool to communicate past results, as well as future vision. What do you see as best practices to help the annual report tell an organization’s story?

A. There are several steps that a company can take here to convey its unique vision and values:

1. Use the CEO letter to your advantage: The opening letter to shareholders is still the most widely read section of the annual report. Companies use it to communicate vision, strategy, values, and thought leadership. The letter often focuses attention on recent initiatives that helped achieve corporate goals. Easy-to-read graphics or pull quotes ensure accomplishments stand out. The letter also is an opportunity to reinforce long-term, future goals and demonstrate industry standing.

2. Use video to convey personality: For online annual reports, the use of video is becoming more prevalent. A well-produced, short video is a great complement to the letter and conveys a CEO’s excitement and passion. To increase effectiveness and maximize return on investment, report videos are often directed to all stakeholders so they can also be used for other marketing endeavors.

3. Relate company performance to market trends: In general, it is important to balance company activities against 5 to 10 year market trends. This helps to justify investment in those key growth areas.

Q. Do you see organizations changing their approach to the annual report to express their corporate culture?

A. One of the biggest changes and most successful ways I see companies reflecting their culture is by showcasing employees. Companies incorporate stories, case studies, and photography that emphasizes the efforts of staff in helping the organization realize corporate goals.

We see video playing a key role here as well. A compelling video celebrating the passion and success of staff shows that the company values the contributions of its people, which in turn, results in employees wanting to work harder for their employer.

What may seem like a minor detail at first, the photo of the CEO, also can say a lot about the company’s culture. A suit says “traditional” “established,” and “leader,” while a shirt and slacks says “approachable,” “entrepreneurial,” and “partner.”

Q. Many different stakeholders use an organization’s annual report (investors/donors, media, regulators, customers). What advice do you give to companies to help them make their annual report accessible across multiple stakeholder sets?

A. It is important to design and develop content with all audiences in mind, as well as other communications vehicles that may be used to repurpose and more widely distribute elements from the annual report. When Curran & Connors develops a reporting solution, we consider the different ways the report or aspects of the report will be used as well as the target audiences.

Having said that, no document or reporting vehicle can be all things to all people. So, understanding your primary audience is important. Let’s say the main audience is the institutional investor. In this case, the report should be designed to ensure transparency and clearly communicate data, results, and a pathway to success.

Potential business partners, employees, and community members will also be interested in these metrics, but to effectively reach those groups the information may need to be presented differently. So, you will want to make the information more reader-friendly by applying relevant techniques such as infographics.

In addition, making the information available online is a sure way to make it more accessible to a larger audience. The content can connect to and be connected from a number of digital channels.

Q. An annual report can be a significant expense for many organizations, how do you recommend that companies increase their ROI and extend the reach of their annual reports beyond posting online and sending to shareholders/donors?

A. The two best ways to leverage the investment of your annual report are:

1. Think of the annual report as your “financial brand” for the year: Repurpose the look and feel into other communications documents such as fact sheets, the proxy, quarterly reports, the investor deck, and the IR website. This increases the value of the report and shows a professional and consistent approach to your overall communications.

2. Design the annual report to be easily segmented: Design the annual report in such a way that the segments of the book or online reporting vehicle can be shared via other marketing channels, such as social media. A unique graphic, custom photo or video, and/or case study that ideally conveys a key value driver can satisfy the never ending need for content for your social platform.

Q. As you look ahead, what are you most excited about for the future of annual reports?

A. Annual reports are one of the few documents that tell a company’s overarching story. What’s exciting is how these stories evolve to tell much more than how to reach a targeted bottom line. There is significant interest, for example, in learning about a company’s environmental, social, and governance (ESG) practices and how these impact the sustainability of the business.

Millennials are driving companies to be more involved in their communities and to report on these activities. Social media is forcing companies to be more transparent and have more conversations than monologues. Leaders of companies are taking more of an interest in the narrative too, which leads to more engagement across all platforms. As stories evolve, so do their formats.

Thanks for these words of wisdom, Barbara!

As you prepare your company’s 2017 annual report, rather than looking at it as just another federally mandated hoop to jump through, why not seize the opportunity to turn your annual report into a valuable messaging tool?

Audacia Strategies can guide you through creating a comprehensive communications strategy… including annual report messaging! Let’s talk!

*NOTE: This is not a sponsored post. I just happen to think that Barbara has great perspective on this topic!

 

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non-GAAP metrics

Credibility and Non-GAAP Metrics: Good, Bad, or Ugly?

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Investors and the Securities and Exchange Commission (SEC) have a love-hate relationship with non-GAAP (Generally Accepted Accounting Principles) metrics. On the one hand, they love information that could help them better determine where to invest capital. On the other hand, they have a hard time gauging the reliability of non-GAAP metrics.

So where does this leave those of us developing a transparent and accurate strategic message for our company? And how do non-GAAP metrics help shape credible investor, analyst, and financial media relationships?

It all comes down to the credibility factor. Non-GAAP metrics can be a critical component of your company’s strategic message, but they shouldn’t be abused. The goal should be transparency and easing investor understanding—not obfuscation.

What is a non-GAAP metric?

Before we discuss how these measurements can increase your company’s credibility and play a key role in both your investor and media strategy, let’s define a non-GAAP metric.

According to the SEC, a non-GAAP metric is “a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that:

(i) Excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or

(ii) Includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.”

Essentially, a non-GAAP financial measure is intended to depict a measure of performance or liquidity that is different from those presented in audited financial statements (e.g., sales, net income, cash flow from operations).

To make it even clearer, let’s say your company anticipates conducting a sizeable restructuring this year. If this will have a material impact on net income, you may wish to report net income with restructuring charges (GAAP) and without restructuring charges (non-GAAP). The non-GAAP measure, then, would be: GAAP net income less restructuring charges = Adjusted Net Income.

The non-GAAP challenge.

Over the years, the use of non-GAAP metrics and their prominence in financial discussions has been on the rise. In 2015, just 12% of S&P 500 companies reported only GAAP (audited) numbers in their public filings. That was down from 25% in 2006. Non-GAAP metrics have become a common way for companies to share more about how they view company operations and performance (see the example above).

To be sure, there is value in using appropriate non-GAAP metrics as a supplement to audited GAAP reporting. What we want to avoid are misleading metrics. Unfortunately, over time we have seen that some companies’ non-GAAP metrics veered away from the original intent and may have been used to paint an overly optimistic picture of business operations.

As non-GAAP metrics have increased in usage, so have concerns that such measures might not be as rigorously tested and maintained as their GAAP counterparts. As a result, the SEC updated its guidelines to clarify what might be considered misleading non-GAAP presentations and how to avoid giving non-GAAP measures greater prominence than comparable GAAP measures.

Since updating its guidance on non-GAAP metrics in May, SEC officials have sent significantly more comment letters to companies regarding non-GAAP use and they have cracked down on potentially misleading non-GAAP disclosures.

As we head into quarterly (and annual) reporting, it’s a good time to revisit your disclosure strategy and consider how to communicate your company’s strategic direction and associated metrics.

Guidelines for using non-GAAP in your investor relations strategy.

1. Give GAAP prominence. When presenting a non-GAAP measure it must be presented with the most directly comparable GAAP measure given equal or greater prominence. For example, an earnings press release should cite GAAP net income before a non-GAAP “adjusted net income”.

2. Ensure non-GAAP measures aren’t misleading. Some adjustments specifically called out by the SEC (although not explicitly prohibited) include non-GAAP metrics that

  • exclude normal, recurring, cash operating expenses necessary to operate the business;
  • are adjusted and presented inconsistently between periods;
  • accelerate revenue recognition;
  • include nonrecurring charges, but not nonrecurring gains; and
  • do not show current and deferred income tax expense commensurate with the non-GAAP measure of profitability and note the income tax effects of the adjustments as a separate item (i.e., rather than showing net income “net of tax” adjustments should show income taxes as a separate adjustment that is clearly explained).

3. Return to the fundamentals of your message. Ask: What is our corporate strategy? What goals and objectives are we (or should we) be discussing in our disclosures to demonstrate progress? What are our milestones?

4. Ensure the non-GAAP metrics you use fit with your strategic message. When considering a non-GAAP metric ask the following questions:

  • What is the intent of the metric? Does it help to paint a more complete picture of the company’s performance and/or market opportunity?
  • Is this metric meaningful? Is this a metric that your management team uses to discuss the company with employees? Are managers held accountable for this metric?
  • What are the measures used by the company to assess progress against annual/long-term strategy?
  • What are key metrics in our industry? In my peer group? Are they helpful or outdated?
  • If I was a shareholder, would this metric better help me understand my company’s performance against stated strategy and goals?

But don’t overreach. Many investors will only consider GAAP in their models so be honest with investors (and yourself!) about those GAAP numbers and be ready to discuss them. All businesses have challenges, operational quirks, and unique investment and value-creating strategies. Stick to the truth of your operations and your company’s plan to achieve strategic goals.

At Audacia Strategies, credibility is king (and our #1 value). Credibility is all in the way you present and conduct yourself. If your aim is to help your stakeholders make smart investment decisions, you can’t go wrong. Treat your investors the way you would want to be treated.

How do you think about using non-GAAP measures? Do you discuss them with media? Employees? Have you received feedback from shareholders or analysts?

Financial disclosure is a critical component of a comprehensive communications strategy. We can help tighten up your investor relations strategy and integrate your messaging across your stakeholder sets. Let’s talk!

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