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To say there are a lot of deals stuck in the IPO queue might already qualify as one of the great understatements of 2012, right up there with "Republicans seem to disagree on who should be the GOP nominee" and "The European financial market seems a bit strained of late."
To say I have a recommendation for either the GOP or Europe might qualify as one of the great overstatements of all time, I do have a strong recommendation for those companies currently waiting to go public: use this time wisely!
Time after time I have seen management teams view "going public" as the completion of a process rather than the beginning of one (¿Cómo se dice "rude awakening"?). Believe me... companies that begin preparing for this new reality long before the S-1 is being drafted have a much easier time transitioning and performing after the deal has gone effective.
To that end, here are seven simple strategies for future public companies to consider in advance of the offering. For those of you who have already walked this (green) mile or are walking it right now, what would you add to the list?
Memo to: Those who prepare managements for earnings conference calls
From: Me
Re: Avoiding the most common (and biggest) earnings conference call mistake
All - effective immediately, earnings conference calls will require a strong closing statement to be used by your CEO following the conclusion of the "Questions and Answers" segment. Allowing this discussion to abruptly end with the senior leader of your organization muttering, "Ummm... okay... thanks for dialing in this morning. We'll talk to you in three months when we next announce earnings" is no longer acceptable for the following reasons:
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After roughly an hour on the phone - and too many questions on topics off in the weeds - management teams need to bring the conversation back to those essential takeaways from the quarterly performance (e.g., pleased with our ability to drive higher operating margins despite flat sales; encouraged by the progress we're making in integrating our latest acquisition; focused on more fully leveraging our market position as economy rebounds... you feeling me on this?). Letting the call end with a brief discussion on expected tax rates is not only a major faux pax but a wasted opportunity to reassert your value proposition for investors.
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It's also a lie... at least I hope it's a lie... please tell me you are talking to your investors in between earnings calls.
Please let me know if you'd like me to convene the group to discuss further - perhaps over a working lunch. In the meantime, I thank you for your prompt attention to this surprisingly wide-spread problem.
