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Huh?!!?!!
9Listen… I’m not looking to get anyone in trouble or make fun of anyone… but read this lead quote from a recent earnings release and tell me what it means (Note: I’ve modified it to protect the guilty):
“Fiscal 2010 has been a year of significant progress at (company), as we have been completing the development of numerous strategic initiatives that are being implemented over the coming year,” said (El Taco Grande). “These initiatives, which are designed to enhance the (customer) experience, expand (customer) protections and ensure… (they) succeed in our programs. These initiatives will present new challenges for the Company in the year ahead, but they are the right things to do for our (customers) and they will better position us to succeed as an organization over the longer term.”
Ummmmm… what?!!? I’ve read this quote - which is the second paragraph in the release - no less than eight times in a row and have no idea what it says. What progress? What strategic initiatives? What challenges? What will success look like? How long is longer term?
Maybe I’m wrong but I always thought earnings release should answer questions, not beg them. Perhaps this is the evidence we need to finally liberate IR from the finance department and return it to the communications function it was intended to be.
The Conversation
Jim Flanagan on October 18, 2010
Stefan Pettersson on October 18, 2010
This text might be particularly meaningless, but unfortunately there are plenty of other examples. Partly a symptom of weak governance in my view.
Rob Berick on October 18, 2010
Jim - I have a hard time disagreeing with your interpretation of the quote. When I worked at Hill & Knowlton, then Chairman Emeritus Dick Cheney used to refer to something like this as putting “whipped cream on a crud pie”.
Stefan - GREAT point re: governance. I couldn’t agree more and had not thought of it in those terms.
Devin Sullivan on October 18, 2010
I’m wondering if the company in question makes headache medication, because after reading that I could go out and make their next quarter based on my purchases alone. It amazes me that this got by IR, legal, and C-suite, not to mention the Board. I don’t think we need to liberate IR from finance; in fact, just the opposite. Companies have to make sure that the people responsible for communicating a specific aspect of their operations are conversant in those operations - i.e., they speak the language. This reads like someone was trying to compensate for their lack of financial knowledge.
Rob Berick on October 18, 2010
Ha! Devin… I share your pain… my head is still spinning from reading that quote. My point about liberating IR from finance was to suggest that communications like this need to come from someone who understands how to communicate… from my perspective, it read like someone who is on a first-name basis with his/her “ten-key” trying to compensate for his/her lack of ability to tell the story behind the numbers. In either case, you’re right, this should have never made it through the approval process.
Stefan Pettersson on October 18, 2010
I agree with Devin’s point. I don’t think IR needs to be liberated from finance. It needs to integrate finance with other disciplines, e.g. communication and compliance. Just commented on a must-read finance book today by the way (I hope you’ll excuse me for linking to my own post): http://stefanpettersson.posterous.com/this-book-is-required-reading-for-anyone-in-i
Stefan Pettersson on October 18, 2010
Rob - we must have hit enter at the same time… Did not see your comment before my last one…
Rob Berick on October 18, 2010
Stefan - we must have! Don’t get me wrong, I agree re: the alignment and integration. The fact that the quote was not trying to specifically explain a financial aspect to the quarter makes me believe the author’s shortcoming is communicating overarching themes rather than vice versa.
Rob Berick on October 18, 2010
Oh - and Stefan - please link to your posts as much/often as you like. It’s always an insightful read.
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About rob
Position:Senior Managing Director
Rob oversees Dix & Eaton’s investor relations practice and is a member of the firm’s Leadership Committee. Over his nearly 20-year career, he has developed and executed investor relations programs for companies in a wide range of industries and market cap sizes.
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Haven’t we all experienced this with both the ‘bosses’ and clients…they know they need to be doing something, and it has to be ‘strategic’; has to deal with the customer; means new challenges for the Company but…the real quote should be “we haven’t a clue as to what they are at this point”...