Once every quarter, CEOs and CFOs of public companies feel their pulses quicken and their temples throb as they stare at the boardroom’s speakerphone. In moments, they’ll be connected to dozens of analysts and investors, many who are eager to question their competence. Even the savviest, most confident C-level leaders dread those calls. So much rides on what they say and how they respond to the questions they’ll receive. Depending on the call’s outcome, their company’s valuation could soar — or plummet — in the next 24 hours, and their job security could be reinforced or simply evaporate.
I’ve participated in those calls as a member of a company’s executive team, and know just how stressful they can be. But given the importance of these quarterly presentations, it amazes me how few companies approach them with intention. Far too few take the time to think about what they want to say and practice saying it. Not enough brainstorm potential audience questions or come up with sound answers. Why? Because they’re convinced that they’re smarter than the people at the other end of the call, or that they can satisfy a probing analyst with an off-the-cuff answer.
The simple fact is that people are perceptive enough to see right through posturing and weasel-wording. You can’t afford to go off on distracting tangents, or to ad lib answers to critical inquiries. You can’t hesitate when asked about something important, or try to kill time while you conjure up some kind of plausible response. If there’s an incongruity between what you’re saying and how you’re saying it, people will hear it in your voice.
Some time back, a director of a public company told his C-level team they needed to work with us. Their last investor relations call had been a disaster, contributing to a 50 percent drop in the stock’s price. Several major initiatives were underway, including a divestiture and an acquisition, and the company couldn’t afford another misstep.
We gathered the executive team and asked them to put everything on the table — all the messages they wanted to convey, strategies they hoped to share, and concerns they had. After three hours of questioning and discussion, we had a lengthy list and all sorts of conflicts. So the next step was to move them into extreme simplification mode. We asked the group to identify the single thing that every participant must take away from the call. After they reached an agreement, we asked what a secondary take-away would be if the opportunity arose to discuss it. It took them another hour to make that choice.
Then we explained that it was critical that they come across as confident and competent. What exactly would that sound like? What should the participants hear and experience, because they can’t see them? How could they clear all the extraneous information out of their heads and focus entirely on the most important strategies? How would they overcome the anxiety and project unwavering confidence? We created internal messages to guide each of them, and encouraged them to repeat those messages again and again, which would focus their thoughts. If something prompted anxiety — such as discovering that a particular analyst had signed up for the call — they were to use our specific techniques to bring them back to what was important and to mitigate anxiety.
After many hours of rehearsal, they were ready for the actual call. It took just nine minutes. The audience didn’t hear confusion, conflict, disarray, or minutiae. They heard a cohesive executive team presenting its strategies with complete confidence. When questions arose, the team was ready with solid answers. There was no stumbling or stammering as they sought the best response — just a series of well-thought-out and well-rehearsed replies. We’ve handled every call since then the same way.
That’s the secret to a successful investor relations call. It’s a matter of planning, identifying the right messages, finding the best words, and rehearsing again and again, like an athlete using deliberate practice, until those words and the technique become second nature. It takes time, and it takes work, but it’s far more effective than arrogantly assuming that you know your company so well that you’ll be able to answer any question with conviction — because that’s nothing but a recipe for disaster.