Why gamble with the company’s investor presentation?
The seven deadly sins of investor presentations.
“I always go along to an investor presentation, so that I can see the whites of their eyes,” a fund manager recently told me. “I want to see if they are up to the job.”
Indeed, institutions increasingly want face-to-face contact with management.
There is no doubt the investor presentation plays a major role in how a company is viewed by the investors. Yet we never cease to be amazed by the poor quality of many investor presentations. Here are the most common faults.
Lack of preparation
‘If you fail to prepare, you are prepared to fail.’ This old adage is as true as it has always been. So why is it so many presentations look as if they have been thrown together the night before on the executive jet? And the lack of preparation is often reflected in the share price later. Since your company has put so much work into producing results, it seems a real shame to let it all go to waste by presenting them poorly.
The untrained voice
“Um.. I’m here to ..erm talk to ..um you ..about our um…” Many people are afraid of public speaking, and this will only be compounded further by a lack of preparation. To the audience it comes across as nervousness or even an indication that the speaker has something to hide. Many senior executives now use voice coaching to develop a powerful and relaxed manner. They not only feel more at ease when presenting; they also find that audiences hear more – and believe more – of their messages. If your presentation has a lot of money hanging on it – consider getting yourself some voice coaching.
Most people use bullet points to present. They are easy to produce and change, but they are not very interesting for the audience. Dilbert sums it up well: ‘PowerPoint Poisoning’. According to psychologist Albert Mehrabian, 55 percent of information conveyed in a presentation is visual, 38% is vocal and only 7 percent is text. The power of visual images is also backed up by research from UCLA showing that after three days bullet points have only a 10 percent message retention while visuals have 50 percent. A picture really is worth a thousand words.
Spreadsheets, spreadsheets, spreadsheets
When people do use visuals, it is often spreadsheets or complex charts. But with so much information on the screen it is hard to understand the point the speaker is trying to make. The spreadsheets are probably old news from the financial release anyway. A much better idea is to concentrate on the highlights and to use visual images to support the messages.
Selling the strategy short
Perhaps the best investor presentation I have seen was by an oil company CEO. He began, ‘We are currently two years into our five-year transformation strategy and we are, more or less, on target.’
He did not deliver great financial results but still clearly showed how the company was on track with its strategy. I see many presentations in which strategy is left to the last two slides. If a company does not clearly sell the strategy to the audience in an upfront way, what chance does it have of selling it to the people who are really going to make it all happen – the employees?
Spot the difference
Many analysts play ‘spot-the-difference’ with investor presentations. They look back at their notes from last year and compare them with this year’s presentation. Make sure you make this comparison before the analysts do, and seize the opportunity to point out changes in your goals and means of meeting them.
Economical with the truth?
At one company presentation they talked of ‘quarter-on-quarter revenues up by 6 percent’ and ‘data sales up by 19 percent.’ It sounded great. The reality was the business was seasonal and year-on-year sales were down 9 percent. The stock got punished in the following day’s trading. Analysts are smart cookies and often study your results even more keenly than you do. As ever, honesty is often the best policy.
There you have it – the seven deadly sins of investor presentations. Click here for out article on Seven Deadly Sins of Presentations.