Sunday, February 15, 2015

Presentations: When to Lead with the Financials

A few years back when working with a publicly traded company, I learned something about presentations which had everything to do with the order of things.  Or more to the point, when to present financial information.

Conventional thinking in corporate communications is almost always to put financial information at the end. When we submit PR proposals, the budget page is at the back. When we conduct sales presentations, the numbers come at the end.  And when companies tell their story to analysts and investors, the financials are often at the end of the investor relations presentation.

The notion that financials should always come at the end changed for me when I was involved in a series of analyst meetings that featured a CEO and CFO.  We started to notice that when the CFO got up to speak and gave a brief overview of the financial performance and data, we detected a noticeable shift in the mood in the room.  Analysts leaned forward, and sometimes literally, sat on the edge of their seats.  Their mobile devices, computers and note pads were less of a distraction.  Questions from them were more focused and purposeful.

This had as much to do with how good those numbers were as anything, but it also told me as a corporate communicator that the corporate communications tradition of closing with financial information may not always be the most effective way to do it.

The company had a sophisticated technological story to tell, and its customers were deep in the infrastructure of a highly technical industry.   So, it made sense that the CEO would speak first, draw the audience in, educate it on the company’s technology and industry, and then set up the CFO who would go through the financials.

The CEO was a very talented speaker who could convey highly complex information in a way that was relatable and interesting.  The CFO was not known for his speaking talents, but that should take nothing away from his role in these sorts of investor relations presentations.  He was very good at plainly, directly and candidly delivering very detailed information on the financial condition and performance of the company.

Still, it was when the CFO spoke that we noticed that shift.  After noticing a pattern in the audiences, we decided to try leading with the financials.  This helped all the way around.  Not only were we satisfying the analysts’ natural curiosity in financial information, but we were setting up the CEO to tell the company’s story in ways the investor audience could relate.  We were providing better context.

The change in our presentation format meant starting with an attention-grabbing “what,” and then following with details that addressed the “why, how, when,” and “where.”

The reaction from the next few analyst audiences confirmed our instincts.  More routinely, analysts had a much quicker better and better grasp of the company’s technology, markets and prospects.  Our conclusion was that by giving them the financials first – subject matter with which the analysts were already comfortable – they were much better prepared to connect the dots and absorb the new information about the company.

This, of course, is not a cookie-cutter or one-size-fits-all approach to financial presentations.  There are many times it is wise to save the financials for the end.  So at best the decision on where to insert the financials into the company presentation is best handled case by case.  But the lesson here is not to automatically assume the financials belong at the end because that is what is always done.

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