My two decades long career helping executives design and delivery winning presentations, has focused disproportionately on financial presentations for VCs, Private Equity firms, hedge funds, public and private companies, etc. who are raising money or and. delivering investor and board presentations. In most cases, the biggest problems are:
- Deciding what information can be dropped for the face-to-face presentation, since much many details clutter the communication and distract the audience from the key information (hence our â€œWINningâ€ expression: Whatâ€™s Important Now), and
- Deciding how to present what is critical in a way that is easy to understand so it can make the powerful impact thatâ€™s the presenterâ€™s goal. (Just because youâ€™re a banker with Powerpoint doesnâ€™t qualify you to design powerful presentations, as clients who come to me with their 30th presentation conclude!)
I also see the second problem as one new accounting students (some of whom attend my classes on strategy management) need to consider. Their tables have all the numbers, but they get lost understanding what the ultimate decision make needs to know to make a key decision. Thatâ€™s why I found Baruch Lev and Feng Guâ€™s book â€“ The End of Accounting interesting. One point they make is that the accounting industry has added lots of requirements for companiesâ€™ annual reports â€“ but they may not be helping investor decisions. â€œThe 1902 US Steel report is a slim 40 page document whereas its 2012 counterpart is, in the best of accounting tradition of mounting complexity and obfuscation, a hefty 174-page tome.â€ The authors note that the extras offer nothing of substance that helps explain how US steel went from one of the dominant companies of the 20th Century to a shell of its former self. Similarly, they noteÂ that in the2013 General Electric 2013 report are footnotes on â€œSales of Goods and Servicesâ€ which include gthe , that the recurrent use ofÂ the word â€œestimateâ€Â without explaining the extent to which the revenue numbers (such as $146 B) are based on actual facts vs estimates. Clearly, a difference of just a few Billion could change earnings expectations!
In the spirit of rethinking how presentations can be more â€œAudience-Drivenâ€ (the AD in our key formula ADAP, they actually offer a new reporting system â€“ The Strategic Resources and Consequences report. The focus would be on strategic resources that give the company a competitive advantage, and an assessment of the threats to those resources.
They list five sections that would make up the report. Included would be:
- List of strategic resources, including patents and other IP, and its value
- Specification of investments needed to develop these assets
- Identify largest risks to company
- Describe strategy to be used to make the most money for the company
- Quantify the results in creating value.
While an assessment of their proposal from an accounting standards perspective is beyond my skill set, I welcome insights from experts. Also, for the rest of us, share with me your thoughts about the implications for financial presentations!