Clarity
Have you ever sat in a meeting listening to somebody very senior and thought; “I have no idea what you are talking about”? Do you enjoy watching corporate warriors use powerpoint slides to explain strategic imperatives? Or do they leave you worrying that you are plain thick?
You are not alone
Laura Rittenhouse started her career working for Lehman Brothers. Her job was to help investors decide where they should place their money. This means that she has ploughed through more than her fair share of corporate reports and public relations articles.
She came to the conclusion that many corporate communications are unintelligible.
Rittenhouse analysed these texts with the linguistic tools that the Securities and Exchange Commission use to see if people are telling the truth.
She developed an algorithm to highlight FOG — Fact-deficient, Obfuscating Generalities. Ultimately this led to the creation of a “candor score” for every document. Corporate communications that were clear, concise and honest got a high score. Documents that contained lots of clichés, euphemisms, jargon and platitudes got a low one.
Words count
The “candor score” predicted financial performance remarkably well. Companies that scored in the top quartile of her survey routinely outperform the S&P 500 average.
Arrogance
As well as looking for obfuscation, Laure Rittenhouse also counts how many times the C.E.O. uses the word I in his letter to share holders. Apparently “Arrogant, self-serving, out-of-touch CEOs present a serious financial risk.”
Honesty matters
Next time you are sitting in a presentation and you start to think you are being a bit thick, you are not.
Anybody who claims to be building a “World class execution engine that is driving incomparable stakeholder value” really means that things aren’t going well and they need help.
Being honest that you have a problem and clear what you are going to do about it creates action and inspires trust. Both of which are more likely to get you a result than “evolving the strategy into the corporate DNA”.
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Image by Gavin Llewellyn
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