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This season’s annual reporting may be flotsam and jetsam from a shipwrecked year, but this week I enjoyed reading one chairman’s letter: that of the world’s richest man, Berkshire Hathaway’s Warren Buffet. BH may have lost $11.5 billion last year, but it remains one of only seven AAA-rated corporations in the United States. Success confers credibility but that’s not why we read Buffett’s letter. If you’re interested in business, the US economy and business communication, it’s a letter worth reading.

Writing an annual report that satisfies corporate and regulatory constraints is expected, but not easy. Writing a report that shareholders will read is less common. Writing one that’s a good read and creates good will, especially when news is B-A-D, is as rare as snakes in New Zealand. My observations about what works:

1. Explains important points in detail. Today’s typical 500 to 600 word chairman’s letter overviews are so high-level as to be almost meaningless. Buffet’s letter runs to 12,000 words (not including charts) and a quarter of BH’s hundred page annual report (or ‘recital’ as Buffet calls it). That’s 15 to 30 times longer than most blue chip chair letters. Rule makers may say that’s bad, but Buffet makes it work. At 250 to 300 words-a-minute average reading pace, it takes an hour to read, but it’s an hour of entertaining learning.

2. Less legal mumbo jumbo. In another current company report, a 1000 word chairman’s letter is footnoted with 1289 words of “Important Notes”. Without a lawyer handy, I paraphrased those Notes by paragraph, as best as I could:

  • We tried to make this report accurate (they took 68 words to say that).
  • But we can’t guarantee this, so don’t rely on it, and don’t sue us. Stuff about the big company we’re trying to take over could be wrong (134 wds).
  • Don’t take this as investment advice
  • Our past costs and revenue aren’t a basis for predicting future earnings
  • Our forecasts might be wrong (140 wds)
  • Things might change (168 wds).

Is this really necessary? Does it need to be front inside cover?

3. Feels like a letter from a person, not a committee. Corporate managements want people to like, if not agree with them, but so many don’t seem to know how to achieve that goal. Managements insist on corporate-styled rather than personal communication and reap the consequences. For fear of saying something stupid or wrong, language becomes too safe, turbid and passive (in the spirit of Reagan’s “mistakes were made.”). People don’t buy it. Buffet offers real and personal opinions.

4. Unexpected candour. Buffet is staggeringly open about his own personal mistakes: “…the company had serious problems (which I totally failed to detect when we purchased it in late 1998)” and “I made a major mistake of commission…I bought a large amount of…moreover, the terrible timing of my purchase has cost Berkshire several billion dollars.” He doesn’t try to justify himself or to blame anyone or anything, but says, “The tennis crowd would call my mistakes ‘unforced errors.’” WB’s willingness to fess up is not a sign of his unassailable stake in the company, but a sign of good character.

5. Praise for staff seems real. Rather than clichés, WB adds personal detail: “Ajit [Jain] came to Berkshire in 1986. Very quickly, I realized that we had acquired an extraordinary talent. So I did the logical thing: I wrote his parents in New Delhi and asked if they had another one like him at home. Of course, I knew the answer before writing. There isn’t anyone like Ajit.” He didn’t copy that from another company’s report.

6. Includes useful and interesting supporting information. Those who think they know, present information, sometimes lots of it. Those who really do know, say what is. Those who have wisdom show us a situation in context and leave us feeling informed and oriented. Buffet judiciously sprinkles relevant facts and business and social aphorisms throughout:

  • “during the 1900s…the the Dow Jones Industrials rose from 66 to 11,497”
  • “Derivatives are dangerous. They have dramatically increased the leverage and risks in our financial system.” His further comments on this topic offer insight into Fannie Mae, Freddie Mac and Bear Stearns and why regulators failed to prevent the implosions.
  • “Beware the investment activity that produces applause; the great moves are usually greeted by yawns.
  • “We like buying underpriced securities, but we like buying fairly-priced operating businesses even more.
  • “When investing, pessimism is your friend, euphoria the enemy.
  • “We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits.
  • “It’s often useful in testing a theory to push it to extremes.

7. Humour. Even, or possibly especially in the current environment. Reading his whole letter, you’ll certainly smirk, you’ll probably smile and you might even laugh:

  • In the second par he describes this year’s investors as “bloodied and confused, much as if they were small birds that had strayed into a badminton game.”
  • On insurer GEICO’s opportunities: “Tony [the CEO] and I feel like two hungry mosquitoes in a nudist camp. There are juicy targets everywhere.”
  • On acquiring PacifiCorp in 2006 and expanding its wind generation business, Buffett refers to finding “wind of a different sort” and to cutting PacifiCorp’s 98 committees to 28.
  • On trouble experienced by tax-exempt bond insurance companies: “The cause of their problems was captured long ago by Mae West: “I was Snow White, but I drifted.”
  • On the annual meeting: “If you decide to leave during the day’s question periods, please do so while Charlie is talking.

Okay, he’s not Jim Carrey or Ben Stiller: he’s 78 and he’s not in entertainment. Humour is risky (if it isn’t funny), but it doesn’t have to diminish a topic. Funny is therapeutic and likeable. (Argue that if you like.)

BH’s annual general meeting notes are also worthy of comment. Most companies seem to view their AGMs as necessary humiliations. Buffett calls his event “Woodstock for Capitalists” and the metaphor seems apt, given the shareholder bonding at a western cookout, main gala, shopping marathons, and side show activities including a blindfolded former U.S. chess champion to take on challengers and bridge playing experts. Isn’t Buffett fazed about grillings from Fortune, CNBC and The New York Times? He says, “We know the journalists will pick some tough ones [questions] and that’s the way we like it.”

Buffett doesn’t do pretty front cover pictures, but he ticks other annual reporting award criteria like: coherent, accessible, presented well, accurate, engaging. After reading Buffett’s letter, other chairmen look sadly like Bob Sugar giving a fake hug to Jerry Maguire’s ex-client at the end of the movie. As communicators, we ought to try and help ’em out.

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PS. I don’t agree with everything Buffett says (e.g. I reckon you can teach a new dog old tricks).

I’ve seen several cool presentations this week, but on the basis of currency, elegance and usefulness, this was the best:

[slideshare id=954205&doc=advertising-on-the-edge-1232988848070841-1]

Yes, another masterpiece from The Economist. Do those guys miss a beat?

PC World calls Facebook the Internet’s definitive social media site, attributing its triumph to ease of use in helping dredge up high school memories, make friends online, great apps and being an alternative to MySpace—even if it is “a huge time suck” (more than 50 million collective hours a day outside the US). The (UK) Daily Telegraph lists Twenty Facebook Facts including the remarkable claim (to an Australian) that Australian courts can legally summons defendants via Facebook.

Understandably, Facebook founder and owner Mark Zuckerberg rejoices that people no longer fear outing their identities, likes, dislikes and former boyfriends and girlfriends on the Internet. Zuckerberg can thank some 150 million people for making him Forbes.com’s 785th richest billionaire. He is not yet 25.

When Facebook started (as TheFaceBook), part of its appeal was exclusivity, not ubiquity: you needed a Harvard email logon to join. In 2006, Facebook opened to the public like a vacuum, sucking middle-class people everywhere into a MySpace for adults. Added functionality gave it tech-cred; added user numbers attracted big business, including Microsoft, which paid US$240m in October 2007 for a sliver of ownership. A small number of investors (not including Microsoft) put in another $500m but what will they get back? Facebook’s human data might be the golden goose, but that goose is fettered by privacy issues (‘explained’ in Facebook’s 3501-word Privacy Policy).

Making money out of social media is the same as marketing in any social environment in that it’s mercurial and has social protocols you can’t ignore or force through. You have to fit in. Think Coke and beach promotions, Ferrari and races, IBM and tennis. You don’t win friends crashing parties as a geeky out of town cousin. (Commercial plug: Aussie PR firm Red Agency can help you avoid such embarrassments.) Facebook’s ad sales were $150m in 2008. Sophisticated analytics may attract more of marketers’ money this year (downturns aside?).

Another issue for Facebook will be keeping and increasing users. Early adopters are moving away. Younger adults and teens still prefer MySpace and Bebo. Micro-blogging site Twitter is growing quickly and is less restrictive. And what if social networking fatigue sets in?

Facebook refuseniks are not new—one anti Facebook group claimed 800,000 members. (I came across the irony of an anti-Facebook Facebook page. It was in Greek or Urdu or some other script I couldn’t read.) Facebook critics attack online connectedness as poorly substituting for ‘real communication’. Then there’s Internet-led gate crashing. But the real biffs are about exclusivist technology, commercial interest, privacy breaches and content control. Facebook’s License Terms set the scene:

You hereby grant Facebook an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers), any User Content you (i) Post on or in connection with the Facebook Service or the promotion thereof subject only to your privacy settings or (ii) enable a user to Post, including by offering a Share Link on your website and (b) to use your name, likeness and image for any purpose, including commercial or advertising, each of (a) and (b) on or in connection with the Facebook Service or the promotion thereof. You represent and warrant that you have all rights and permissions to grant the foregoing licenses.

And under Termination and Changes:

We may terminate your account on the Facebook Service, delete your profile and any User Content you have Posted on or through the Facebook Service, and/or prohibit you from using or accessing the Facebook Service (or any portion thereof) for any or no reason, at any time in our sole discretion, with or without notice.

Such strictures are clearly not intended for businesses, but on reflection, they’re not that friendly to family photo collections either.

What will happen to Facebook in the next five years? Is the current model all it needs to be? Can Facebook stay as it is? If so, maybe Zuckerberg will hold his nerve and neither go public nor sell to a suitor like Microsoft.

Happy birthday Facebook.

Trainees sometimes tell me, “I’ve seen several media spokespeople use um and ah and it helps them sound natural, and less canned.”

While this may seem true to some, in public communication, expletives like: um, ah, er, well, like, sort of, kind of and you know are not worth the time it takes to say them. And like weeds, if not checked, words that add no content (or other) value tend toward infestation, as in the following Caroline Kennedy recent interview:

[youtube=http://au.youtube.com/watch?v=zAgI4AS1NVg&feature=related]

In a news grab, every syllable counts, and in presentations, weedy expletives become distracting and annoying. Say something meaningful and intelligent instead. You will still sound natural, as well as crisp and professional, when you cull expletives.

Want more info? Enquire about a Redact training program.

Off The Record: China public affairs blog

Off The Record is the useful and interesting blog of AC Capital Strategic Public Relations, a China-based consultancy founded and led by talented and experienced public affairs man, Alistair Nicholas. Alistair and his team know what’s going on in China and how to position companies there.

The recent annual “Changing Media Landscape” panel at Columbia University’s Journalism School discussed the state of new media and the direction of newspapers and magazines.

I’ve quoted and paraphrased below some of the points they made:

  1. New and traditional media are moving from a period of peaceful coexistence into a ‘conflict model’.
    Jacob Weisberg, chairman of Slate
  2. Newspapers will remain valued for their ‘elegance, portability and durability’.
    David Cohn, founder of the crowd-funding investigative platform Spot.us
    [In my view, each of the above three qualities will erode in the near future.]
  3. Journalism will survive the death of its institutions. Journalism is a process, i.e. a series of acts–not a product. A newspaper is a product.
    David Cohn
  4. Reporters at major newspapers, for e.g. the New York Times, jokingly call their paper, ‘the print version of NYT.com’.
  5. The roles at newspapers have always been diverse, but today, you have some journos writing 140 character copy or less for Twitter, and making changes to stories in minutes; while other writers are crafting 2000 word features over several weeks.
  6. Reference to a book, Here Comes Everybody on the mass amateurisation of news.
  7. The different skills going into producing new and traditional media are divergent enough to warrant entirely different job specs. Slate.com don’t hire traditional journalists for new media roles: “People who haven’t made the transition aren’t going to make it. The tone, the syntax, the way you use links and multimedia, the way you use technology…it’s too big a leap now.”
  8. Understanding new media is not age-dependent. The new media people were a smaller army, more and more we are competing with the traditional media for the same ad dollars, for the readers, and for the best journalists.
  9. Newspapers and magazines as a whole are not going away. But in the meantime lots of them are going away. The short term environment will remain tough and competitive. The transition will accelerate.
  10. Want to start and maintain online conversations? Kick out the men.
  11. Humour and brevity are foundational to web video.
    [Okay, that’s pretty obvious.]
  12. Video advertising: Fifteen seconds is okay. Thirty seconds is too long. The advertising medium is still evolving.
  13. Check out these Global Internet Usage Statistics.

An interview with Brenda Gayle

After graduating at age sixteen from the Webber-Douglas drama school in Kensington, Brenda debuted in Noel Coward’s Private Lives. In following years she performed in West End theatres including the Garrick, Adelphi and London Hippodrome. Arriving in Australia in the 1960s, Brenda continued performing live as a singer and comedienne, before adding television and radio acting and radio announcing and presenting to her repertoire.

Brenda’s radio interviews crossed the social spectrum, from politicians and writers to chefs and entertainers. Her interviewees have included writer Stephen Bogart (son of Humphrey Bogart and Lauren Bacall), and Australian cultural treasures Margaret Fulton, Barry Crocker, Wayne Goss and June Daly Watkins.

I asked Brenda, “What makes a good interviewee?”

“Personality is very important, and you can hear it in the voice. It has to have animation, some kind of spark!”

“Are you saying that voice control is important for interviewees?”

“Voice production should be important to anyone who speaks in public. Politicians should have speech training. If you don’t know how to speak properly, that is, how to put your voice over when you have to speak for an hour or so, you’ll get hoarse and get laryngitis or something.

“Deep breathing is the key. Practice breathing in slowly, holding your breath and then letting it out slowly, all the way up to twenty or thirty seconds or so for each action. Lift up your rib cage. Make sure your throat is open. Too many people swallow their own voice and lessen the sound of their words.

“Speak up so that your voice carries. In Laurence Olivier’s day they didn’t have microphones, yet you could hear him at the back of the gods! But being loud is entirely different to projecting. Loud can be raucous and very unpleasant to the ear.”

Vocal production and a sense of drama can apply in short speeches, business introduction speeches…and more, without sacrificing professionalism. In fact, making a speech interesting and engaging enhances its professionalism.

Canola crop

Canola crop

Dry creekbed

Dry creekbed

Me at Little India

Me at Little India

Lately, I’ve been traveling, not blogging.

In two months I’ve seen half of Victoria and some of Tasmania by car, flown to Perth, Adelaide and Brisbane–and revisited Singapore.

In the past year, I’ve trained several editors of major metro newspapers and magazines in presentation skills. The work is being so well received that our client (one of Australia’s largest listed media organisations) has commissioned a complete program for more editors and journalists in 2009.

My travels around Australia have involved running marketing workshops for businesses employing staff with disability. Our client is the Commonwealth government (FAHCSIA). We have nine NSW regional centres to go. I’m enjoying meeting many different people, many of them with great belief in and energy for the terrific work they’re doing.

In mid-October I returned to Singapore to work for three days with agriculture company, Monsanto. Monsanto has a lot of history, some of which draws criticism, but it does terrific work in agriculture and has an important place in the world, especially given foreseen global food shortages.

Machines to spot the spin?

A friend sent me a link to a new Internet browser add-on that claims to highlight occurrences of spin in web pages. The site owners say that spin is a threat to democracy.

I don’t doubt that lies are told in the name of public information and news on any given day, but I (perhaps naively) continue to think that the best protection for democracy is not machines telling us when something is awry, but using our brains to review, interpret and judge information.

I will continue to feel safer making up my own mind about whether something seems informed, properly sourced, balanced, logical and so on.

Speaking fluent human

One sign that standards of public communication are low is the delight we feel when a public figure says something with insight briefly and clearly. Too often, our ears glaze over under the wash of drivel and dross, our eyes fail to see the vision because the speaker hasn’t made their message clear.

Unmask. Speaking clearly is often more clever than speaking cleverly...

Unmask your message.

Unclear thinking is bad for communication. Unfortunately well-established, poor communicators legitimise bad communication. Poor communication in high places is copied by less experienced communicators who think that what they hear and see is ‘best practice.’ It usually isn’t.

It’s easy to see that the most experienced communicators are not always the best communicators. A British Labour MP recently said that his boss, Prime Minister Gordon Brown, needs to learn ‘fluent human’ if he wants to connect with voters. No doubt Brown is intelligent, experienced and politically savvy, but those things do not necessarily make for great communication. An Adelaide-based English professor writing in The Australian accused Australia’s Prime Minister Kevin Rudd of speaking bureaucratese and diplo-babble. Rudd can communicate well, but like most of us, he doesn’t always do so.

It’s easy for speakers to justify themselves with excuses: ‘This is a highly regulated/sensitive/specialised/ complex field,’ or ‘I was speaking only in the context of such and such a forum.’ In other words, ‘My content is above or beyond simplification’ or ‘In this context, it’s acceptable to speak incomprehensibly.’ Rubbish. Be as complicated as you like within very limited professional circles, but not in public (and by extension not in the media).

So what to do? Here’s a short list of ways to add zip and sparkle to your language (written and spoken):

  1. Cut out unnecessary words
  2. Use simple words
  3. Use short words
  4. Avoid or explain technical words
  5. Let verbs be verbs, don’t turn them into nouns
  6. Use fewer abstract nouns and more concrete nouns (i.e. words that create pictures)
  7. Avoid double and triple negatives (e.g. “I could not fail to disagree with you less.”)
  8. Link your thoughts so others can more easily follow
  9. Cut out the jargon
  10. Avoid ambiguity (repeat nouns rather than use too many pronouns)
  11. Use the active voice (e.g. ‘the dog sat on the mat’ rather than ‘the mat was sat on by the dog’)
  12. Emphasise the positive aspects and people will want to keep reading. Negative phrasing can seem bossy and hostile. Negative words may give you an unintended headline if you’re speaking to the media.
  13. Cut unnecessary preambles
  14. Kill or define initialisms (not to mention calling initialisms acronyms)

Hiding behind a lack of (presenting or other) education is not good enough. If you’re an adult and have access to the Internet, you can access and learn from the best resources in the world.

Do you use too many buzzwords? Britain’s Campaign for Plain English offers a simple remedy: Write down the top ten buzzwords or phrases you use and come up with a plain English alternative list.

In private and informal conversations, speaking conversationally includes hesitant starts, unplanned repetition, half thoughts, trailing off, expletives, not quite saying what you mean, and so on. That’s all fine in private, but disastrous in the media and in public.

The start to speaking powerfully is to speak clearly. Politicians who focus as much on speaking plainly as much as they do on speaking politically, will win more votes. Businesses that shorten and tighten up their written communication will increase efficiencies and sell more products. Lawyers who write in plain English help people engage more effectively in legal action and processes.

Poor communication certainly costs. It adds to cynicism and lack of trust. Is there hard evidence that clear communication can make a positive difference? Back to the Campaign for Plain English, for a single example. The campaign helped British Aerospace redraft and cut a 150-page international leasing agreement down to 50 pages. The result: shortened timeframe to close a ₤120 million deal by several months.