S3E9: David Calusdian from Sharon Merrill on Effective Communication for IROs and Executives

[MUSIC] This is Winning IR, a podcast exploring the diverse insights within the IR community. Join me, Mark Faskin, as I sit down with IROs and other IR stakeholders to discuss the winning strategies, tactics, and shifts in thinking that are redefining their profession. [MUSIC] When it comes to gaining the attention of investors and ensuring that your story is received by the investment community, your delivery matters just as much as your content. Today's guest is David Colestian, president at Sharon Merrill, a preeminent strategic investor relations advisory firm. These three decades of IR, communications, and coaching experience has made him a top voice in the space. Speaking at high profile industry events hosted by Nuri, Nasdaq, the New York Stock Exchange, and the Public Relations Society of America. He has also lectured at leading academic institutions such as Harvard University, Georgetown University, Boston University, and Emerson College. David is an expert in persuasive speaking, and the firm recently launched an executive president's speaker training, which delivers rapid and significant impact on executives' effectiveness with the critical investment community audience. I'm really excited to share David's advice on today's episode. But David, I wanted to kick off this episode talking about some of the most important factors to think about when trying to verbally communicate an effective and compelling message. The reason I feel that's important is that throughout the course of this podcast, IR has been compared to sales and marketing and communication many times. And there's been a lot of discussion around how do you create a compelling message? How do you create an effective message as an organization? And that is obviously very important. But what we want to talk about today is, well, if you have that great message, how do you actually, as an individual, communicate that message in an effective way? And you're an expert in this and communication in public speaking. And so I'll go back to my question, what are the most important factors that people should be thinking about when trying to verbally communicate an effective and compelling message? Yeah, thanks, Bar. Thanks for having me on today. I've been enjoying listening to your podcast, so I'm looking forward to be on today. I think there are two factors. And you mentioned having an effective message, first of all, and it's important that that message be very structured. So one is having a very structured message and make sure you have one. Make sure you have a point in any communications. Go back and think, what am I trying to communicate to this particular audience? So first and foremost, make sure you have a point. And then you mentioned the delivery. The delivery is the second thing. Make sure that you have great body language. And I'm sure we'll go into that in a little bit more detail in a bit and effective voice. So if you have effective messaging structure together that resonates with your particular audience and that dynamic delivery, you've got it all. Awesome. Let's help one and you're right. We will get into a bit more detail on this. And I think the first piece that we're going to touch on, you just talked about is the structure. In articles, you've published, you've spoken to a model, you called it to communications pyramid. Can you explain how an IRO can use this structure to ensure that their messaging is clear and well structured? Sure. I use my own take on what's called McKinsey's Pyramid Principle. And the communications pyramid is simple, but it's really brilliantly effective. And it works for the delivery of any message. And in this case with IRO messaging, we're talking about persuasive speech. And in the end, we're trying to convince investors or analysts that we have a great investment story. Putting our best foot forward yet, obviously, disgusting all the risks. So in this three-tier pyramid at the very top of the pyramid is the theme. Again, what's the point? For example, if you're speaking to a slide in a presentation on product development and your messages, product innovation is enabling our company to capitalize on strong growth trends, that's the point. And the highest level of this three-tier pyramid is that coin. Now, the second level of the pyramid are the key messages that support that coin. And those are the messages you want the audience to remember as they leave the room. Now, the third and lowest level of the pyramid, that's the data, the fact that figures the stats. It back up each individual, each individual message. So if you use that organization, and then we go back to the cliche of tell them what you're going to tell them what you've told them. If you start off by mentioning the point, the message you're trying to convey. And then you have those supporting points, you mention each one. And then for each one, you bring in the data, the backup material. And then again, at the end, bring up that point, you've now really hammered home that message three times with very structured, organized data to support everything. And that's how you get a really persuasive argument. And it works for Q&A too. This time with the pyramid, the top of them pyramid becomes thought answer. And then the middle of the pyramid are those supporting points that support the answer. And this time, I don't recommend bringing in the bottom of the pyramid, those facts, the figures, because that's when people start to make me and draw all over the place. And they they mentioned a key message of that fact. And then they go up to a different key message. And another fact, it gets a little weedy. And that's where I find most people fall down on Q&A. Is they just go on way too long? And so is there a part of this sort of pyramid that you see like people do not deliver on most often or maybe ask another way? Do there a mistake that you see as being very common? You just mentioned sort of going on and on other other things? Yeah, I think not having that structure and not really thinking through what is the main message I'm trying to convey? And then not having those specific supporting points to support that message. So most people go into a situation and just say, well, I'm talking about this, act wise, without really thinking through what is my persuasive argument? And how am I supporting that? So there's no structure to it. It's just a meandering conversation without a real point, without the supporting points. So for example, with if you're communicating through an IR deck and you don't have an investment thesis and you're not communicating that investment thesis throughout that deck in a very prescriptive, a very structured way, then the whole point may get lost. I imagine that this is perhaps a bit easier to do for say an earnings call where you have time to prep and you're sort of speaking, right? You've got the stage for a period of time. I would think that where some Iros run into issues on this sort of just talking out loud here is, well, they invest your meetings, right? You go into investor meeting, you really know what's going to come up. And so you kind of went back to your point and it's important that these Iros that Iros have those clearly thought through messages so that when a question gets asked and I'm expecting they've already got an anthropormulated, they've got those data points. They're not just on the spot like, oh man, how do I answer this and flabberg on a nose? Right. Right. There are two things there. One is about the preparation. That's the most important thing. It is thinking ahead what are the major questions that I could get? What are the Godchants? What are the questions like don't want to answer? What are the tough ones? And you don't need to come up with a hundred different questions. I often see companies with Q&A documents that are a couple hundred questions a lot. And that's kind of self-defeating. You can't memorize a hundred answers, but you can memorize key talking points to major topic areas that you may have trouble with. So if you do that, anytime you have a question that relates to that specific topic area, you can go back to those three key messages that you will have rehearsed a lot in advance. And then you can be very dynamic and be very effective and answer. And the other thing is once you practice that so much, you get into that mindset of being very crisp with three key messages for every question. And then you keep in very concise. Let's talk about body language, which seems like a weird topic on a audio recorded podcast. But we can see each other right now. Maybe people don't know that who are listening. But you talk a lot about the importance of body language, obviously when you're in a meeting or presenting in front of folks that's on video or in person. So what are some of the serious to focus on as it relates to body language? And why is that so important? Why is it an area that you focus? Without effective delivery, your messaging as well thought out as it can be can get lost. If a speaker is mumbling, if they're going on too long, if they don't sound excited about their topic, they're speaking about it can get lost. So it's a marriage. You need good body language and delivery along with the great messaging. So on in body language, I look at three key areas. One is posture because that brings confidence into the conversation. Throw your shoulders back, stand up straight. It's not rocket science. It's something we've all been taught since we were little kids but it's so important. Talk and walk like you own the room and you're the expert of whatever you're talking about. And then the second thing that I look at and I comment a lot when I'm working with speakers is your hands, your hand gestures. And that's an area I get a lot of question because no one knows what to do with them. I get that question all the time. I recommend to just keep it natural. Use your hands as you would in normal conversation. A lot of people think they use the hand too much but I'll tell you I can count on one hand. How many times have had to say okay you're going a little crazy with the hands? And in that case I say here's a strike zone from your chest out of your belt where you should be keeping your hands. But otherwise just have them natural. Have them flow like you would in a regular conversation with a friend and go on a little tangent here but good presentation is really a conversation when you enter a speaking engagement whether it's an investor meeting or a major speech. It shouldn't be a conversation. People want you to talk with them not at them. So if you're just talking like you are with your hands in normal everyday conversation then you'll be okay. So the hands the posture eye contact is another one that's that's probably an obvious but some people may just scan the room when they're delivering a presentation or or look at a single point at the back of the room and that's really not effective. I always suggest to people that if you're speaking with a hundred people and click it's not one conversation with a hundred people but it's not hundred conversations with a hundred people try to make eye contact with each and every every person as best you can so that you have that engagement and it also helps to prevent them from looking down to the right phones carcelates your here engaged with them in that way too. Absolutely you told a really great example when we were when we were sort of prepping for this conversation you mentioned I don't know that it's a true story story sort of an example that you gave us of an effective team who is in mean with an investor and sort of talking through and feeling very confident that their strategy and one question came up and they were sort of forward and engaged in one question. So I think you know they didn't like and they immediately sort of sit back and cross the arms and and go sort of into a dejected mode and you made a really good point of those are things that investors can attention to an in certain instances are trained to pay attention to and so it's something that we as as the IR team really need to pay attention to as well. Absolutely absolutely we know the investors analyst are sometimes trained by body language experts and we need to be cognizant of the things that we do as represented as our companies so that investors don't read into something that just might like not be there for example the example that you just gave the I taught for earlier. I was in a room with a CEO and a bunch of investors and this was a multi industry company and the CEO is going through each one of the six businesses and he was sitting forward at the conference table very engaged using hand gestures and he went to that six business which I knew wasn't doing that well. But when he was asked about that last business he sat back folded his arms his his language was still consistent but anyone trained in body language could notice that very distinct change in his body language he close himself off by crossing his arms. Most people know that crossing your arms for your car king is is a negative and it's because you self-consciously you're protecting yourself your your folding your arms protecting your vulnerable parts of your body the opposite as when you're petting your dog they roll in your belly they let you pet their belly they're being very open there they're. They don't feel the fence and the same way with when you're speaking across your arms over your gesture being very defensive so that's the CEO was very distinct in the change in his body language sometimes crossing your arms across your chest is just comfortable or cold but it's that very distinct change in body language that people can read into something and we just need to be cognizant of some of those things that create that perception of doubt on our speaking. Other examples are I mentioned hand gestures having your hands hidden having them behind your back in your pockets some speakers like to have their hands in their pockets because it's something to do with them but hiding your hands is like you're you're creating something from the audience so it's all self conscious stuff and as you watch a speaker that's also self conscious how you read into their body language so having that open your mouth. So having that open posture with the hands and motion is definitely the best thing to do so you're not looking like you're like you're hiding something. I just have to wonder how many people listen to this episode right now are like sitting up straight and like to put a hand in their pockets right like that's that's what I'm doing and like oh man I'm going to sit up straight and. What do I do with my hand other great points and and so for my next question and we're sort of getting to like executives right I mean there I've heard questions before about you I rose obviously there's everybody has opportunities to be a better speaker and communicator so these are certainly tips and ideas that I should be listening to and reflecting on for themselves to think about like am I am I doing any of these things that could be misconstrued or or seen as negatives but there's also a lot of discussion about the executive team right like how do you prep an executive to what if you have an executive who is not a great communicator like how do you approach that so one of the first questions I wanted to ask along that vein is what are some of the questions that you get most commonly from executives during some of these training sessions what are some of the areas where they want to improve or maybe are not feeling as calls it it definitely that mentioned the hand gestures what do I do with my hands is definitely what I get a lot another one is what do I do with the podium what do I do when I'm standing behind the podium do I grab the podium can I look down on my notes what do I do I look at podiums as as evil I don't like podiums put in create a barrier between you and your audience when you're behind a podium you do tend to grab it you look down at your notes which which breaks the eye contact with the audience so I recommend when I'm asked about if you don't have to stand behind it walk in front of it walk next to it and be from the hearts be from from memory you should not in an investor deck situation not really have to look down at your notes a lot you can last to the slides after you left or right a little bit but step away from the podium be more engaged with the audience so that's one question I get and then I do get a lot of questions around body language tells what what are the things I might be doing with my body that might indicate are uncomfortable with what I'm saying and I mentioned a few of them with your hand another one with the hands is covering your mouth when you're speaking and that's a signal that says that you're uncomfortable with what you're speaking you're trying to keep the why inside when you're a little said when you're at a car to party when you're speaking with somebody and they have their hands over their mouth and you're speaking that's an indication that they desperately want to talk and then maybe you should stop talking let them say something watch how you're where your feet are pointed if you're watching a speaker and their feet are pointed away from the audience it's an indication they wouldn't be anywhere than where they are right now so if you're speaking what I want somebody that that's an indication that's another body language tell so as a few things I'm asked a lot about those are great and as the IR team I mean you know the arrows do a lot of prep work right whether it's writing this class or doing the practice runs the spending a lot of time both practicing themselves and working with the executive team to prepare them for for these events you can mention a couple of great things are there any other things that I or should be looking for or feedback that they should be providing to the executive team when preparing them for what is a presentation of board meeting or an earnings call some of the things we've talked about but hey looking for the message how we talked about this at the start of our conversation what is the message what's the point of the conversation and if it's an investor presentation does the deck hit the investment thesis or even if it's a conference conference grab to whatever it is is it hitting that investment thesis you need to get across to your audience is it strong is a compelling and do you have a number of key takeaways they are emphasizing over and over again throughout the deck implicitly or explicitly because there there should be and then another thing they work on a lot with executives is again bringing out the energy and the excitement in the delivery so as you look at your management team and they're pretty good. presenting or practicing the deck and they're practicing the conference call script and there's just no edging the delivery and it doesn't A lot of executives they aren't necessarily monotone. They just say things the same way through all the deck So there's no Indication what's important and what isn't important if you say the word Excited and you say the same way you say every other word It doesn't resonate so I recommend that as you're watching your your CEO your CFO speak If there's a key point They should be emphasizing more think about how they're using their vocal variety I recommend for every slide in the deck for example Or again through a conference call script but there's a major point But it's use some vocal variety to make it stand out talk faster so you can show that excitement talk softer So it can sound more dramatic Or louder so just the way you vary it up It can be very Effective and bringing out those key points So those are some things I that that can help an executive go from zero to 60 Very quickly so that's a few ways that I always can look at their management team and say hey I've got to see things that you can work on and improve very quickly and So I agree we've touched on this but everything on it. Everybody is a great public speaker There are some executives and Iros and just people in general who understand their businesses and very deep amounts of detail and our experts But maybe can communicate those messages so well and so any recommendations for an IRO On how they can approach a member of the management or executive team who may not be a great presenter Sure, that's that's a great question another one that I get call the time and there are a lot of variables to consider there Yeah, it's the management team aware of their need for help What's the relationship between you the IRO and the managed and the member of managed red? Is the management team member the type of person who seeks out opportunities for self-improvement or can they be very Devices it do they want to improve so they ask for those questions make a big difference in how you approach them but and First of all most personalities and relationships make a huge difference I'll be even though I'd suggest that the IRO approach the team the management team and not just the individual It's say it would be a great exercise for everyone to Up their game to go through training and because even the best speakers go through speaker training and The best speakers are the best speakers because they've done that So if it's a team that really wants to improve Going to everyone versus saying you you need help if you go to the team and say this is something we all should do and I'm brought in in a lot of situations where there may be one or two members of Management that really need to help but everybody goes through it so no one's No one's pointed out Yeah, that's a great idea. I guess it's probably easier to have that third party you can come in identify some of the issues Give that to the IR team or the team in general say for this individual or these individuals These are things to watch out for and you can provide that feedback as you go through prep so it's probably extremely helpful Yeah, or they could but if there are some things that aren't as personal It might be easier for an IRO to say to their CEO Let's look at how we're structuring the messaging versus you're just mumbling all the time That's when it's right better to bring in and somebody from the outside that That's no that it won't be career limiting on the spirit of good communication and having a well-structured message Life final question sort of summarizes a lot of what we talked about today Which is why should IRO's in management care about their communication style? Not necessarily about style, but they should care about effectiveness. They should care that the right met that they have the right message And it's a compelling message that helps them to achieve their higher goals It is specific to their audience and to make sure it's actually getting through to investors because if you don't have the right message for the right audience You don't have the right structure that we talked about that helps it be more compelling and to resonate and Then very importantly as we've been talking about a few don't have the ability to marry that Good structured compelling message with an effective delivery that can help it get across to investors Then it's all for nothing so it's it again. It's really a marriage of Delivery and message and then you you can be very effective in how you are you communicate? Well, David this has been super helpful. I know that I've learned a lot. I'm slightly confused about what to do with my hands now And so I maybe I'll be talking to you about that after I am sitting up straighter and so I think those are all good things I really appreciate your time and your expertise and thank you for coming on the podcast. Oh, thanks for having me. Enjoy it I hope you enjoyed today's episode of winning IR for more winning ideas Make sure to subscribe to this podcast. This podcast is brought to you by Irwin a better way to manage investor relations for more information Visit www.geturwin.com