Here’s a radical idea for earnings calls: Skip the scripted quarterly review and just begin with the Q&A. This will be sacrilegious to some, but not to Yahoo Finance reporter Brian Sozzi. In a recent article, he suggests it’s time for an overhaul because many in the target investor/media audience simply pay little or no attention to that portion of the call. They are just as happy to read the release and then ask questions.
Based on the number of company executives we prepare for earnings calls, we’re not jumping on this bandwagon. If well-delivered, the upfront review can be an effective communications tactic. The tone and confidence of the delivery says a lot about the company and the leaders and does influence investors and media.
However, Sozzi’s article underscores the critical importance of the Q&A. Too often preparation for the questions takes a back seat to the creation of the “perfect” script.
Q&A can allow the presenter to repeat and reinforce the company’s main messages.
Here are important reminders to win the Q&A:
- Anticipate the questions. Create a long list of potential questions. A good starting point is to list 3 questions you want, 3 questions you don’t want, and 3 very challenging questions you need to really work on.
- Q&A is a great place to repeat and reinforce the company’s main messages, i.e. “Let me answer your question… and that brings up a point we made in the opening…”
- Look for the bridge. Once you answer a question try and bring the answer back to a main message. The audience remembers a message delivered in an answer more than the same message in the script.
- Pausing is one way to avoid the traps. It’s not enough to carefully listen to the question. In the heat of the moment, it’s easy to repeat a negatively charged question, not flag a hypothetical or blurt out an answer when you don’t have all the facts in front of you. The best way to avoid a misstep is to take a short breath between the question and your answer. This short beat provides time for your brain and mouth to sync up.
- Practice practice practice. Once you create the messages and list the questions, don’t just read over the answers, — practice out loud. Try the questions in multiple ways. Anticipate the classic: I have one question and a follow-up.