We are in the thick of shareholder meetings, and that means we are seeing many annual reports. I know how confusing the language of these publications can be. As a public service to shareholders and employees, here are translations of a few key phrases many companies use.
- We performed well in a difficult economy.
Translation: As usual, we didn’t make our numbers, but at least this year we have an excuse.
- We were able to deliver shareholder value by managing our costs.
Translation: We laid off employees to make sure that our investors received their dividends.
- We have focused our business.
Translation: We sold off the dogs that were losing money because we didn’t know how to manage them.
By the way, when our current lines start to lose money, we will sell those, too.
- The pain was shared across the company.
Translation: While we in executive management still received our bonuses, it was difficult to watch from our office windows as employees left the company for the last time.
- We have a healthy backlog.
Translation: Our manufacturing is so lousy that we can’t get product out the door, so the orders just keep piling up.
- We have grown through acquisition throughout our long and proud history.
Translation: We don’t know how to innovate, and we put no money into research and development. We know only how to buy other businesses.
Yes, my tongue is firmly in my cheek, but there is some truth in these statements. Many organizations go beyond the artfully crafted phrase and become somewhat deceptive. This often diminishes the trust from many major stakeholders, e.g., employees, investors and home communities. When you violate trust, you can destroy your credibility, and from there, you lose support. One company announced no pay raises that year in their facilities around the world because of the financial health of the company. However, the company also filed a government-required report, which revealed that the president and chief financial officer each received $1.5 million bonuses. As you can guess, there was widespread resentment, and productivity crashed.
On the other hand, I worked for a world-class power generation business that told employees, the community and vendors that the business was in trouble, at risk of being sold or closing altogether. When the head of the company chose to be frank about the situation, all these parties rallied behind his plan. The business recovered to regain its global leadership.
When I teach seminars on communicating through change, I emphasize one point above others: Your stakeholders will follow you when they believe you are being straight with them. But deceive them through equivocal language, and you will lose them.