As a corporate communicator, odds are you face questions about your company's financial performance on a daily basis - or at least whenever the media comes to call.
Coordinating messages across departments - and especially with the financial department - is gaining increasing recognition as a key to maintaining your organization's credibility
with investors, partners, employees and other stakeholders.
That means knowing the numbers and, more importantly, being able to explain them. For the many PR practitioners who have spent their careers focused on branding, media
relations and other creative, right-brained tasks, "knowing the numbers" boils down to one word: math.
We can't take the math out of the equation, but we did find a variety of resources for the financially-challenged, not to mention a diverse group of PR professionals who have
found that understanding the earnings statement is opening new opportunities for their careers and for the application of tried-and-true corporate communications skills.
Get in Touch with IR
The first step to understanding IR is to speak with investor relations professionals. Al Bellenchia, chairman of the national financial communications practice at Fleishman-
Hillard says the best way to get access to the IR department is to present your case: When the IR pros share knowledge with the PR department, it helps the whole company.
Gail Laguna, VP of corporate communications for Web-based dating service MatchNet, is responsible for all internal and external communications for her organization. For her,
communicating around the company's finances has been "a matter of working hand-in-hand [with her investor relations counterpart] to make sure we're all on the same page with our
messaging, and with what is being highlighted as the strength of the company." Laguna, based out of Beverly Hills, faces an added challenge since the company is headquartered in
Germany, and the financial folks are located there. She has the advantage, however, of having worked for a mutual funds company in the past and having learned a little about IR
from previous agency experience. "But I got my real practical knowledge in-house."
Tom Joyce, partner with Carmichael Lynch Spong and a former VP of public affairs for American Express, agrees that you should start close to home. "Have friends in the CFO's
office. I always had somebody in the finance department I could be myself with, to whom I could say, 'There's something in this footnote I don't understand; could you walk me
through it?'"
He also advises corporate communicators to get themselves invited to the CFO's regular staff meetings or financial meetings with senior management." You can get a real grasp
on the financial levers and quickly learn from the CEO's and the CFO's points of view what makes the company successful - is it assets? Fees? Receivables?"
Finally, volunteer to serve as the annual report editor. Joyce did it early in his career on the corporate side and says it was an invaluable experience.
The role of the editor is typically to write the CEO's letter, write the company summaries and then to make sense of the financial statements. "It's much more than
proofreading. In that role, you're linked at the hip with the finance department, and it's in their interest to make sure you know what you're writing about."
Call in the Agency
Some finance departments are more open to collaboration with the PR department than others. But the fact that your CFO or your IR counterpart doesn't want to take the time to
help educate you doesn't mean you should give up on the process. "You have to take it upon yourself to educate yourself on the fundamentals: income statements, balance sheets,
financial reporting, how the stock market works," Bellenchia says.
"This is a remarkably important topic, and it's long overdue for corporate communicators," agrees Steve Carr, SVP and managing director of Chicago firm CKPR. He acknowledges
that as an agency professional, his counsel is in his own best interest, but he recommends that PR professionals turn to their agencies to improve their financial knowledge.
Full-service firms will certainly have investor relations and financial communications resources, and even smaller firms usually have some financial comms capabilities. Instead
of bringing the agency on to conduct your financial communications for you, enlist them to help educate you.
Hit the Books
All our experts recommend that if you can't find the resources internally or within your agency of record, your first step should be to take advantage of the resources provided
by the National Investor Relations Institute (NIRI). Whether you browse the organization's Web site (http://www.niri.org), attend a conference,
or take one of the many classes NIRI offers - from investor relations 101 to more in-depth curriculum - the Institute is an invaluable resource.
Universities in most major markets also are beginning to offer investor relations courses. And Jennifer Tweeton, VP of investor relations for Vollmer Public Relations and
winner of the 2002 Platinum PR Award for Financial/ Investor Relations, advises taking an accounting course at your local college.
Bellenchia also recommends local security analysts societies, like the New York Society of Security Analysts, as useful resources.
Regardless of where you turn, understanding your company's financials is no longer optional. "If you're going to work in a business," concludes Joyce, "you have to be versed
in what makes the business run. You can't get away with events and sheen and shine. If that means taking an accounting or finance course, swallow hard, hold your nose and do
it."
(Contacts: Bellenchia, [email protected]; Laguna, 323/836-3000 ext. 815; Joyce, [email protected]; Carr, [email protected]; Tweeton, 713/546-2230)
Quick Fixes
Need help now to understand an earnings statement or other financial material? Check out the following resources for everything from glossaries to the articles our experts
recommend for daily consumption:
- http://www.investorwords.com - A great site if you need to pick up the financial lingo quickly. "Learning finance is like
learning a new language," says CKPR's Carr. - http://www.CEOExpress. com - A Web site aimed at CEOs includes links to business media, electronic financial media, stock quotes, analyst
research and other material. - The Wall Street Journal - The venerable pub is a must-read for anyone in business, say our sources. "If you're a brand or marketing manager, The Journal is the best way to
build a basic understanding of how [financial] issues apply to a company day-to-day," says Fleishman's Bellenchia.
Editor's Note: Look for our follow-up in an upcoming issue, with a look inside the IR department and details on everything you need to know from IR's point of view.