If your organization is required to prepare and file an annual report, chances are you’re starting the planning phase now for what is, for most, a fairly complex production process that can last for months.

For Kimble Aydelotte, director of corporate marketing & branding at Black & Veatch Corp., an engineering, consulting and construction company based in Overland Park, Kan., the annual report cycle lasts 8-10 months, beginning in July and ending with printing in March. According to Aydelotte, the long effort is worth it, due to the document’s value as an awareness and marketing piece.

“For us, we not only share with stakeholders what we’ve done, but we paint a picture of where we plan to go in the future,” he says.

That view of the annual report is the consensus of communications professionals PR News interviewed for this story. They say it’s a document that often is the flagship communications piece, not only keeping shareholders in the loop financially, but serving as a key marketing and sales tool—distributed at trade shows and used in major client presentations and proposals.

“Our CEO, who writes a good part of the copy, likes us to focus on who we are and where we’re going, as opposed to what we’ve done in the past,” says Meredith Moore, senior VP of communications at NRG Energy, a Fortune 300 power company based in Princeton, N.J. “We then repackage the front part of the report as a corporate brochure.”

TIE TO THE MISSION STATEMENT

But what makes for an effective annual report? Strategizing is key. Each year Aydelotte’s team and key executives review the company’s business goals and mission statement, and plan the report around a theme: In the case of Black & Veatch, it’s “Building a World of Difference.”

“We plan our content around how our successes tie into that theme, including case studies that feature our clients, and our impact in communities in which we work,” says Aydelotte.

NRG’s strategy is to focus on a theme with a three-year arc. Its 2009 theme is “Moving Clean Energy Forward,” which highlights the company’s environmental efforts, says Moore.

ANNUAL PROCESS

For Aydelotte, the success of the report lies with the input from its 20 different divisions. To receive that input in an organized way, the communications team has developed a seven-page questionnaire distributed to key stakeholders in each of those divisions. “It’s their job to evaluate what makes a success story within their unit,” says Aydelotte. For the 2010 edition, the components of the questionnaire were innovation, sustainability and complex solutions, he adds (see the sidebar for some sample questions).

The biggest challenge for the communications team: “We work in industry in which client approval is very important,” says Aydelotte. So the teams works with the clients through the division leaders, and the payoff is worth it. “We get a lot of requests for our report from our clients, because we tell about their successes as well,” he says.

NRG, on the other hand, doesn’t go the business unit route, preferring instead to weave a larger story throughout the report. The advantage? Moore and her communications team has already chronicled NRG’s story throughout the year in press releases, articles from the media, and other outreach. “We don’t really need others to tell the story,” she says. “We know what happened during the year.” Thus, stakeholder involvement is limited to double checking the copy and final approvals.

IMAGERY IMPORTANT

Because many of Black & Veatch’s solutions are complex, it’s important to use imagery to tell the stories, says Aydelotte, We all know a picture is worth a thousand words, but in Aydelotte’s case, it’s worth at least 600. “We try to keep our word count below 400 for each story,” he says. “It’s important that images tell the story, and that they are also enticing enough to make people want to read the copy.” Thus, much of the report’s budget goes toward photography.

In NRG’s case, illustrations are preferred. Moore believes photos would make the company seem cold, and “illustrations can really draw the reader in.” Moore estimates that 20% of her report budget goes toward illustrators.

GOING DIGITAL

While the SEC still requires companies to put their financial information in print, there’s no stopping an organization from creating an online version. That’s what Creative Co-op, an advertising and design firm, has done with client American Water for the past two years.

“American Water is an innovative company, and to capitalize on that we didn’t want to do the same old paper book,” says Josh Weinstein, president and creative director of Creative Co-Op, based in Exeter, N.H. “An online version is good for the environment, and I believe gives people a better understanding of the company, because it’s very interactive.”

It’s so interactive that for the latest online edition of the report, Weinstein oversaw the shooting of 52 videos featuring company executives.

“It really comes across that there are people at American Water, and it’s not just faceless corporation,” says Weinstein. He adds that all on-camera participants received extensive media training beforehand.

Weinstein cites the main advantage of going online: “What’s nice is that it’s so fluid and malleable,” he says. “It’s easy to make edits, as opposed to making changes as the print product is on the press.”

From a print or online point of view, here is some advice from Aydelotte and Brown:

1. “Clearly understand the audience for your report,” says Aydelotte. “Who are you trying to reach with it besides shareholders—employees, prospective employees or clients?”

2. “Don’t look at the report at as a stand-alone piece,” says Brown. “It’s a sizable investment so repackage it in other forms, such as a marketing brochure.”

3. “The annual report should be a client relationship builder,” says Aydelotte. “Work with them to tell your—and their—success stories.”

4. “Don’t be afraid to take design risks,” says Brown. “That’s how companies stand out from others.” PRN

Engage Key Stakeholders in the Annual Report Process

To get buy-in and critical annual report information from the 20 business units at Black & Veatch, an engineering, consulting and construction company, corporate marketing director Kimble Aydelotte sends a questionnaire to each unit’s leader. Here’s an excerpt:

“[For our annual report...] We’re looking for projects and photography opportunities which illustrate:

• How Black & Veatch provides reliable and sustainable solutions to our clients’ most complex challenges.

• How Black & Veatch is helping our clients improve communities and lives today and into the future.

• How Black & Veatch proposes innovative processes to solve client challenges.

• Identification of thought leaders and their areas of expertise in relation to certain project/stories.

• And, if appropriate, what positive impact this Black & Veatch project had on the environment.”

Aydelotte stresses two things to business unit leaders when choosing projects for annual report: First, choose a project in which enough significant work has been done to make project photography meaningful, he says. Second, projects must have strong, meaningful and detailed proof points.

CONTACT:

Kimble Aydelotte, [email protected]; Meredith Moore,[email protected]; Josh Weinstein, [email protected].