What a difference a year makes

Rummaging through Ericsson’s old annual reports (as you do), I came across something interesting. In 2002, the board of directors kicked off the report like this:

‘Ericsson’s core business is to be a preferred vendor of carrier-class communications systems to leading operators of mobile and fixed networks. We believe we are the leading supplier of mobile communication systems … and we have a strong position in solutions for fixed networks regarding next generation of IP-based communication and data.’

Okay, not very interesting. But compare that lifeless, hedging paragraph and these opening words from the next year’s report:

‘Lots of exciting things start with a phone call. Such was the case when I received a call in January 2003 inviting me to become CEO of Ericsson. This is an extraordinary company. I’ve always thought so, and I believe it even more now.’

Admittedly the arrival of a new CEO (Carl-Henric Svanberg, who did six years at Ericsson and is now chairman at BP) was a corking angle not available to most annual report writers. But which company would you rather invest in? Grey, stultifying 2002 Ericsson with its faceless board? Or incisive, go-getting 2003 Ericsson with its fired-up CEO?

Most companies are staring down the barrel of quarter four. It’ll soon be annual report time. What kind of message is it going to be this year? Solid showing in our big markets and hopeful signs in emerging ones? Making painful but necessary changes to weather a slump in demand?

Whatever it is, there’s no excuse for making it boring. Whether it’s good news, bad or somewhere in between, investors want you to give it to them straight. They want to hear you’ve got everything under control. That you’ve got a clear idea of what the business is doing next year and why. They’d like evidence to back all that up, and they’ll sniff out hyperbole a mile off.

But they don’t want to be put to sleep. They want to know there’s a steady, strong hand on the tiller, not a dead one. Investors are more wary, need more convincing and crave more reassurance than ever. That’s worth thinking about as you craft those all-important words.