The Presentation: How to Persuade an Audience to Take Action - PDF document

The Presentation: How to Persuade an Audience to Take Action Professor Michael J. Mauboussin

The Presentation 1. Organizing the presentation a. The message b. The audience c. Prioritization 2. Presentation structure a. Introduction b. Context c. Body d. Valuation e. Summary 3. Presentation delivery a. Confidence, conviction, and enthusiasm b. Know yourself c. Active words, active voice d. Read the audience e. Language — words to present by f. Posture 4. Visuals a. Coordinate visuals with draft presentation b. Figures stand alone c. Graphics visually support the point d. Slide/time ratio e. Handouts (investment related) 5. Questions and Answers a. Anticipate b. Listen to the whole question, answer the REAL question c. Admit mistakes d. Offer to follow up on answers you don’t know e. Advanced technique: acknowledge, bridge, message 6. Common errors a. Um’s, ah’s, you knows b. Hands c. Talking to the slides d. The number derby e. The bore f. The jargon jockey 2

Organizing the Presentation — PREPARATION is KEY! A presentation is an exercise in persuasion. The goal is to encourage the audience to take action. You want to inform and entertain your audience, while making sure you never bore or insult them. Hone the message The message is the core of persuasion. Consider questions like: what do I want my audience to do? Why should they do it? Good messages have three common features. They are:  Clear – straightforward, logical, uncluttered  Focused – short  Compelling – tell the audience why they should act Know your audience Recognize audiences are usually mentally lazy, have short attention spans, and generally dislike presentations (think of when you’re in the audience!) When assessing the audience, consider the following:  What do they think of your message? – Audiences predisposed to agree with you may overlook the weak spots in your message, while those in disagreement will be looking for holes.  What do they think of you? – Does the audience consider you trustworthy and credible? Or unproven and uneven?  What is their state of mind? – Consider the audience’s mood. Are they coming off a good or bad period? How will they hear your message? Prioritize The investment world is replete with information, facts, and figures. Your goal is to get to what matters. A common error is providing superfluous material that only clouds the message. This part of the preparation is analytical. When prioritizing, ask these questions:  Which issues are most important? – Spare the audience everything you know, and get to what they need to know. Be parsimonious.  What is necessary to make a decision? – If the goal is an action, make sure the audience has the information necessary to act.  Is my analysis economically sound? – Make sure your case is logical and grounded in sound economics. 3

The Presentation You can use this format for presentations between 3 and 10 minutes. Introduction Start with 1- 2 sentences that summarize your message (for us, the variant perception). Start with your conclusion! If you can’t state the variant perception clearly and concisely, you have more work to do. Portfolio managers have short attention spans. You must hook them early. Context Get the portfolio manager/investment team up to speed quickly — but not by talking fast — on the key facts they need. For example, market capitalization, 52- week range, major developments, etc. Body Ideally, you should offer three bullets to substantiate the case. When developing bullets, bear some thoughts in mind:  Have a clear lead thought. – “I expect margins to improve from 3 to 8 percent in the next two years.”  Provide facts or analysis to support your thought. – You need to provide evidence for your thought. “My analysis suggests the product mix is rapidly changing, which will serve to lift the margins 500 basis points.”  Quantify the impact. – Demonstrate the materiality of the point. “The margin improvement translates into $1 of incremental earnings power the financial community and stock have yet to reflect.” Valuation Valuation is a translator: it translates cash flows into a value, and a value into cash flows. Bear this in mind, as the goal is to identify gaps between market price and value. Some issues to consider:  Make sure you differentiate between fundamentals and expectations  Use multiples, FCF yields, private market values, and comparables  Include a decision tree – make sure you reflect probabilities and outcomes Summary Briefly summarize variant perception (and then stop talking) 4

The Delivery Having lots of great content by no means assures a successful presentation. Build C,C,E CCE stands for confidence, conviction, and enthusiasm:  Confidence – confidence comes with preparation: a clear message, audience awareness, a well-scripted presentation  Conviction – conviction comes from good research: a thorough understanding of the financials and an attractive margin of safety  Enthusiasm – who said work couldn’t be fun? After all of the preparation is done, the presentation is the payoff. Shift gears and have fun! Know yourself Gene Zelazny provides the following chain for success: Know yourself  Know your material  Know your audience  Know your message Knowing yourself means you make sure that you take advantage of your strengths and mitigate your weaknesses. Active words, active voice Choose active and bright words. Strong, active words are crucial, especially in communicating the variant perception/message. Avoid the passive voice (true for writing as well). Read the audience Watch your audience carefully. If they appear lethargic, use more energy. If they appear puzzled, slow down and explain the point more clearly. Language Consider using analogies and anecdotes when appropriate. Stories are a powerful communication device. Use simple words and short sentences. Posture Sit up straight, feet firmly planted on the floor. Project out. Get and stay excited. Seek eye contact. Keep your hands free and gesticulate. 5

Visuals Visuals should complement and enhance the presentation, but should NOT be a substitute for the presentation. Coordinate visuals with the draft presentation As you draft the presentation, consider if there are visuals that may enhance the discussion. Think like a choreographer. You are coordinating the verbal and the visual — and they need to go together fluidly. Make all figures stand alone Try to generate figures that are self-explanatory. Label everything (e.g., axis, lines, etc.) clearly. Apply the random paper test. Make sure all slides are clearly legible. Avoid too much text on slides. Make the graphics support the point You have alternatives — pie charts, bar charts, line charts, etc. — so think about which graphic best illustrates the concept. Consider whether you can better represent the idea graphically. Slide to time ratio The tendency is to use too many rather than too few slides. One useful rule of thumb suggests one slide for every two presentation minutes. So an 18 minute presentation would employ about 9 slides. Handouts A handout should include all the information an audience member needs to make a thoughtful decision. Make sure you prepare all of your handouts ahead of time, and that you bring enough copies for everyone in the audience. Avoid last minute scrambling. The same is true for audio-visual. If you are using a laptop and projector, make sure everything is working before you start. Try not to have any technology snafus. 6

Questions and Answers You can’t let down your guard after a presentation. The Q&A session is often crucial in determining whether your presentation goes well. Anticipate In the process of organizing and crafting your presentation, consider carefully what questions your audience is likely to have. Naturally, you should address the most obvious questions within the presentation, but time will not allow you to speak to all possible queries. Be prepared to answer a healthy list of logical questions. Make sure you have plenty of backup material with you. Listen to the whole question, answer the REAL question As people are asking questions, our brains are often having an internal dialogue: “Do I know t he answer to this question? Yes! No!” When we thi nk we know the answer, we often interrupt the questioner. Resist the temptation. Listen to the whole question, pause, and answer the question asked. Repeat the question only if you’re not clear on what’s being asked. Listen, too, for the real question and answer that if possible. Admit mistakes If you make an error in your presentation or on a visual, admit it. Use it as a learning experience. Naturally, you want to avoid errors, but mistakes happen. Offer to follow up on answers you don’t know Acknow ledge if you don’t know the answer. If you have a tentative answer, share it. Make it clear the answer is your best response on the spot and you will report the final answer. Advanced technique In dealing with the press or when you have a specific message you want to convey, use the “ acknowledge, bridge, message ” technique:  Acknowledge – Let the questioner know you heard the question  Bridge – Transition from the question posed to what you want to say  Message – Repeat your message 7