The Power of Obvious

Every employee in a company should be able to describe their company in a way that makes their purpose sound obvious. It endlessly amazes me that many CEOs can't clearly and concisely explain their companies.

When I teach business classes or coach CEOs, I have them put together 3 different descriptions of their company: "The Deck", "The Elevator Pitch", and "The 5 Words".

 The first is the "deck", the ~10 page description of their company that they use with investors to describe their products and/or services. You've seen these - it walks through the entire story of the problem, their solution, market size and plans to penetrate it, financial models, and competition. This is typically presented in a 1 hour meeting, leaving lots of time for questions.

Most leaders don't practice enough, ramble on, and run over an hour because they like the sound of their own voices or because many slides beg additional questions. They've succeeded up to now by winging it, and they plan to do it in their investor meeting, yet new CEOs typically either write far too much or use too much hyperbole to be clear or concise. I come in, hack and slash, refine their story (as was done with me the first time I went through this), and we end up with something coherent.

While investors are the intended audience for the deck, they aren't really the purpose… which is to get their story straight for themselves. Most entrepreneurs have a clear idea in their minds but haven't methodically spent the time to make that plan clear for others. The result is companies in which no two people describe the company's purpose or products in the same terms. They are usually close, but not the same.

"Close" is disastrous for a small company.

I once went into a company where no two people described their primary product the same. Some of the discrepancies were minor issues at a high level, but many involved the way their product worked or in which customers would work with the product. It took me months to understand why, arbitrate between executives, developers, and sales to be sure we had one coherent story.

More important than being consistent was that everyone in the company agreed on what they were doing. The results:

• Developers stopped building features that weren't core to the product.
• Sales stopped over-selling products and forcing developers to scramble to build them post-commitment.
• Executives were promoting a realistic world-view of their products to customers and investors along with a rational vision for company direction.

Everyone was rowing in the same direction. Simple, right?

As I've previously discussed <https://bit.ly/JDsimple>, "simple" takes lots of work., and I spent months of intense work (interviews, analysis, arbitration, iteration) getting to that stage. If the end result looks obvious, I've succeeded. The deck, while a lot of work, is in many ways the easiest part of this process since it's methodical and has room for wiggle-room given the length.

The second version of the story that I ask CEOs to create is the elevator pitch, aka "the pitch", so named to explain the company during a trip on an elevator (for argument sake, 60 seconds). In reality, it's the best way to describe your company to a potential investor or customer on first meeting. It's your first impression, and first impressions are critical to success.

This pitch flows from the deck, but no words can be wasted with only a minute of description. The pitch must be scripted, memorized, and practiced repeatedly. That sounds obvious, but almost every new CEO that I meet refuses to do it. They have it in their mind and want to "wing it", which always means inconsistencies, wordiness, and running over time.

Most CEOs have arrived at that level as subject experts, but that doesn't mean they are expert salesmen and technologists and product specialists (but they are usually one of those). Ensuring that basics are covered completely and clearly without omission or repetition is a result of preparation and practice. When they see the power of a concise, well-rehearsed explanation, they understand the value of the hard work that goes into "simple". Once again, it looks effortless if done correctly.

Most business schools do timed elevator pitch compeitions, with half of the constants running overtime due to insufficient practice. Rather than scripting, they have notes and improvise their wording which is imprecise, lazy, and usually results in a crescendo but missing punchline when the buzzer goes off before it is delivered. In the marketplace, that's guaranteed to lose the sale.

The final exercise that I use to explain a company is a 5-word description.

Why 5 words? Because it demands brevity and clarity. It's a focusing exercise. If they do it in 4 or 6 words, it's not Armageddon. The idea is that someone asks you about your company, you don't want to go into your 1-minute pitch, but you need something clear and provocative. This can be a tag-line, but usually it's just a point of clarity.

I see a lot of companies attempt this with "We democratize blah blah blah" or "WidgetCo saves humanity with blah", which is aspirational word salad meaning nothing to the intended audience but making the speaker feel good about themselves. The response is usually "but what do you actually do?".

The other extreme is "we make software for mathematicians", which is neither provocative nor infomative enough to spawn discussion. It could be educational software for first graders or complex data analytics for nuclear scientists, but the usual response is <conversation> "that's nice" </conversation>

You need to boil down the essence of the company while still creating intrigue.

My favorite example is when, during the first dot-com boom, I worked on a product to bridge the gap between e-mail (which had rapidly grown but not yet achieved adoption among older computer users) and snail-mail. The 5-word description was "we make e-mail real mail". Everyone understood the concept immediately although it usually took a moment to process. The response was almost always "tell me more!".

You can't explain all details of a fusion reactor in 5 words (most CEOs think their product is a fusion reactor), but that's not the point. You are actually building something to successfully solve a problem and sell it. You might have a moment with a very influential person and should capitalize.

Since business doesn't easily fit into 3 scenarios, the purpose of these pitches is to be able to adapt to whatever opportunities present themselves. If you're prepared, you'll be ready and your intended audience will believe that you've completely analyzed the situation and that your solution is obvious.

That's a WIN.

Interested in taking your business to the next level? I consult and coach on technology, operations, marketing, business development, and overall business strategy.

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