Yahoo CEO on Video Earnings Call: Breakthrough or Saturday Night Live Parody?
With a groundbreaking video conference call for Yahoo’s second quarter earnings, CEO Melissa Meyer may have started a new trend that will require a whole new level of skill by C-Suite officers during conference calls.
For those not familiar with earnings calls, normally CEOs, chief financial officers (CFO) and investor relations officers will crowd around a speaker phone while talking about a company’s earnings every quarter. These calls are most often accompanied by a slide show that they walk through on the financials.
Yahoo’s earnings call this week is said to be the first time that a company has used video technology on such a call. As senior editor Emily Chasan noted in the Wall Street Journal CFO Blog, “The surprise in Yahoo Inc.’s second-quarter earnings may have been the company’s live video conference and real-time tweets.”
The call featured Meyer as well as CFO Ken Goldman. Critics have derided the set up of the two as a parody from Saturday Night Live, with the somewhat animated Meyer next to Goldman, who is clearly uncomfortable and untrained for the camera.
I applaud the risk taking by Yahoo. My assessment is that is was not a disaster, but was really not ready for primetime. There’s a certain awkwardness that overtakes the call. I’m biased since I do this training for executives, but they clearly needed more rehearsal, more coaching for the camera.
CEO Viral Embarrassment
As I discuss below, body language, teleprompter skills and other factors will have a huge impact if more calls add video. (Imagine the effect on a company's reputation due to a bad video call where the CEO would go viral in embarrassing YouTube videos.)
First, a little explanation: While all investors and journalists have the opportunity to listen to earnings calls, the core audience is the analysts who work for investment banks and institutional investors.
An earnings call can be an extremely taxing activity for management, particularly if business is not going well. They spend weeks or months preparing for each call. Bright analysts who know your company spend the time to dig deep down into your financials.
Then they try to pick out patterns and details so they may predict for their clients whether your company will succeed or whether you are “smoking crack.” (A technical business term.)
It’s like being on trial--being interrogated over the phone.
‘You Bleeping Bleep’
CEOs who are not used to being challenged, sometimes take offense. There are a couple of famous examples of missteps.
In one, Jeffrey Skilling, the currently jailed former CEO of Enron, sarcastically responded to an analyst with “we appreciate it, a**hole.” In another, Al Lord, CEO of Sallie Mae, apparently thinking the call had ended, reportedly said “let’s get the **** out of here.”
Which brings us to video earnings calls. The implications of adding video are huge:
A large percentage of what we communicate comes from our non-verbal behavior. While some of that is the tone and nuance of our voices, we draw much of our meaning from body language, including facial expressions.
CFO Goldman said during the call “It’s actually a lot of fun to be experimenting with a new format…” but his words belied his obvious discomfort, shown by continually fiddling with his pen and clasping and unclasping his hands.
Try this yourself: one of tips I give my clients to understand the impact of body language is to watch the national news or talk shows with the volume muted. Then see how much information you gain about whether the person is confident, defensive and/or being truthful.
In particular, facial expressions provide a wealth of information. You can learn more about this from my exclusive video interview during the presidential election last year with facial coding expert Dan Hill. He analyzed the real feelings of Obama and Romney, during their first debate.
Looking at the camera
When I train executives to do “remote” interviews, the hardest part for them is to adapt to looking directly into a camera and acting as if they’re talking directly to a person. This is unnatural. There are no eyes to look at, no face to see--just a voice talking in your ear and you responding to a small shield of glass.
During video conference calls, executives will need to learn to feel comfortable and confident talking directly to an unseen audience through the camera.
Executives will now need to become adept at reading from a teleprompter. The scripts that would normally be on printed on paper for reading into a speakerphone will now be on the teleprompter screen. To look natural, teleprompter reading requires smooth eye movement and facial animation.
Many of our clients are deeply analytical people--CFOs, CEOs and other C-suite executives. They are extremely adept at analyzing and using data to grow businesses.
Being on camera is not their preferred activity.
Adapting to the demands of the camera means controlling your body language and expressions, which can be very difficult and may create a lot of anxiety. For instance, there will be a need to smile at times and express confidence and avoid looks of disgust when listening to certain analysts’ questions.
Relying on Notes
The beauty of being on a speakerphone is that you can use notes. In fact, executives pass notes around to help one another answer questions.
On video, an over-reliance on notes might be interpreted as being uninformed or incompetent. And passing a note to the CEO to supply an answer? Forget it--that was then. The CEO will look weak.
So Yahoo has broken some ground here and may open the floodgates for other video calls. But companies should tread carefully, without proper preparation a video conference call could easily become a disaster with viral YouTube videos making fun of the CEO.
To view the original video of Yahoo's conference call click here.
If you have questions or comments about the implications of video earnings conference calls, please leave a comment or contact me here.
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Thank you, John