An investigation into whether it's ever advisable to mix humor with IR
How many IROs does it take to screw in a light bulb? Three: one to craft the legal disclaimer, one to webcast the conference call highlighting ‘strategy’, and a third to screw in the bulb itself.
Okay, so that’s not exactly hilarious. The fact is that financial journalists aren’t any more gifted at stand-up than your average IRO. And yet a handful of firms are finding ways to inject humor into everything from investor boilerplate to videotaped IR communications. And lululemon athletica, the Vancouver-based maker of yoga and running clothes, is one company that does humor well.
When Therese Hayes, lululemon’s senior vice president of communications and sustainability, was hired two years ago, her first assignment was to sign off on a brief video entitled Shit yogis say, a spoof of the viral video Shit girls say. Lines from the lululemon video include: ‘I bought some really cool eye shadow for my third eye’ and ‘Did you hear that hemp milk is the new almond milk?’
'Our organization has a willingness to laugh at itself'
‘There were a few words in that video I’d never had to approve before,’ recalls Hayes. ‘They’re bleeped out and, as I was asked to approve it, I thought, Wow, this might be the shortest stay I ever have at a company.’ But in the end Hayes gave her blessing as ‘the culture of lululemon is very accepting of how important it is to have fun.’
Even the video version of lululemon’s annual report is far lighter than most IR communiqués. The 2012 annual opens with a brief, bantering exchange between then CEO Christine Day and CFO John Currie. The opening few seconds provide a brief window into both executives as people – and into the inner workings of the firm (‘fun’ is listed as a core value). ‘The investment business is serious and we want to respect that,’ says Hayes. ‘But our organization has a willingness to laugh at itself.’
Can public companies be funny?
Although humor in IR remains the exception rather than the rule, it has crept into even the most staid corners of the profession: legal disclaimers. Contango Oil & Gas Company included these lines in a recent investor presentation: ‘We have good intentions but all of our projections and estimates will be wrong, and could be materially wrong. Wildcast exploration is expensive, speculative and potentially dangerous… You could lose your entire investment. Don’t be lazy: read our 10Qs, 10Ks and press releases, and if you lose money – please, no tears.’
The company has taken great pains to make sure everyone will recognize this as jocular; IROs really don’t want shareholders scratching their heads and asking: was that meant to be funny? Or is the company dead serious?
A firm’s industry also matters, says Hayes, noting that when she worked as an IRO at a biotech concern, humor was less appropriate. ‘It’s not okay if you have a recall in a drug to make fun of that,’ she says. ‘That’s very serious.’
What’s more, the type of humor a company employs often reflects the personality of the individual management team – and this is a good thing, says RJ Jones, IRO at Zillow, the online real estate database company based in Seattle. He believes the entertaining tweets of Zillow’s CEO Spencer Rascoff can help make up for the fact that too few investors regularly interact with management at any public company. ‘If investors aren’t seeing the leadership team, it’s very difficult for them to get a sense of their personality,’ he explains.
'The humor a firm employs often reflects the leadership's personality'
Zillow’s brand of humor is closer to situation comedy than stand-up: Rascoff trades teasing remarks reminiscent of an episode of Seinfeld. For instance, one running joke is that Jones is following Justin Timberlake on Twitter. When Rascoff found out, he tweeted ‘RJ’s busted.’
In Zillow’s case, Rascoff is the comedian to the IRO’s straight-man act, a dynamic that is not uncommon. Darrell Heaps, CEO at Q4 Web Systems in Toronto, puts it this way: ‘IR people are concerned with compliance, regulation and legal. You don’t see them in public using humor in their communications as they’re typically more buttoned down. If you’re having a one-on-one conversation with IR folks, they can be quite humorous, but they’re not going to do that via formal communications.’
The nature of the IR role inevitably dampens the urge to crack jokes, but humor is also a scarce commodity because comedy is so hard to pull off. ‘There’s a finite universe of people who are humorous and witty,’ says Heaps. ‘And then if you look at who can be funny and humorous on video, that’s another subset of the universe. Even a company like Yahoo!, which brands itself as a ‘fun’ company, is anything but fun if you look at its quarterly earnings webcast. [These communications are] very, very serious.’
Howard Lindzon, chairman, CEO and co-founder of StockTwits, is widely known for his amusing online remarks, but he believes even chief executives at public firms are constrained by the nature of their roles. ‘I’m funny,’ he says. ‘But I’m the CEO of a private company, so it doesn’t count.’
Irish budget airline Ryanair is an example of how humor can potentially bomb. CEO Michael O’Leary often dresses in kooky outfits and has taken outspoken absurdity to new heights. He famously called passengers who forget to print their boarding passes ‘idiots’, and suggested that flight attendants be incentivized for losing weight. He also once opened an earnings conference by saying two of his executives were ‘presently making love in the gentlemen’s toilets, such is their excitement at today’s results.’
Social media and humor
Of the many advantages social media can confer on financial communications, it’s rare for anyone to include the chance to deliver memorable quips. And yet it’s clear that Facebook and Twitter are great boons to a lighter, funnier kind of corporate-investor exchange. For instance, in June 2013, when Day announced her decision to step down from lululemon, the stock price dropped sharply and questions began rolling in about whether her retirement had anything to do with the recall of yoga pants that had proven embarrassingly sheer.
Day had explained the decision was personal, but the rumors continued. The company decided to deflect speculation by immediately posting a ‘CEO wanted’ ad on lululemon.com and the company’s Facebook page. ‘You report to no one, you are the CEO (duh),’ said the ad. ‘You are passionate about doing CEO-type stuff like making decisions, having a vision and being the head boss person.’
The timing of the ad contributed to its entertainment value. ‘People who are quick tend to like Twitter,’ says Heaps. ‘Certain comments that are witty only work if they’re made right now, and Twitter allows that to happen. Sometimes if you wait a day, it’s not really funny anymore.’
Although social media and humor are a potentially winning combination, Lindzon warns that getting it right is ‘an art.’ His advice? Before attempting to be funny in investor communications, develop an ongoing relationship through regular participation on StockTwits, Twitter, Facebook, blogs and other online channels.
‘If the first tweet from an IR person is an attempt to be funny, there’s no context and it won’t work,’ he explains. ‘The smartest plan for IR departments is to just share, share, share. Once people get used to hearing from you, you can drop in a one-liner.’