WHAT YOU FEEL: you don’t know how anyone can understand unless they have all the details

PERSPECTIVE: Colin Powell said “Leaders are almost always great simplifiers, who can cut through argument, debate, and doubt to offer a solution everybody can understand.” One of your most important roles is to communicate with the various constituents of the company. Whether it is a customer, employee, investor or advisor, you must be able to quickly and succinctly convey the element of your business important to them. Simple. Easily understood. Clear, and clear to an individual that is not living and breathing it every day like you are.

Many entrepreneurs have a disdain for brevity. Actually, that’s not true. It’s not that they have a disdain for brevity but it is hard to step back from the daily complexities of the business to simplify. It’s understandable. Your balloon is full and you are looking to let air out. In addition, you know every detail of every issue. If someone asked me how we got our logo, there is a ten page version and a ten second version. You also have this notion, which is normally wrong, that an individual has to know all of the details of an issue to understand it.

Put another way “short and sweet.” Simplicity leads to depth. When a party understands the essence of something, it leads to deeper discussions on the topic. If an individual cannot grasp the essence of your value story, your product strategy, or your business model, it is unlikely you get into a meaningful debate on its merits. Think about the left panel of the front page of the Wall Street Journal. One paragraph about the top stories. Enough to spark your interest. If you get the core of the story, you read more. This is how to think about communications.

If you fail to do this, progress will be harder. With customers, sales cycles get longer. With investors, deals get harder. With employees, your ability to keep them motivated and aligned becomes harder. For third parties, like advisors, who dip in and out of your business at infrequent intervals, it becomes difficult to leverage their scarce and valuable time to be productive.

Also, don’t underestimate the negative impact it can have if dealing with your company seems “complicated.” One of the nicest compliments customers gave my company was that before they spoke with us, rewards in healthcare seemed complicated and after they spoke with us, it seemed simple. When questions are consistently met with long, complicated answers, it wears down your constituents. I recently asked an entrepreneur “what is the price for the product?” The answer was so long and complicated that I stopped listening. If this occurs on a regular basis, interacting with you and your company becomes a chore. For example, imagine if you asked someone a simple question like “what is your business model?” and the answer was:

“Our business model is still in development and we’re thinking through different ways to do it. We have looked at other companies in the space and still don’t know what the right model is. Our board thinks it should be a license model and some of my team members think it should be consulting. I can’t decide which way are we going to go. Version 7 of the financial model uses the license model and I’m not sure if that’s what we’re going to market with for the investor presentation.”

After the entrepreneur is done letting air out of the balloon, the person who asked original question says, “so what is your business model?” Instead you could respond:

“License model with a two-year term.”

Again, this is understandable – you have years of background on every issue. You must develop and nurture the skill to cut things to their essence. Clarity comes not from explaining the details, but rather from creating understanding with those that don’t have the details. Your job is to clearly and quickly communicate with employees, investors, and customers.

My suggestion is to implement a few tools to keep things short and sweet:

• It Doesn’t Matter That it Makes Sense to You. You will often hear entrepreneurs say about customers, employees or investors “they don’t get it.” Interpret this to mean that you are not communicating effectively enough to have someone understand. It only matters that they understand – not that you do.

• Answer Questions Like You are A Witness at a Trial. Communicate the core point you are trying to make. There will always be time for more detail. For example, if someone asks what you will do with their $1 million investment, the answer might be “$500,000 to hire a VP of Sales and a VP of Technology, $300,000 for product development, $100,000 for operations and $100,000 for miscellaneous.” Get good at nailing the essence of an issue. If people want more, they will ask. 

• Weekly Business Summary. Things move fast and it is hard to keep everyone informed. Distributing a one page business summary at the same time each week (I used to send Sunday night before the week started) that updated company constituents on the business eliminates the need to do this multiple times on an ad hoc basis during the week and keeps people on the same page.

• The One Pager. When an issue does require detail, the communication should not exceed one page. If you create something greater than a page, pare it down to one page. Assume no one is reading more than one page. If you can’t communicate something in one page, you aren’t bringing enough clarity to the content. A contact that wanted to introduce a company to a potential investor asked an entrepreneur “can you provide me a high level summary of the business? She asked me to review it before she sent it. It was four pages of single spaced content. She emailed me and asked what I thought and I said, “Not sure because I would never read something that long and neither will your investor.”

• One Paragraph E-mails. There are many times throughout the day that you are responding to emails. Keep your emails to one paragraph – and that paragraph can’t be 1000 words. Most people will not read five or ten paragraph emails.

• Pretend You Are On Twitter. Tailor your communications like you do when you Tweet. Distill messages to their core. With Twitter, you may start with 200 characters but you pare it down to 140. Whether it is a larger issue that justifies a one pager, or a smaller one that deserves one paragraph, think of those as your limits. Chances are that no one is reading anything over those lengths anyway.

Keeping it simple is especially important when it comes to investor communications. Investors look at hundreds of investments and will pass if they don’t quickly grasp the value of the business:

Clive Davis is a music industry legend known for discovering Whitney Houston and helping artists such as Earth, Wind and Fire, Aretha Franklin, Rod Stewart, Alicia Keys, Barry Manilow, Christina Aguilera, Carlos Santana, Kelly Clarkson, Leona Lewis and Jennifer Hudson. He has listened to hundreds if not thousands of demo tapes. He was asked how he choses artists from the clutter. His response was that he chose songs that made him tap his feet.

Investors need to tap their feet. If a leader cannot clearly communicate the value of the business, investors will pass. In addition, when investors interact with companies and their leaders, they are not only evaluating the merits of the business but also the entrepreneur and his or her team. Investors understand how difficult it is to cut through the clutter of information that exists in the world to launch a new concept or idea. They want a leader that can communicate clearly and effectively. Think of it this way. There might be an envelope in your mailbox saying that you won $100 million, but there is a 0.01 percent chance that you will open it. Investors want to see how you can cut through the noise and communicate to customers, employees, vendors and other constituents to bring the business to life.

Being a good communicator is a skill that you should take pride in developing. Make a commitment to being a better communicator. Anyone can write a five-page paper on a topic. Good leaders can distill five pages into one page that everyone will read and understand.

Click here to Subscribe to The Lonely Entrepreneur Blog