Festoons and Bunting

If a company is coming off an excellent year, an annual report can be a joy to produce. The corporate symbols crash, and the applause is translated into proud words and pictures.

On the other hand, a company coming off a bad year has to very carefully impart information, particularly what the future plans and goals entail.

Several years ago, a major Atlanta company came off a year that saw its stock price dissolve from $36 per share to $9. The letter from the (new) company president began with the following sentence: “Hell hath no fury like a stockholder scorned.” The new CEO was commended for his candor, and the company successfully began a rebuilding process.

The importance of an annual report cannot be understated. It is a corporation’s most prominent business communication tool. It is a public accounting of past performance and a podium for current status and future intent. It tells stockholders how their investments are being used and how they will be used. AR’s are kept in the offices of stockbrokers and are the menus, so to speak, that will be used to attract, or repel, current and potential investors.

Certain basics must be included in every annual report. The intro from the company’s chief(s) traditionally appears, usually in the form of a letter. Financial data should be prominent and easy to grasp. It is the first place analysts and brokers peruse. Graphs are popular in this section. A distillation of the company’s businesses and markets should appear. Operations’ reviews can outline corporate particulars. Attractive photographs and captions are nearly always digested before text. And headlines and subheads are effective, quick-read tools to include.

For several years, Atlanta has been a business boomtown. Leading national business publications have consistently profiled the city as being one of the best places in America to relocate corporate headquarters, and many companies have done just that. Home to many high-profile companies, Atlanta is also home for premier companies that produce annual reports, and the latter have interesting observations and insights into producing these unique documents.

Mark Phelan, of Phelan Annual Reports, has a company that certainly has an honest, no-nonsense name. If you have an AR question, chances are he’s got the answer. “I have been producing annual reports for the past 20 years. I began at Perry Communications, which closed in 1990. Before myself, my father, Matt Phelan, has been producing annual reports for the past 40 years, his first being for the C&S Bank (now BankAmerica) annual report in 1960. He started the Corporate Communications division of Stein Printing Company, where most of our competition got their start also. Jim Furbish, of Corporate Reports, was hired by dad back in the early 70’s. Critt Graham worked on the Goodyear report as well. It’s a small community it seems. Our firm, Phelan Annual Reports, and its personnel, have the longest history of producing annual reports in Atlanta.”

What are the benefits of working in this industry? “One can receive a great sense of accomplishment in producing an annual report,” he says. “It’s like going into battle…if you survive, you are able to tell stories and embellish how late you really were up ‘til checking the proofs at the printer! It is not for the faint of heart, however. I can’t say that I’ve seen it all, but I’ve seen my share of good clients, bad clients, good jobs, jobs that seem to have been from Hell. You know…the usual tales. When a report is finished, it’s like that saying from the old TV show “The A Team”: ‘I love it when a good plan comes together’.”

What are the “challenges” Phelan encounters?

“Stress,” he immediately says. “It’s the number one bad thing. There is a great deal of stress, and if you can’t stand the heat, well... I’ve seen it give people heart attacks, lose jobs during the process, get divorces, etc. It is not for the weak. It requires a certain outlook and attitude to be successful.”

Yes, but the money… What kind of money can an annual report gig land the gigger?

“Not enough, that’s for sure!” he answers, laughing. “It really depends on the area you are working. Photographers, artists, graphic designers, copywriters, account reps, printers (commercial and financial), binders, mail houses, pick your poison. The range for any of the above would be from starving to over a million dollars a year. It really depends on your ability, too. There are a lot of ‘experts’ out there, some right out of college no less, and they’re not making a decent living. It really is a big pool of people who say they work on annual reports. I had a photographer come in one time, and while he was showing me his portfolio, he was telling me some of the annual reports he’d shot. One of the ones he mentioned was a company I had been producing for over 12 years! I can’t imagine someone like that making a very good living.”

Phelan has sage advice on what to do, and what not to do. “Be honest. Be honest with who you are, what you can do and provide, and most importantly, what you can’t do. That may not make you rich, but it will make you a success. If you can’t do something, admit it. That’s how you’ll grow. Learn from a good teacher. I had a great teacher in my father, Matt Phelan. While he’s far from perfect, I can’t imagine anyone who knows more about the process. Even with the new technology and all its changes, he still knows more than anyone I’ve met in the business. I can honestly say that I don’t remember a time in my life that wasn’t revolving around a report or its schedule. I think that is why I’m able to take all of the insanity in stride and not be crushed under the weight of deadlines.”

Are there any particular industries to embrace or avoid when taking on an annual report? “Can’t really answer that one. There are some industries that are easier to produce for than others. Easy ones include any company that has a good marketing presence. The harder ones are the obtuse corporations that, even after explaining what it is they produce or provide, you still haven’t a clue what it is they do. Pharmaceuticals, for example. Try explaining something that is very complex to an audience that includes doctors, analysts, grandmothers, etc. The audience is TOO wide, and whichever direction you decide to take, a simplistic approach or more complex, you’re going to frustrate one of the audiences. Technology companies are like this, too. My father belongs to the generation of people who didn’t grow up with computers and still doesn’t understand them. When an industry keeps morphing and growing exponentially, it’s hard for anyone to keep up with all of the changes. That makes it difficult to decide which direction to aim the message. Which audience becomes more important?”

His worst experience? “I have war stories, like anyone else who’s spent any length of time in this industry, but here’s a good one. I was on a photo shoot in Washington, D.C., with a photographer and his assistant. We were to shoot a computer screen reflecting in the glasses of the person sitting at the terminal. We had turned off all of the lights so we could get the long exposure required, but right above the computer was a bank of emergency lights that remain on even when the others are turned off. We were waiting for a ladder to come on, so we could pull the lamps out of their sockets when the assistant gets the bright idea to hop up on the table where the computer is to unscrew the lights. The photographer and I say, ‘No, let’s just wait on the ladder,’ but to no avail. Suddenly, the table gives way, down come the assistant, the computer, a printer, and a couple of modems, crashing to the floor. People rush in, wondering what’s going on, while lying on the floor is the assistant with a broken elbow and about $30,000 worth of my client’s computer. Two weeks later, I got a call from my client asking me if I would be willing to make a statement to their attorney about what had happened. The assistant had contacted a lawyer and was suing my client for worker’s comp! I lost the client, and there wasn’t a thing I could do about it. That really made me sick.

“I’ve worked on over 400 reports over the past 20 years. My father has worked on over 1,000. I was tickled the other day when a new prospect was sizing me up. Sometimes, people try to impress you with their vast knowledge, or lack thereof, and this guy must have thought I was 22. He told me that he has ‘personally worked on seven annual reports!’ I didn’t quite know what he wanted me to say to that. I just congratulated him and feigned amazement. There ARE a lot of ‘instant experts.’ Some even have their own contests. The people I am impressed with are those who, year in and year out, produce some of the finest reports in the country. I keep a list of who is creating REAL and GOOD work each year. Photographers, designers, illustrators, printers and others. They’re all part of the mix. Find good people, and keep them close.”

Matt Rollins, Creative Director of EAI, has been designing and creating annual reports for four years. His advice is, “…to dig deep into a corporation, understand it, then persuade others to invest in it. Influencing what a corporation says to its internal and external audiences and then crafting how that message is delivered. We try to push the envelope on what is a traditionally conservative format.” The bad things Rollins encounters? “Politics, groupthink, fear-based decisions from the client, and no social life during the AR season.”

What kind of money can one make?

“Lots. Especially for a designer.”

Some do’s and don’ts, “Don’t give in to client conservatism. Don’t just ‘decorate.’ Push the client to communicate honestly. Earn the right, as a creative, to speak with authority about the client’s business.”

One of Rollins’ more pleasant AR experiences was “Doing a vodka shoot in Nshzny Novgorod, Russia at 2:00 in the morning with a group of automotive workers whose plant had recently been privatized. We were there covering the story for the new IBM report. It was very interesting.”

His worst experiences?

“Comps. And more comps. And more comps.”

Phill Scopp, President of Creative R&D, has been in the AR world for 11 years, and he likes the large scope of that type of job, compared to others. “You get deeply involved in visualizing concepts, strategies, and making many pages of text well-designed and readable.”

Scopp likes the money involved, “But one annual will not pay your salary for a year.” His dislikes include, “Prima donna management that won’t take responsibility for their own errors. Companies that don’t respect the value of the annual or the value of the creative shop developing the annual. I don’t particularly like companies that have no imagination and want cheap, cookie cutter work.”

His advice on what one should do on an AR project?

“Get upper management involved early. Put a lot of effort into developing the foundation: strategy and concept. Look at the market and the competition. Do everything as early as possible. Work with a printer that has done annuals before, so as to take advantage of their knowledge. Communicate constantly with your contact(s). Get the client to sign everything.”

And what not to do?

“Don’t make the mistake of thinking this is a marketing brochure to potential customers that will buy products or services, but it can be considered a marketing tool for the company’s valuation to financial customers who will buy or hold onto stock. Don’t wait until the last minute to do anything. Don’t spell the company name wrong in the mockups. Don’t let the client contract with the printer, and don’t let the job go to the printer until you have signed approval and have collected all fees.”

Any industries to avoid or embrace?

“Not as far as I can tell,” he says. “They are all a challenge.”

Scopp’s best client experience in an AR project was “…a client who asked why we designed something in a certain way. Of course, we did some explorations and studies before we made our presentation, but to make a long story short, I said, ‘Because we felt like it.’ The client said, ‘OK.’ Now, that’s trust.”

His worst experience?

“A CEO we were dealing with had approved layouts, although he didn’t sign them throughout the development process. Our contact wasn’t available to be on press, but we printed the book anyway. The CEO saw an advance copy and then decided he didn’t like the way it looked. I looked at another advance copy and saw the printer had done a terrible job. After I OK’d press sheets, they didn’t keep colors true, and the book trimmed crooked. The printer blamed us. Our ‘client’ had contracted directly with the printer, so they had the printer make some layout changes and reprint, doing a much better job. Our only consolation was that the CEO was such a jerk to everyone that he was forced to resign!”

Scopp continued by saying, “Annual reports are in flux. There is much questioning about the role of the online versus the printed annual. Some CFO’s only want the annual online. ‘Saves money,’ they say. But that does a disservice to the ‘feel’ of the company. In my mind, online communication doesn’t have the ‘soul’ of something you can hold in your hands. Economics and the attitude of management will play a large role in determining this balance. I think both will coexist for a while.”

Some advice to anyone working on an annual report job: if you take one on, roll up your sleeves, and keep them rolled up. Don’t plan any vacations anytime soon, particularly a trip involving your passport. You can make some very good money, and you can get great repeat business. But, like being a Hollywood actor, you’re only as good as your last good role. At best, your last two roles.

There are a lot of other suppliers out there ready to take your place.

For more information about the world of annual reports, look up www.zpub.com for some excellent tips for creating an AR. It also has The Annual Reports Library, a collection of over 1.5 million reports you can access.