How to write annual reports

Author : Patrick Neylan

Posted : 19 / 08 / 12

Emphasis - how to write annual reports0 Annual reports should be focused, well written and dynamic – and, above all, they mustn’t shy away from giving a clear and accurate message.

A good place to begin when you need to write one (or, indeed, any other document), is with a question.

Why do you write?

This isn’t as foolish a question as it seems. We all write, but the style will differ depending on the medium and the audience. Criticising government policy in a column in the Financial Times needs a certain degree of logic and rhetoric. Criticising government policy on the wall of a public convenience, however, demands a style that is less formal and more succinct. Oh, and a good-sized permanent marker. (A biro will make you look like an amateur.)

Every business action – including communication – must be targeted, with a clear result in mind. Internal actions are almost always intended to improve efficiency, while external actions have three main aims:

1. to increase sales
2. to promote the brand
3. to reassure current or potential shareholders.

A lot of bad business writing is born of an obsession with number three. We are so afraid of saying something that might be construed negatively that we opt to say nothing at all. Sometimes that’s fine, when your purpose is to reassure; to show that the writer and his organisation conform to preconceived notions. Like a parent saying ‘there, there, there’ to a crying baby, the words themselves don’t matter.

If you’re a listed company, then there are rules about what’s in your annual report and too often the summit of achievement is to get it written without attracting any attention. A simple description of the business position is all that’s called for. Here’s a middling example – neither good nor bad – from Tesco chief executive Philip Clarke:

‘In the UK, we have an outstanding core business. It made progress in the year but some aspects of our performance can improve. Stronger sales momentum here is a key priority and I am confident that the focus and energy our new UK leadership team is bringing to the business will see a return to form in the months ahead as Tesco tries to do its bit to help customers who face pressure on their household budgets.

‘The increasing scale and competitiveness of our international businesses are now driving strong growth in sales, market share, profits and returns, supported by the generally improving global economic environment. We have built some excellent springboards for future growth, and whilst there is still work to do, particularly in the United States, I am delighted with our performance in Europe and Asia, where I expect further strong growth this year and beyond.’

Taken from the Tesco annual report 2011

It uses fairly plain English to describe the situation in Tesco’s main markets in guardedly optimistic terms, while refusing to promise anything. You might point out that Tesco’s share price dropped by a quarter following publication of the results, but we expect the CEO’s spectacles to be rose-tinted.

But things can go badly wrong if you try to impress your readers. Lucy Kellaway of the FT gave her award for Outstanding Services to Bunkum to Angela Ahrendts, CEO of Burberry, for this horror from the company’s annual report:

‘In the wholesale channel, Burberry exited doors not aligned with brand status and invested in presentation through both enhanced assortments and dedicated, customised real estate in key doors.’

Such cliché-ridden jargon only invites ridicule. So how do you avoid becoming the target of mockery? What rules can you follow if you actually want to say something, to convey a message, to change minds or inspire action? Whole books have been written on this subject, but some of the basics can be summed up here.

1. Write it three times

Your first draft is simply a list of the points you want to cover. Your second draft gets those points into some sort of coherent narrative. Don’t worry about it being an unreadable mess or that you’ve used the wrong word here and there. No-one will ever read it but you, although you might be surprised to find your prose is more vigorous than normal – especially if you’re the sort of executive who can speak with charisma. The third draft will tidy it up, ideally without smothering the vibrancy of the writing. Then get someone to check it and edit it. If it’s for publication, use an outside professional.

2. Avoid clichés

Your readers will switch off the moment you synergise an ecosystem. As soon as you leverage solutions to issues going forward, or, worse, exit a door not aligned with brand status, you are doing exactly what teenagers do when wearing the uniform of whatever subculture is cool this week. They are masking their individuality in an effort to conform. Clichés are the calling cards of a mind that has stopped thinking for itself and is using thoughts that are off-the-shelf, one-size-fits-all, microwave-for-three-minutes-for-a-delicious-individual-meal. Clichés are verbal clip-art, which means mediocrity. If you are familiar with seeing a word or phrase in print, don’t use it.

3. Use the right imagery

We use imagery all the time, because it brings our prose to life and paints pictures in the mind. It also reveals a lot about a writer’s attitude. So, when my local health trust writes about ‘delivering healthcare’, I know that they think of healthcare as a commodity. Their language implies that the personal, human activity of caring is beneath their dignity and a long way from their thoughts. Try to use words that have literal, rather than abstract, meanings, and never forget what the word actually means. Try to picture it, and ask yourself if the picture makes sense. David Gillespie, author of the book Charisma, describes Bill Clinton as ‘a man who does exactly what it says on the tin!’; a horribly wonderful blend of mixed metaphor and cliché. Just try to picture it.

4. Write simple sentences

Keep your sentences short and simple, but not so short that they become staccato. Keep the verb close to its subject, and always use a short word instead of a long one. When you come to cut your piece, as you almost certainly will, delete as many adjectives and adverbs as you can, starting with ‘ongoing’.

5. Use strong, active verbs

Verbs are the engine of language. Nouns are the cargo; adjectives and adverbs the packaging. If you overload your prose with heavy nouns and drive them with weak verbs (‘to be’ is the weakest), then your writing will plod along like an old lady lugging twelve bags of shopping.

Compare the sporting cliché ‘it’s a must-win game’ with ‘we must win this game’. The second sentence is so dynamic it almost demands an exclamation mark. Why? Compare the verbs: ‘is’ versus ‘must win’. Now compare the subjects: ‘it’ versus ‘we’. By saying ‘we’, the second speaker is taking responsibility by focusing on himself and his team, while the first speaker is looking at the game: a distant, abstract thing. The first speaker has turned the important thing – ‘must win’ – into a feeble adjective. The second speaker has made it the main verb.

Above all, let your own personality come through.

For more on how to write reports that yield real results, take our one-day Business report writing course.

To learn more about making writing annual reports a much easier and less painful task, check out our free webinar recording How to turn your expert analysis into exceptional reports. It’s ideal if you have to write reports to colleagues and clients as part of your day-to-day job – whether that’s as a traditional written report or as a slide deck.