By Noah Buhayar – Originally published on Bloomberg.com
Liam McGee has a special way to emphasize his commitment to creating value at the 203-year-old company he runs, Hartford Financial Services Group Inc. (HIG)
“Our team is laser-focused on execution,” he said on a March 2012 conference call, laying out plans to divest units and halt some annuity sales. It was one of at least six events in the past two years when McGee used the language of technology to describe the insurer’s ability to aim its attention.
Liam McGee, chief executive officer of Hartford Financial Services Group Inc. Photographer: Jonathan Fickies/Bloomberg
He’s not alone. From children’s book publishers to organic-food purveyors, chief executive officers are increasingly beaming light on their targets. The phrase “laser-focused” appeared in more than 240 transcripts of earnings calls and investor events compiled by Bloomberg this year, a pace that eclipses the 287 in all of 2012.
“It’s business jargon,” said L.J. Rittenhouse, CEO of Rittenhouse Rankings Inc., which works with companies to better execute strategies through communication. “What would a more candid disclosure be? ‘We are focused.’ What does a laser have to do with it?”
Rittenhouse, who studies shareholder letters for a report on CEO candor and reviews about 100 conference-call transcripts each year, said she first noticed the phrase about a decade ago. She lumps it into a category with expressions such as “pursuing strategic initiatives towards sustainable profitability” and “translating actionable insights into consumer-focused initiatives.”
Some of the uses match a company’s image of precision and technological prowess. Take Apple Inc. (AAPL) CEO Tim Cook’s message in a July press release announcing quarterly earnings at the maker of the iPhone and iPad: “We are laser-focused and working hard on some amazing new products.”
Others may seem more of a stretch. Richard Robinson, CEO of children’s book publisher Scholastic Corp. (SCHL), in July explained efforts to help school districts prepare teachers and assemble their book collections while aiding struggling students: “We are laser-focused on capitalizing on the significant opportunities, the changing buying behavior and new needs in the classroom.”
The CEO was highlighting the increased use of Scholastic’s digital programs, said Kyle Good, a spokeswoman for the company. “Everyone at Scholastic IS laser-focused on getting these programs and learning materials into the hands of more students and teachers nationwide because there is a tremendous need to help raise student achievement,” she wrote in an e-mail.
John Foraker, CEO of organic macaroni-and-cheese maker Annie’s Inc. (BNNY), told investors last month that his company is “laser-focused on executing at a high level through the remainder of this fiscal year in order to achieve against our short and long-term strategic objectives.”
CEOs have powered up their lasers amid pressure from hedge funds. Hartford’s McGee did so after John Paulson urged him last year to “do something drastic” to boost returns. Investors David Einhorn and Carl Icahn called on Apple’s Cook to return cash to shareholders this year amid a slumping stock price.
Bob McDonald said his company, Procter & Gamble Co., was “focused like a laser” on productivity and innovation in October, months after activist investor Bill Ackman took a $1.8 billion stake. The maker of Tide detergent and Pampers diapers brought back former CEO A.G. Lafley in May to rekindle growth.
Lafley told investors at a conference last week that P&G has a “laser focus on value creation.”
Paul Fox, a spokesman for P&G, declined to comment, as did a representative for Annie’s. Apple didn’t respond to a request for comment. Hartford’s Shannon LaPierre said McGee’s use of the phrase coincided with efforts to focus its business and that he hadn’t used it in a couple of quarters.
Workplace jargon has long been a target for language police. Bryan A. Garner, who writes about English usage and style, said in a Harvard Business Review blog post in March that “you want to sound like a person, not an institution.” He suggested avoiding terms such as “core competency,” “operationalize” and “strategic alliance.”
Google Inc. (GOOG) even called out office clichés last year, advertising software that could translate business speak into plain English. The “Jargon-Bot” turned out to be a hoax, part of the search-engine company’s April Fool’s Day prank.
Managers probably evoke lasers because of their precision in emitting beams of light. They have found a range of applications since the 1960s, from surgery to bomb-guidance.
The first time an executive used “laser-focused” on a call, “it was clever and innovative,” said Rittenhouse, whose book “Investing Between the Lines” teaches how to separate fact from fluff in company communications. Avoiding tired language matters when talking to shareholders, she said.
Rittenhouse’s research has found that, on average, companies that use “fact-deficient, obfuscating generalities,” or FOG, have worse share performance than more candid companies.
Hedge funds and other investors are increasingly turning to linguistic analyses to get an edge, said David Larcker, a professor at the Stanford Graduate School of Business who has studied deception on investor conference calls. When executives “start using a lot of jargon, it makes you wonder about the believability,” he said.
One manager who has avoided the phrase “laser-focused” is John Ambroseo, CEO of Coherent Inc. (COHR) When asked in July whether competitors were cutting prices as his company entered a new market, he said, “We’re very focused on a select set of customers. We’re not trying to sell to everyone, everywhere.” Coherent’s product: lasers.
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