In the securities business, if a customer refutes a stock trade, they can come back to the stockbroker and claim they Don’t Know “DK” and the broker has to eat the trade. DKs famously annihilate trust. Don’t DK a potential investor! DKs are penalty points in building trust!
When I was in a military academy, we were taught to answer: “I don’t know Sir, but I will find out for you!” Since you can’t know everything on the spot, here are some preparation tricks to avoid DKs.
– Maintain a list of industry resources. If you get asked a technical question, offer the document and any insights that you have on identifying the answer.
– Be confident. When you are looking in to the future, there is only so much certainty you can have. Be confident on your current plans and convey points that you are confident about today. Prepare yourself to answer forward-looking questions with a modifier like “Here’s what we know today….”
– Avoid taking meetings alone. Even if you have to conference someone in, it is best to have the safety net of another point of view when answering questions.
– Do not provide openings to the unknown in your presentation. And never let a slide be smarter than you! If something can be left unsaid during an initial meeting, let it be. Hit the highpoints at initial meetings, as these are essentially get-to-know-you sessions. Keep your slides simple. Technical slides are prime opportunities for you to drop several DKs.
– Listen closely to the question and don’t be afraid to ask the person to repeat the question or frame it in a different way. This sounds simple, but I have seen very intelligent and seasoned executives botch this. I have witnessed executives give answers to questions they THOUGHT they had heard. And 99% of the time, the answer to the real question would have been easier. Don’t drop a DK on a question that was not asked!
– Practice. My team works extensively with executives to prepare them for roadshows. When management teams truly understand the value of this exercise, I find the best learning moments are via the role of an antagonizer – that person that inevitably asks all of the tough (and sometimes offensive) questions. My career has been spent in many meetings with Wall St analysts and portfolio managers. The stereotypical Wall St investors do not care much about being polite – they like to throw curveballs and antagonize executives with tough questions. Why? Because the savvy investors have found that they like to see how executives conduct themselves under pressure. An executive’s reaction to antagonizing questions can be more indicative of success over the business opportunity at hand. So find someone you trust and get them to ask you all of the tough questions. Practice your answers. List all of the things that could “throw you off” and have a plan to get through all presentations without dropping a DK with a panicked and irritated look!
Patrick E. Donohue, CFA