Motive Imagery And Corporate Success Considerations 10.16.2008

10.16.2008 Motive Imagery and Corporate Success Key Thoughts and Considerations I’ve been doing a lot of thinking about the fact that incorporated into this study aren’t just the numbers that we’re trying to dig up, either financial or motive imagery related, but rather the percent change (Δ) of those numbers over time. That made me think about what Δ really meant. Δ is like an inflection point. It tries to describe in numbers some sort of direction something is heading. In our context, if people see that companies are consistently growing by 50%, 60% every year, then don’t they feel confident in where the company is heading? Maybe not confident, but at least can see where a company is heading. This could be an interesting argument if we find any association between any one of the motive imagery’s and the various metrics that we are evaluating. It speaks volumes about the impact of leadership. This is because I have kept all of the CEO’s or Chairmen (whoever wrote the Letter to the Shareholder) consistent over the 3 year period that we are studying. If we find some sort of association, we can therefore also make a pretty strong argument about how having consistent leadership is key. However, I guess I didn’t sample those companies that changed their leadership, so it will be impossible to compare metrics. Anyway, let me get to the heart of the matter. The fun thing about Δ is that it can be manipulated in so many different ways. You can virtually extract it out of any two numbers in the universe. So, I have taken a look at all of the possibilities in which I can get Δ for the time period encompassing 2004, 2005, and 2006: As you can see, there are three different percentage possibilities that you can get out of the combinations 2004, 2005, and 2006. Of these three possibilities two of the instances account for a period in time of one year in length (Δ0405 & Δ0506). The other time period (Δ0406) evaluates the time period over two years in length. This is excellent news. In trying to predict for the impact of motive imagery on corporate success, due to the fact that there is no precedent, I am unsure as to the time length in which one measure will impact another. I can speculate right off the top in our case that it ought to be one year, because an Annual Report typically comes out annually and contains within it a new statement from the CEO with a new set of motive imagery’s. However, why is this the case? The beauty that lies within the Δ0406 is that it doesn’t assume this necessarily confined time period. Often times, CEOs will talk about a lot of future or forward-looking statements, so wouldn’t it make sense that their plans would only come to fruition in some time to come, maybe up to two years.

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10.16.2008 This would tell me then that the impacts of motive imagery take a long time to take affect. But then I started to think about how much time passes between the “utterance” of the Letter to the Shareholder and potentially two years down the line. Within that time, there are just an incomprehensible amount of words that the human can hear. I was so curious that I searched on Google, “how many words does a person hear every day.” Unfortunately, there were no results that answered the question directly. As I typically do, I went to Yahoo! Answers to ask the question with no answer on the Internet (if you know the answer please click on this link). So, there are so many opportunities for you to hear other words in a daily life, why is it that these words “uttered” in the Letter to the Shareholder could possibly be a predictor for future corporate actions? It’s almost preposterous that I’d propose such an idea. When you really think about it, there’s nothing that differentiates this “utterance” from any other “utterance” that occurs. Why is it any more special than any other document that a person would read or hear about a company? I think an interesting thing to study would be people’s perception of various documents and how highly they regard them. By asking people to rank various documents, probably between numbers 1 and 9, 9 being the most significant and 1 being the least significant, you can find out a lot about how people perceive various things that they reading. Things you read and listen to are very important as they inculcate us with ideas because we’re humans are by nature very impressionable. How does somebody view what they read in the Newspaper versus a Textbook versus a Book versus a Magazine versus a Financial Report versus an Instruction Manual etc. etc. You can do this for two separate samples of people. Regular people out in the street, and people who work for a company. You can frame the initial question you ask people in two different ways. First, you can say: Please rank these documents in terms of importance. That is one way of asking. The second way could be: Please rank these documents in terms of significance in a corporate setting. I think you would be surprised to see that many people hold the Annual Report of a company in high regard, and contained within that Annual Report is obviously the Letter to the Shareholder. This indicates to me that even thought people hear so much and have the chance to hear so many things at all different times, there are instances in which we listen more closely or a little more deeply. We obviously can’t be a slave to all of our stimuli at all given times. In order to measure if people were actually listening deeper than usual, a good method would be to make take some brain scans. Your thoughts are welcome.

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