This article, which includes comments from Virgil Scudder on executive communication, appeared on the first page of the Business Section in the New York Times on Wednesday, November 9th, 2005. The article also appeared in the International Herald Tribune.

Henny Ray Abrams/Reuters
James Dimon of J. P. Morgan Chase stirred
investor concern with his casual talk of a merger.

On an investor conference call last month, James Dimon, the chief executive-designate at J. P. Morgan Chase, was asked about his plans for a potential merger.

For Mr. Dimon, a Wall Street celebrity whose career has been defined by big,
showy deals, such a question could not have come as a surprise.

But instead of a clear answer, Mr. Dimon's meandering response bordered on the
unintelligible. Citing criteria like price, business logic and capability, Mr.
Dimon sought to sum it all up for the many investors and analysts listening in.

"Forgetting the business logic and the price, there will be options down the
road there, I would answer your question about capable and that we weren't
really quite capable yet because our army was doing all the other stuff we had
to do, particularly the systems conversions," he said, according to a
transcript. "The army will be capable to do other stuff sometime next year,
which is reasonable. Doesn't mean we will."

Confused? Here's a translation: We are not ready to do a deal yet.

More than ever, investors are holding chief executives accountable for their
public utterances and their ability to articulate a clear and compelling
vision.

A gaffe, a garbled sentence or a muddied articulation of a corporate strategy
can not only mar the public profile of a chief executive but also prompt a run
on the stock.

In today's era of Regulation FD - the securities rule that obligates a chief
executive to make public all material information - the quarterly investor
call, usually seen on the Internet, has assumed the gravity of a White House
news conference.

As a result, those calls have become tightly scripted affairs, with chief
executives being prepped and briefed by a cadre of inside and outside advisers.

Still, despite the advance work that borders on the presidential, getting
garrulous, strong-willed chief executives to stay on message and provide lucid
responses remains a work in progress.

"You ought to be able to state your plan in a few succinct sentences," said
Virgil Scudder, a consultant who has spent more than 25 years training chief
executives in how to communicate publicly. "Chief executives see these things
as a test of their knowledge. Knowledge is essential, but it's the ability to
communicate this knowledge that separates the winners from the losers."

In the case of Mr. Dimon, his fractured response followed an off-the-cuff
comment he made in a conference call in the summer, during which he suggested,
perhaps a bit too directly, that the bank might enter a merger early next year.

For investors already fed up with the laggardly performance of J. P. Morgan's
stock, the prospect of Mr. Dimon's embarking on another deal was a bitter pill
to swallow and the stock sold off in the weeks after the call. (It has
recovered recently, driven by a strong earnings report for the third quarter.)

There have been other examples, too. On a conference call in July, Raymond A.
Mason, the chief executive of Legg Mason, was asked about the cost savings to
be had from Legg's acquisition of Citigroup's asset management division.

In previous calls and on roadshows, Mr. Mason had spoken optimistically about as
much as $80 million in savings from the deal. Asked to expound, he did, but in a
manner that raised more questions than it answered.

"I'll try to answer you, but you can't put a lot of faith in what I'm going to
say," Mr. Mason said, according to a transcript of the call. "I know in one
meeting I said if we look at this a year from now it will be clear, or should
be clear, you know, what is and what we can do and what's attainable and how
quickly, and I still think that's true. God knows, I would hope that's true."

The stock, which had surged in the wake of Mr. Mason's ambitious deal, quickly
sold off, sinking 8 percent that day as investors took Mr. Mason's
less-than-coherent response as a signal that he was backing off from the
savings estimates.

Both Mr. Dimon and Mr. Mason declined to comment for this article. And, recent
conference calls notwithstanding, the public standing of both men remains at a
high level.

Still, there have been better-known instances when a failed performance by a
chief executive in public had severe consequences. In 2001, Jeffrey K.
Skilling, then the chief executive of Enron, lashed out with an expletive at a
money manager asking a tough question.

More recently, this spring, Philip J. Purcell, then the chief executive of
Morgan Stanley, gave an uninspiring performance at a UBS investor conference
during the battle over his leadership at the firm.

Within months of their presentations, both men had stepped down from their
positions.

"I think that C.E.O.'s have to take these communications seriously," said George
McGrath, a partner at McGrath Matter, a public relations firm. "This information
is out there instantly, so it puts a premium on being cogent and prepared for
these calls."

No one expects chief executives to achieve Churchillian heights of oratory.
Unlike politicians, most executives have spent their careers outside the public
eye, either manning trading desks or running large operational divisions before
ascending to the top rung.

As a consequence, their speech can become heavily inflected with business
jargon, with the focus on getting immediate results as opposed to articulating
a broad strategy. Thrust into the limelight, where every word that they speak
is parsed by analysts and regulators, the executives often find the transition
jarring.

Mr. Scudder cites inadequate preparation as the primary cause for communication
blunders. Two years ago, a medium-size real estate development company came to
him and complained that the chief executive had credibility problems with
analysts and that the situation was affecting the company's stock price.

After analyzing many hours of conference calls, Mr. Scudder toned down his
client's tendency to wax optimistic and helped prepare a shorter, more focused
opening statement during calls.

He also took steps to improve his client's performance during the
question-and-answer period by preparing potential questions from analysts and
putting the chief executive through a grueling practice session the day before
the conference call.

For Mr. Scudder, the emphasis remains on locution and straightforward answers to
all questions.

"Clear language is critical," he said. "And it kills me when they say, " 'I
don't know, that's your job!' "

Copyright 2005 The New York Times