Going global with annual reports.

As a result of the fast-approaching European single market in 1992, the world is becoming a smaller place. This is particularly the case in Europe. As the final details are put into place for a United Europe, I wonder how the product of my existence -- the annual report -- will be affected. It is often a difficult document to understand in English, let alone in additional languages such as French, Italian or German! What exactly will happen to printed corporate communication?

As a united Europe competes with North America and Asia, the annual report will become much more of a global document. It will need to have a much broader perspective. Annual reports in the US and Europe are already sharing globalization as a part of theme reporting. We'll see much more in the way of global reporting after 1992. This will be crucial as corporation jockey for position in Europe and Asia. We're going to see some real changes in the annual report as we know it today.

For example:

Two-Part Annual Reports

Many communicators are already asking the question: Would I get more mileage out of a two-part annual report? It's not an easy question to answer. The idea makes sense. One part is the true annual report (letters and numbers); the other part is really a capabilities brochure that markets the company, maybe on a worldwide scale.

But such an idea should be approached with caution and careful consideration. Time and money are required as well as hard work to make this approach truly successful. Corporate communicators need to go into production thinking carefully about the basics of the document, its audience, life span, language, theme, editorial. This kind of planning is crucial to the two-part report. Allow at least a year's lead time to make the capabilities part work to the fullest.

Also bear in mind that it's usually more expensive to produce a two-part annual report. More often than not, the capabilities portion needs to be global in scope and produced in several languages. This not only costs more but, as mentioned, also takes more time to produce. However, given the extended shelf life of the document of three years or more, this approach can be highly cost effective over the long run.

With some corporations, the two-part annual can be a natural step. For example, if a company is listed in foreign exchanges such as the Japanese or French, producing the two-part report in the other languages enables the company to meet the need of that country's requirements for the annual report and at the same time deliver a capabilities brochure for that local market. Usually the office receiving reports in the local language shares the costs.

Multi-language Reports

As mentioned earlier, we're going to see more multi-language reports, whether these appear in a single version or a two-part report. I predict that after 1992 we will see a significant increase in multi-language reports as corporations reach into new market areas.

In a survey taken more than a year ago it was discovered that the recipient of a multi-language report in his or her local environment will actually use the report on a day-to-day basis. This is compared to a recipient receiving an English-language report, in let's say, Japan, where the recipient is more likely to shelve the document once he or she has read it. As Martin Roberts, president of Linguistic Systems Inc. of Cambridge, Mass., points out, a multi-language version "not only offers easy access to the information, it also sends a message of respect and thoughtfulness that will set the stage for successful negotiation."

Usually these local language reports are produced in limited quantities (1,000 up to 5,000). A competent designer will design the English version to fit other languages without altering the picture layout. This combined graphic and linguistic expertise is crucial because foreign versions can run as much as 20 percent longer for text and sometimes two or three times longer for individual phrases, according to Roberts. The English version can be printed first, and with proper planning it is possible to distribute three or four in different language versions within two months. The cost for the language conversion runs about US $5,000 per language, not including printing costs, says Roberts.

The distinction between translation and camera-ready typesetting, or language conversion, is important. Says Roberts: "The typesetting should also follow local foreign conventions. The finished product should appear as natural to the foreign reader as the design permits. For example, it helps if the page size is metric (A4) rather than in inches (8-1/2 x 11)."

In some situations, this conversion can even be done at another location, let's say Japan for the Japanese version. The designer or client may commission a specialist. I recommend such specialists. Too often the client will try to convert the language at home and mistakes occur and the flavor of the translation is lost.

Dual Financial Reports

Some corporation are now toying with producing full financials in English as well as in second currency. This is easier said than done. It's difficult enough to produce a financial sectionn in one language. One of the problems is the convkersion rate; another is gathering information quickly enough to produce the financials on time. Roberts recommends leaving the figures in dollar denominations because "significant currency conversion changes may lead to misinterpretation despite a footnote that states the conversion's ration basis." Roberts also stresses that it is necessary to be aware that accounting standards are different from country to country and that careful attention to terminology is critical.

The computer helps quite a bit but we're still far from producing a dual financial report effectively, although there will be immnese pressure on the dual report idea after 1992. I suggest you try dual financial highlights to start.

Editorial

As the far-reaching effects of 1992 emerge, corporations will need to begin talking globally from cover to cover. US companies will require more assertive and effective corporate communication programs to take advantage of the growth in worldwide markets after 1992. We recommend that companies that have complex structures or technical products use a glossary of terms. Also, if a company has worldwide operations, it is essential to include a map enabling the reader, regardless of language, to have a visual understanding of who the company is and where it operates. It is increasingly important to demonstrate the ability to play outside of one's own back yard.

The annual report, I predict, will become more balanced about its reporting on global operations. Up to now too many companies separate the international aspect of their business. Often only a photograph is used to attempt to show a company is indeed international. The fact that US companies are starting to produce multi-language reports suggests that there is already a strong move in this direction.

The shift is strategic global thinking is critical to the future of corporate communication. This approach should begin with the chief executive's letter and follow through to the operations review and, if it's used, to the theme section. A strategic emphasis rather than an operational one will serve you better in creating a world-class report. Don't be afraid to choose a theme approach. The theme should be narrow enough to provide focus for the report, yet still allow enough breadth to convey an accurate portrayal of the company's unique corporate culture, whether it be cutting edge, conservative, or somewhere in between. Carry the theme through in every aspect of the report -- design, illustration, copy and photography.

To prepare for the impact of 1992 on North American companies and their annual reports, corporate communication professional should consider the options available to them: The two-part annual report can increase the marketing potential of the report; multi-language reports and dual financial highlights not only convey hard information in an accessible way to new audiences, but also demonstrate a certain level of sophistication on the part of the company. Finally, more strategic global thinking throughout the report will reinforce your message from cover to cover.

These are just a few ideas on what I think will happen after 1992. If you plan ahead, you'll save money and produce a more effective annual report in the end.

Michael Watras is group president and CEO of Corporate Graphics, Inc., New York, N.Y.