Communications - June 2012

courses, videos, and books to teach this valuable skill. A typical checklist appeared in an article by Pincus4:

˲ Know your purpose

˲ Know your target

˲ Focus on your customer

˲ Be authentic

˲ Be specific

˲ Be prepared

˲ Be concise

˲ Solve a problem

˲ Show your passion

˲ Practice
There is even a Web site that offers
10,000 examples of elevator pitches in
case you have a mental block (http://
www.speech-topics-help.com). The
quintessential pitches stick in listen-
ers’ minds. 2 Public speaking organi-
zations such as Toastmasters have
offered practice sessions for elevator
pitches for many years.

Do elevator Pitches Really Make A Difference?

The advice to prepare an elevator pitch is commonly presumed to be valuable for many professionals, including project managers, sales engineers, visionaries, and policy makers. Entrepreneurs preparing to pitch to venture capitalists are often sternly warned to have a great pitch because, it is said, the VCs judge the quality of the idea and the team by the quality of the pitch.

With all this enthusiasm, you might be surprised to learn that most elevator pitches do not lead to the final outcomes sought by their speakers. For example, innovators use pitches but suffer a failure rate of about 96%. 1 It is like the lottery—your pitch is almost certain to be a losing ticket, but you buy it because it is cheap and there is a

A successful
pitch induces
the listener to make
a decision sought
by the speaker.
The elevator pitch
has been enshrined
in mythology that
greatly inflates its
importance and
promises an outcome
it cannot deliver.

chance that your 30-second pitch could change everything.

While there have been no rigorous studies of pitch outcomes, there have been several studies about the influence of business plans, on which many pitches are based. If the business plan makes a big difference to investor decisions, then there is a reasonable chance that its synopsis (the elevator pitch) might have a big impact too.

However, until recently most of the studies of business plans were plagued with issues such as small and unrepresentative samples and weak statistical methodologies, which led to unreliable and contradictory claims about whether business plans affect investor choices.

Finally, in 2009, two Stanford-trained economic historians published a definitive study that looked carefully at the whether business plans actually convey any information to VCs. 3 This study was a breakthrough because it used a much larger sample (762 plans) than used in previous studies, the plans were representative of those typically screened by VCs, and the study used rigorous statistical methods to achieve its results.

The authors unequivocally ruled
out the idea that business plans com-
municate anything to VCs: “We find
that neither the presence of business
planning documents nor their con-
tent serve a communicative role for
venture capitalists…[O]ur findings
are consistent with the view held by
VC practitioners who dismiss efforts
to systematically evaluate the role of
business planning documents.”
In other words, VC investors do
not—perhaps cannot—infer much
about likely success from business
plans, let alone their elevator cousins.

The Bigger Picture

In escaping a myth, we want to preserve its nugget of truth while defining new and more effective actions. To do this, we must step back and look at the bigger picture.

The desired outcome of a project is to produce a result—for example, a system or product—that brings value to a group of customers; they adopt it as part of their practice.

The innovation process producing this outcome has many pieces. One summary of the pieces is the Eight Practices framework. 1 The first five practices—sensing, envisioning, offering, adopting, and sustaining—are the main elements of the process. The last three—executing, leading, embodying—create an environment of success for the first five.

At first glance, it appears that the elevator pitch is a component of the envisioning practice. The purpose of that practice is to tell a compelling story (a “vision”) of how the world would be if the innovation idea were incorporated into it. The story makes it obvious what problem is solved and why the innovation proposal is likely to solve it. The elevator pitch might appear to be a précis of this story. And another business construct, the motto, may seem like a précis of the elevator pitch. Thus we have a hierarchy: envisioning story; elevator pitch; and motto.

Here are two examples:

˲ The John Deere Company has a vision about farm machines improving productivity by factors of 10 or more. In their pitch, they envision a line of tractors and tools that perform impeccably and never wear out, so that farmers get the most out of their investment. They ask their investors to join them in making this happen. They summarize their vision with the motto, “Nothing runs like a Deere.”