Buzzword of the Week: Talking in Circles
For most people, circling the wagons harks back to the days of the Wild West, when settlers would arrange their buckboards and Conestogas in a circle to create a defensive corral. Also known as a "wagon fort," the technique was famously deployed in the "Wagon Box Fight," a battle that took place in 1867, near Wyoming's Fort Phil Kearny. According to historians, a small group of soldiers and settlers took refuge inside a ring of circled wagons, from which they shot at hundreds of attacking Indians.
The combination of breech-loading rifles and the defensive wall protected the settlers and soldiers, who suffered only three deaths. By comparison, the attackers lost between 50 and 60 men and had an estimated 120 wounded.
An Old Technique
In truth, circling the wagons actually dates to an era long before America's pioneer days. With a history stretching back at least 2,000 years, it has been adopted by dozens of armies, including medieval Russians, South Africans, Poles, Lithuanians, Czechs and the ancient Chinese. For Americans, however, the phrase provides an especially powerful link to our pioneer heritage, evoking the image of brave settlers gathering together to protect themselves against a hostile world.
Historically, circling the wagons has proven to be a strong defensive technique, but when used as boardroom rhetoric, it often suggests a last-ditch battle with small hope of victory. For example, when Art Cashin, director of floor operations for UBS (UBS), told CNBC that "later in the week, the bulls are going to circle the wagons," he was explaining a desperate attempt to push the recovering S&P 500 to 1,333. For that matter, the Toronto Globe and Mail article headlined Obama, Republicans circle the wagons against economic reality played up the hopeless aspect of wagon circling, suggesting that America's politicians were somewhat delusional about the economic realities.
Sometimes, circling the wagons even has apocalyptic undertones, as in the case of a recent article on Ron Paul's website that warned readers that it's Time to Circle the Wagons! The somewhat overblown post instructed the Paulites (Paulians? Paulists? Paulpers?) to gather a "patriot circle" of friends to help them in case of emergencies. These local "wheels" would then connect to other local cells, yielding "wheels within wheels," a national network of Ron Paul supporters who are prepared for any eventuality.
If Paul's take on wagon-circling isn't disturbing enough, the Norwegian speed-metal band Darkthrone used the phrase as a title for their 14th album. While few things are more bleak than Paul's prognostications on America's future, Norwegian speed metal is probably among them.
Running in Circles
When it comes to business jargon, wagons aren't the only things that go in circles. Boardrooms also have been known to "circle back" to rediscuss various topics. This especially shows up in earnings calls, when a veritable parade of institutional investors ask CEOs to circle back to topics with such regularity that the transcripts begin to resemble Arthur Murray dance diagrams. In a recent Altria earnings call (MO), a Citigroup (C) analyst used the phrase, and on a recent Canadian Pacific Railway call (CP), Executive Officer Janet Weiss deployed it. Just within the last month, other investors have pulled "circle back" out of the bag on American Capital (ACAS), Booz Allen (BAH) and Richelieu Hardware (RCH) calls.
But executives and board members aren't the only ones who love to circle back. The phrase is a particular favorite of Jim Cramer, who seems to enjoy circling back at least once in every article, episode or pronouncement. For that matter, it's popular with financial reporters generally, and often shows up on Money Watch, The Big Picture and The Motley Fool, among others.
While this notion of circling back suggests thoroughness, the phrase also has a darker connotation. As the Urban Dictionary notes, it can be "An action phrase used by clueless management and consultants to end a conversation because they're afraid of committing to a course of action." While somewhat harsh, this definition also carries a fair amount of truth, as the phrase is often employed as the boardroom equivalent of a parental "we'll talk about this later."
Strong Circles -- and Weak Ones
In this context, circling back is one of those rare phrases whose meaning does a 180-degree shift depending upon who's using it. Issued from the mouth of a concerned investor or board member, it translates into a demand for further information about a topic that has been insufficiently covered. When an executive says it, it often means that a topic has been closed for discussion and is effectively dead.
Whether one is talking about karma or agriculture, a weak link or an impenetrable wall, circles are strong metaphors. For corporate big wheels reaching for the brass ring of company loyalty, they can be a great way of suggesting the strength of a community or the comprehensiveness of a discussion.
Yet for all their rhetorical strength, circles can also be vague, and whether one is hoping to talk circles around an opponent or draw together a circle of supporters, it's worth remembering that, in the boardroom at least, a vague turn of phrase can easily unleash a vicious circle of confusion and anger.