Archive for the ‘Career development’ Category

‘Key to success … is preparation’

June 2, 2014

AlaixJuan Ramón Alaix, CEO of the animal health giant Zoetis Inc. (formerly Pfizer Animal Health, spun off as a NYSE-listed company last year), offers wise counsel on communicating effectively with investors.

In a “How I Did It” CEO interview in the June 2014 issue of Harvard Business Review, Mr. Alaix comments:

A lot of people, when they reach a certain age, are reluctant to accept training. That’s not true for me—I’m very open to it. I’d had communication training over my career, but the preparation for our IPO was much more intensive. Before I did my first TV interview, for instance, I probably spent more than eight hours doing mock interviews. I believe that the key to success in communication is preparation. By the time I gave the first road-show pitch to investors, I’d rehearsed it at least 40 times.

Wonderful words from a CEO! As IR professionals, most of us have had the opposite experience: an exec who is too busy to practice and thinks it’s OK to wing it because, after all, who knows the story better?

Ask the people who listen to investor presentations: The CEO, CFO or IRO who is practiced and prepared will always have a greater impact than the one who fumbles with his thoughts – or just reads the script.

It’s good to hear Mr. Alaix endorse the most basic rule of speech making: rehearse, rehearse, rehearse! I’m sure Zoetis is well-served in its communications – and other areas – by this kind of diligence.

© 2014 Johnson Strategic Communications Inc.

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Deadlines in IR – and thoughts on coping

August 3, 2011

Often the investor relations job revolves around corporate news, and sometimes timelines get compressed so we must get it out quickly. This kind of breaking news puts the IR professional on deadline – a short deadline. This morning, for example, a client got in touch just after 7:00 and asked me to write a news release on a transaction – and make it fast so the execs negotiating the deal could show a draft to the other company today.

Mentally this took me back to my time in the daily newspaper business. In the news biz, deadlines must be part of your DNA. Not faraway deadlines like, “We have to do an annual report on 2011 and drop it in the mail by March 23 of next year.”

Real deadlines get your heart beating and adrenaline flowing. These deadlines are measured in minutes rather than days or weeks. The feeling returns:

Something blows up, a plane crashes, the mayor resigns unexpectedly. Suddenly you’re hunkered over a keyboard, the City Editor looking over your shoulder. “Give it to me in takes,” he says. Takes are scraps of two or three paragraphs that an editor can mark up and send to be typeset.

To meet a very short deadline, you have to move copy fast. “We’ll hold the presses for this,” the City Editor’s boss says … a costly move, only for an extraordinary news event. We have to get this into the papers to go on the trucks and be thrown on people’s driveways (or nowadays, we rush to beat the competition in posting the story to the Web).

So you think fast and write fast. Tick, tick, tick. You must get that news out, but of course even more importantly you must get it right.

Since I’ve calmed down now from my morning deadline, I’ll share a few thoughts about deadlines and how we as IR professionals can cope with them:

  • Plan your approach. When you get a short-notice assignment, spend the first few moments jotting an outline of key messages, a short list of resources you need, a rough work plan to guide your use of time.
  • Clear your mind. Take a few breaths or get a cup of coffee before diving in.
  • Assess your progress. Once you’ve made some headway, make a printout and read it over to see what works – and what’s still missing.
  • When it’s done, check it. If you’re working fast, the need is greater than ever to proofread what you write – better yet, get a reality check from colleagues.
  • Practice stress management. Really, this is about lifestyle. Many IR people would benefit from taking time off, staying in better shape, eating better – all of those healthy tips that can best be implemented when you’re not on deadline.

What do you think? Any secrets or tips for coping with deadline pressures in IR?

© 2011 Johnson Strategic Communications Inc.

Want respect? Get strategic!

June 14, 2011

To gain a seat at the table with senior management, investor relations people must talk their way into helping their companies formulate strategy, George Barrett, chairman and CEO of Cardinal Health, told several hundred IROs today in a keynote address at the 2011 NIRI Annual Conference in Orlando.

“I really do feel that you’ve got to be a part of the strategy process. It’s very difficult for you to just be a voice for it. You need to feel it in your bones,” Barrett said. He urged IROs to “assert yourself,” perhaps by suggesting to the CEO that you can better communicate strategy if you sit in on the team formulating it.

“I view IR as an extension of my ears and my eyes, and this requires strategic fluency,” said Barrett, who joined Cardinal in 2008. “Investor relations must serve as a strategic partner, not just a voice to the Street.”

Barrett said he looks to Cardinal IRO and Senior VP Sally Curley to frame the context for company strategy, convey investors’ perspectives internally to management, and help separate the noise in the market from what’s important to the company.

One question some investors love to ask is “What keeps you up at night?” As CEO of a multifaceted $99 billion healthcare company that distributes pharmaceuticals, medical equipment and other products, Barrett tells it straight …

Here’s the real answer: pretty much everything.

And that’s true of a good IRO, as well.

© 2011 Johnson Strategic Communications Inc.

Raising your profile as an IRO

June 10, 2011

Gaining access to the C-suite is critical for investor relations professionals, both to know what we need to know about the company for effective communication with investors – and to build personal success in our own careers – according to NIRI‘s June/July 2011 issue of IR Update.

The tips and ideas on raising your professional profile apply equally to IROs working in-house and consultants helping from the outside. Pick up your copy from NIRI and read “How Suite It is” (so far, the piece hasn’t appeared online).

Three qualities stand out to me among the several offered as keys to the C-suite:

Contribution. Several IROs and other execs say the key to gaining access to the corner office is to contribute to the business – in more than one way. Beyond doing your IR job well (which is fundamental), get involved with people and projects across various functions that are building value for the company.

Ruth Cotter, VP of IR for Advanced Micro Devices, urges IROs to be proactive:

At that level within the corporate world, they’re not looking for people waiting to be asked to do something. … Look beyond investor relations to garner the attention of your CEO and CFO.

Taking on a formal role in corporate strategy, business development or finance may be a remote aspiration for IROs in large, hierarchical companies. But look around. Often an IR person can informally volunteer to help people in other functions or serve on project teams that reach further into the business. Word gets around, and management recognizes contributions.

Courage. Jeff Henderson, CFO of Cardinal Health, says IR people can earn respect from their CFOs and CEOs by displaying the courage of their convictions:

Perhaps more than most positions in the organization, the IRO must have a certain level of courage – the courage to disagree with senior leaders and challenge their thinking and to say no to constituents at the appropriate time.

IR people can be confident in bringing investors’ feedback to management -after all, saying what will or won’t fly with the owners ought to carry some weight. In addition, the IR professional often brings counsel based on experience and training in communication skills more specific to IR than to the CEO or CFO’s backgrounds.

Credibility. This one, admittedly, is circular. IROs need access to the corner office to build credibility with investors. And IROs need to earn respect among investors to be credible with CEOs and CFOs – because word gets back on how IR is doing.

Charles Strauzer, an independent small cap analyst, suggests IROs have a heart-to-heart talk with their CEOs if they’re not getting ample access. If an IR person has to say “I don’t know” too often, he says, the IRO loses credibility:

Credibility comes from IROs’ access and their willingness to communicate. If they can’t get the access and information, they can’t communicate, and they won’t get the credibility.

A little self-evaluation is a good thing for the IR professional. Do I contribute to the business? Do I have the courage to speak my convictions? Have I built credibility with my main stakeholders, internally and externally? How can I get there?

Recently I heard an institutional investor ask a CEO on a conference call for a self-evaluation of his performance after one year on the job. Then the investor asked the Chairman for his assessment of the CEO and his team. An interesting – and positive – discussion ensued.

Comparing where we are today with where we need to be is how we grow.

© 2011 Johnson Strategic Communications Inc.

IR is still about the long term

May 12, 2011

Among several bits of wisdom shared by Jane McCahon last night at a NIRI Kansas City meeting is the idea that investor relations, at its core, still has the mission of building a base of long-term investors who believe in your company and its future.

McCahon is VP of corporate relations for Chicago-based Telephone and Data Systems and its publicly traded subsidiary U.S. Cellular. She is a longtime IRO with experience in several industries and is a former chair of the NIRI national board.

Measuring the success of IR isn’t about this quarter, McCahon says. Success develops over several years as you develop a group of long-term investors who understand and support the company’s story.

You can do perception studies to evaluate how the relationships are going. But the ultimate measure will come in a moment, sometime in the future, when you need your shareholders – when management needs a critical proxy vote, support in an M&A situation or buy-in for a follow-on offering.

In that moment, if you’ve been doing your job well, you’ll approach those investors and the answer will come: “We’re with you.”

As for the near term, McCahon says, make an annual IR plan and put it into practice. Focus on what you can control or influence, not what you can’t change.

One IRO asked how you deal with high-frequency trading and the daily gyrations of stocks in today’s hyper-short-term market. McCahon’s advice:

You can’t. What’s your title? Investor relations – not trader relations. Yes, you have to be aware of what it is and be explaining these events to people. But there’s nothing you can do about it – move on.

McCahon says one of the best things an IR professional can do is spend 50% to 70% of your time focusing internally: educating management about investors’ feelings, preparing execs to meet with analysts and shareholders, coming up with Q&As and drilling managers, sharing the IR plan and managing internal expectations.

“What’s changed in IR?” someone asked. Well, this led to a big discussion about fax machines. Too many of us in the room remember when fax machines were the coolest new technology for rapid communication with the market. We punched in fax numbers and waited for it to send. Today, who still owns a fax machine?

McCahon suggests, though, that the heart of IR hasn’t changed: It’s finding and cultivating long-term investors for that moment in the future when you need them.

© 2011 Johnson Strategic Communications Inc.

Tough times? IR can shine

March 10, 2009

cole-3-10-09-kcThe Kansas City chapter of NIRI heard today from Derek Cole, an experienced investor relations pro and NIRI national board member who is Vice President-IR & Corporate Communications for ARCA biopharma Inc. in Denver. A sampling of Cole’s advice on “Winning IR in a Tough Economy”:

  • “Get out there” – despite the tough economy and market. The recession causes some CEOs to withdraw because they don’t feel comfortable with a negative macro picture and the difficulty of predicting where it’s headed, Cole says. Companies need to explain what they don’t know, as well as what they do, he says. And investors won’t expect a CEO or IRO to have crystal-ball answers that no one has. They’re looking for sound management and strategy amid this environment.

A bunker mentality creates a dual “opportunity”  for the IRO: First, you can be an advocate with the CEO and CFO to get out and meet with investors – build credibility and distinguish your company. And, second, as an IR person you can get out more yourself – if the CEO or CFO will send you, it’s a great time to develop your relationships with investors and analysts without taking their time. Stepping up at a difficult moment enhances your stature.

  • Be a strong advocate for good disclosure, including taking your hits when things go wrong. Cole told of a heated internal debate, in a former job, when a key clinical trial failed for a biotech company: Do we announce the trial failed, or come up with positives to gloss it over?

Telling it straight, Cole said, is how companies develop long-term credibility with investors and other constituencies. “If you’re correct in what you’re doing, you really should be willing to push your management team very hard to do the correct thing,” he said.

  • Be sure you’re targeting IR efforts to the appropriate investors. In the life cycle of companies, and through economic cycles, your mix of investors will change. You may know and love the manager of a giant mutual fund, but if you’re a microcap you won’t be appropriate for that manager’s portfolio – so meetings and communication could be wasted.

Cole says a database of institutions yielded 2,500 investors who have owned names in his company’s industry in the past 12 months. He and the CFO know the top 75 or so very well. But those aren’t necessarily the ones they should target right now – smaller funds by make a better fit – he says. The IRO brings expertise to decisions on where to focus efforts for maximum benefit.

  • From a career standpoint, a tough market can be a time to shine. Most IROs are probably getting more face time with CEOs, CFOs and boards right now – in a crummy market – than during easier times, Cole notes. It’s a time to be the center of information for those constituencies.

Create an “Ask and Read Hour,” Cole suggests. Set aside time to increase your expertise in critical areas. He suggests reading more about your industry, your market, how-to ideas for IR, your boss’s concerns (read magazines that the CFO or CEO draw upon). Also, ask questions that help you learn: What do your analysts or investors want that they don’t currently get? Where do industry experts see down the road? What is the CEO’s strategy?

  • Investor relations is about explaining your company – and this doesn’t change in a tough economy or bear market. Cole says the macro environment may change your content, but not the mission of IR. You need to keep explaining your business, what your company does, how you see the economic situation and its impact on your business.
  • Really, says Cole, it’s not about “Winning IR in a Tough Economy.” It’s just about “Winning IR.” And he’s right.

Aim. Ready. Fire!

November 25, 2008

TargetI’m no expert on hunting, much less combat. And it’s been a long time since I took an NRA gun safety course as a kid. But in the art of financial communication, I do have an opinion on how we ought to take our shots: The order should be “Aim. Ready. Fire!”

By this, I mean that investor relations professionals should counterbalance the occasional tendencies in the executive suite or PR department to – really quick now – “Fire!” The call may come as, “Let’s get out a press release” … and then we’ll think about it. In more level-headed places, the first step may be to get something ready – develop a press release, write a Q&A, organize a conference call. Execute a tactic.

I’m all for preparation and action. But our first step really should be “Aim.” The IR professional in the room should ask, what’s our goal? Who are we trying to reach? Can we get more specific on objectives? How will this advance our business or support the company’s value? Can we get more specific on these target audiences? Are we aiming the right message to people who will respond to it? What will maximize our impact?

At the start of each tactic, that is, we should think through a little strategy.

© Copyright 2008 Johnson Strategic Communications Inc.

Thanks – NIRI & University of Michigan

August 23, 2008

This week I’ve been attending the Theory and Practice of Investor Relations executive education program at the University of Michigan Ross School of Business. The seminar is an opportunity to delve into financial, regulatory and communication aspects of IR with an expert faculty – plus a diverse group of colleagues who bring their own experiences and insights.

The annual program is co-sponsored by the National Investor Relations Institute (NIRI) and the University of Michigan. I was thrilled to attend with a scholarship awarded at the NIRI 2008 annual conference in San Diego. One purpose of this post is to say thanks to NIRI and the University – and, at end of the week, I strongly recommend it to any IR, finance or corporate communications executive.

Besides advancing my own skills, the seminar has been a time to step away from day-to-day work and think about what we do as IR and communications professionals. I’ve assembled quite a few of my comments and take-home learnings on a Lessons @ NIRI-U of Michigan notes page in this blog. Let me know if anything sparks a question or reaction for you.

The media – your summer thriller?

August 5, 2008

Here’s a summer reading idea, since we have a few weeks left, maybe with some pool or beach time: Manage the Media (Don’t Let the Media Manage You) by journalist William Holstein. It’s a quick, easy read in the Harvard Business School Press “Memo to the CEO” series: 100 pages, with many anecdotes and a real-life point of view.

Even if your job in investor relations excludes dealing with the media, this little tome offers valuable insights, so think outside the silo. Sooner or later today’s headlines on executive pay, shareholder activism, CEO missteps and other topics may come home to roost – and as an IRO you will have input into how your company communicates in a crisis. A little forethought now may help avert a nightmare later.

Attacks on corporate reputation pose some of the worst risks to shareholder value, and the author notes that CEOs and boards are starting to realize the need to manage those risks:

In response to the rapid emergence of coalitions of critics, shareholders and investors, and in recognition of the increasing prevalence of Internet-based communications, there appears to be growing consensus … that the broad role of communications must be more deeply integrated into how CEOs chart their business strategy. Communications can no longer be a sideshow.

Media relations also caught the attention of NIRI in the July issue of Investor Relations Update – worth a peak if you haven’t read the article.

Not that a CEO, VP of public relations or IRO can really “manage” the media. Giving up that illusion is the first step toward successfully working with the media. What Holstein presents is a practical set of suggestions for how companies can manage themselves to communicate more effectively.

Practice, practice, practice

July 24, 2008

As investor relations staffs gear up for management presentations – whether in a quarterly conference call or a road show with investors – the admonition to “Practice, practice, practice” rings true. Telling a story well takes work, Hollywood executive Peter Guber says: 

Great storytellers prepare obsessively. They think about, rethink, work, and rework their stories. As Scott Adelson, an investment banker who uses storytelling to help clients raise capital in public markets, said … ‘Sheer repetition and the practice it brings is one key to great storytelling. When we help companeis sell themselves to Wall Street, we often see the CEO and his team present their story 10, 20, 30 times. And usually each telling is better and more compelling than the one before.’

– Peter Guber, “The Four Truths of the Storyteller,”
Harvard Business Review, December 2007