Posts Tagged ‘Skills for IROs’

How IR adds value for investors

March 6, 2014

NIRI KC 3-6-2014 Hancock & BurnsAt the NIRI Kansas City chapter’s “IR and Governance Bootcamp” today, Debbie Hancock, vice president of investor relations for Hasbro, Inc. did a great job – with an assist from Bruce Burns, director of investor relations for Westar Energy – marching us through “a day in the life” of an IRO, skill sets we need and the role of IR both internally and out in the capital markets.

That’s a lot of ground to cover – really, the whole job of IR. I’ll share one thought of many that struck me, from Hancock’s comments on a slide headlined “How IROs Add Value to Investors.” Note that she focused on adding value to investors. On her list: representing the company honestly, being prepared with answers for questions, informed and responsive, conveying understanding of the numbers.

The Hasbro IRO  listed one value-add that especially stood out to me:

Put the story together for investors. I think this is super-important…. What are the big takeaways from all this information? Put that together for them, put that story together.

Providing perspective, thinking like someone on the investor side and meeting the needs of an asset manager or analyst trying to make an investment decision, is probably the greatest value we can add in IR.

© 2014 Johnson Strategic Communications Inc.

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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.

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 

Skill sets for an IRO

June 13, 2008

Asked at the NIRI annual conference this week what key skills a leading CEO looks for in an IR professional, Chairman Jerre Stead of IHS Inc. (who has led no less than seven public companies) cited behavioral skill sets over technical competencies.

“Three come to mind immediately:

“First and most important is knowing how to listen. That’s an art that I think half the world has lost, or more. Knowing how to listen is a critical skill set….

“Two, being able to work, often with complex and complicated issues, in a parallel path. We keep a lot of balls up … being able to do those on a continuous basis.

“And then, three, being able to draw the demands of the different questions and issues we have, get the right resources inside the company, and make our team feel good that they’re providing those. So that’s a team-building skill set.

“But if there was only one, it would be listen.”