• What to do when you're face to face with a bear in the woods ... or the market?

  By Lyndsey | Posted Jan 12, 2009 | 0 Comment(s) | Filed in: Business, Management

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  This is a guest post by Terry Taylor, a communications professional with more than 30 years of experience in financial services. Terry holds a master's degree in economics from Case Western Reserve University, and his expertise includes investment management marketing, investor relations and financial communications.

  What options do you have when you come face to face with a bear in the woods?

  • Climb a tree?
  • Run?
  • Play dead?

  Each of these options seems sensible, except bears are excellent tree climbers. And, they can run faster than people.
  
  What about playing dead? Sometimes that works, right? Yes. Unless the bear thinks you’re dinner. Then it doesn’t.
  
  Bear Markets and Investor Relations

  Bear markets and a sagging economy produce the same kind of responses from public company CEOs:

  “Why should we talk to analysts and investors now? They’re just going to beat us up.”

  “I’ll reach out and communicate when there’s a good story.”

  “Things are too uncertain. Let’s wait ‘til we’ve addressed our problems — then we’ll talk.”
  
  When I started in investor relations 25 years ago, a friendly analyst said (in so many words):
  
  “I don’t need to see your CEO only when things are going well. I need to see him when things aren’t going well. If the CEO isn’t talking, it tells me he’s not confident. And if he’s not confident, why should I be? Plus, if I put investors into your stock but can’t explain what’s going on, I’m not happy. And I won’t forget.”
  
  One other thing: If you’re not talking to the investment community and your competitors are, who do you think will get a more favorable reception when the climate improves?
  
  What should you do in a tough market?

  Once you decide to keep your investor relations program in high gear during a down market, there are several things you can and should do:

  • Develop a Communications Plan. Define your strategy, key messages and how you intend to communicate them. And, be reasonable about your expectations.
  • Explain your Markets. You know your markets, and telling investors what’s happening provides them with valuable insight and a deeper understanding of your business and industry. 
  • Be Complete in your Explanations. Be as forthcoming as possible. It provides necessary information and conveys that you’re aware of problems and that you’re not in denial.
  • Talk with Shareholders. Keep a flow of meaningful information going out to investors — with emphasis on the word, meaningful. Cotton-candy articles don’t work. Focus on progress in meeting long-term goals and how you’re addressing problems.
  • Ask for Input from the Investment Community. The flow of information is two-way. Investors and analysts can give terrific feedback to you on what they need to know and how effectively you’re communicating. 
  • Don’t Over Promise. Be careful with what you promise and the forecasts you make. There’s no upside to being too optimistic.
  • Stay Visible. Don’t hide. Be as available to investor constituencies — or even more so — as you’ve always been. 
  • Keep Communications Consistent. Investor relations, public relations and employee communications must be on the same track. Integrated communications is always a good idea, but, in a down economy, it’s absolutely essential. 
  • Talk with Managers and Employees. In keeping with integrated communications, make sure your managers know the story and have thoughtful answers to questions. And, don’t forget your non-manager employees, especially those with client contact. 
  • Use Multiple Information Channels. Investor relations isn’t just road shows and one-on-one meetings. Consider blogs by executive management and keep your Website up to date with vital messages. Don’t forget individual shareholders either. Often, these are people in communities where you have operations and may be customers, too. Their loyal, steadfast support can be invaluable.
  • Monitor Insider Trading. The Street watches insider buys and sells. If insiders are buying, it suggests confidence in the company. If they’re selling, well, you do the math. Stay on top of what’s going on.

  There’s no guarantee that your stock price is going to instantly reflect the efforts of a proactive investor relations program. But investors notice, and it pays off over the long run.
  
  Back to the bear in the woods

  OK, we know that climbing trees, running away and playing dead aren’t good examples of what to do when you meet a bear in the woods.
  
  But, what should you do?
  
  I turned to an expert source, the U.S. Department of the Interior. The Website says you should:

  • Remain calm and don’t show fear.
  • Stand your ground.
  • Speak to the bear in a steady voice.
  • Stand tall to project  strength.

  Sound familiar? Pretty much the same advice for investor relations and bears.

• 4 Questions to Ask When Building Your Investor Relations Program

  By Paul | Posted Oct 20, 2008 | 0 Comment(s) | Filed in: Business

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  This is a guest post by Terry Taylor, a communications professional with more than 30 years of experience in financial services. Terry holds a master's degree in economics from Case Western Reserve University, and his expertise includes investment management marketing, investor relations and financial communications.

   

  One of the most important things a publicly traded company has to address is how it communicates with the investment community. And it doesn’t matter whether you’re a small, growing firm or an established industry leader – you have the same needs to access capital markets, maximize shareholder value and keep your owners happy.
  
  The challenge is putting structure around what you’re doing to get the most for your efforts. Every investor relations program should address four questions:

  1. Where is my company now?
  2. Where do I want my company to be?
  3. What do I do to get it there?
  4. Once launched, then what?
     

  1) Where is my company now?

  Most of us want to start with the second question and speak to the grand strategy. But a successful investor relations framework demands that you think through the environment in which your company is operating and how it’s perceived today, asking yourself:

  • Where is my company now and what is its outlook?
  • How is my industry doing within the context of the economy?
  • How do I stack up versus my peers?
  • Which analysts cover my stock? Which ones cover my peers?
  • How much of my stock is owned by institutions?
  • Which companies are the best regarded in the investment community and why?
    

  2) Where do I want my company to be?

  How do you define success? Just like any other business initiative, your investor relations program has to have clearly defined targets. For example:

  • Targeted total return versus a market benchmark and a peer universe.
  • Increased liquidity of company securities.
  • Levels of institutional ownership.
  • Expand investment analyst coverage.
    

  Make sure your objectives are reasonable and attainable.
  

  3) What do I do to get there?

  Next comes the creation of a communications program.
  
  For each objective you set, there should be a defined approach and set of deliverables. If your objective is to increase institutional share ownership, your approach could involve increasing security analyst coverage and portfolio manager interest. Deliverables would include presenting at institutional investor conferences, calling on analysts and portfolio managers with your management team, creating and distributing a quarterly company fact sheet and strengthening your web site to make investor material available.

  Be clear on accountability for each deliverable. It’s true that many tasks are shared, but someone has to be on the hook.
  

  4) Once launched, now what?

  Now that the investor relations program is under way, what do you do?

  • Track your results but be patient. Some of your actions will take time to see outcomes.
  • Listen to the market’s feedback and decide if your program needs to adapting.
  • Remember: The ability to achieve some of your objectives can’t be divorced from the real world. If the company isn’t doing well or doesn’t inspire confidence, no investor relations program in the world is going to fix that.
    

  Other questions, including how to integrate investor relations with public affairs, have to be answered too. But you’ll be well on your way to establishing an effective program if you build using a thoughtful step-by-step process.
   

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