Your company works hard to create novel products, increase sales and so on in order to report higher profits each year. After all, good earnings are the way to a better stock price and investor support. Or is that no longer true in today’s economy? Stand back. Take a look. Is your management spending too much time in the business, and not enough on it? When was the last time you heard your CEO talk about increasing the inherent value of your company?
Shareholder value grows when management focuses on intangibles as well as the numbers. Has yours taken steps to maximize intellectual capital? Is management looking for and quickly acting on process improvements on a consistent basis? Has it explicitly defined your corporate culture? If so, what is being done to support that culture? How is the company building its brand?
Addressing such intangibles requires more work and creativity than improving more traditional measurements. IR professionals need to show management that communicating with shareholders about such issues will cultivate their loyalty. After all, these intangible assets impact shareholder value.
Flaunt it
The value of the innovative visionary has never been greater. So what do shareholders know about the visionaries on your team? If the answer is ‘Not much,’ then why not write a Who’s Who series identifying these individuals and their contributions to the company? Tell of their predictions for your industry and include quotes by them in your annual report.
On the customer front – whether businesses or consumers – internet time expectations have altered traditional business methodology. Everyone today expects faster, better service. How has this impacted your organization?
Has your company eliminated the ‘if it isn’t broken, don’t fix it’ philosophy? What is it doing to retain and attract ‘shake up’ thinkers? These are the people who can create or re-engineer processes to give your company its competitive edge. They know how to use technology as a strategic weapon. So their story must be told; and your publics, especially shareholders, must understand their impact on your business. Have they set the standard by which competitors will be measured? Bulletins announcing time-saving, more efficient processes are an effective way to enlighten stockholders. Your underlying message is ‘We’re working to provide you greater returns’; and it should ideally be delivered via e-mail.
What culture?
If asked to describe the corporate culture, would your management team respond immediately and succinctly? What of other employees?
If your answer to either question is no, your stockholders will have no insight into the environment at your company. You should work with the communications group to make certain the culture your management team wants adopted is evident in employee communication efforts; and work with management to ensure that their style fosters the culture – arguably your biggest challenge.
Human resources should be evaluating candidates based not only on their credentials but also their ability to thrive in your environment. And you should be telling stockholders about your efforts to acquire the best talent. Overall, your communications should reflect the culture. So if yours is a more casual business environment, for example, adopt a more casual writing style, stationery, masthead etc. Or if your company uses teams to solve problems and develop products, reflect this style everywhere from the letterhead to the annual report.
Your culture and your intellectual capital are intangibles that are key elements of your brand. But the brand is more than that. It’s why your customers do business with you. So be sure to tell stockholders what differentiates you from your competitors. Tell them, too, about changes made to improve customer satisfaction and competitive superiority. Don’t wait. Announce milestones and offer information about future prospects, goals, standards and strategies on an ongoing basis.You can encourage investors to make positive associations by making them feel a part of the causes your organization is supporting.
When you take management on the road to meet analysts, it’s your role to help them build rapport. So give them the information they need to establish common ground; and make sure they can tell the story and respond to questions in a way that will deliver a strongly branded message. After all, your CEO needs you to develop innovative communications that build stockholder loyalty and brand equity.
Keith Stein, who has a 15-year background as a corporate finance lawyer, investment advisor and business change agent, is chairman and CEO of National Auto Finance Company, Inc. (NAFI), a publicly-held non-prime auto finance company in Jacksonville, Florida.
