It’s like life itself. When running out of money – towards the end of each month – you squeeze your mind for ideas on how to enjoy the most while spending the least. For investor relations officers it’s the same. When budgets are under pressure, and most are these days, IROs are forced to use their imagination to visualize better but not necessarily costlier ways to get their companies’ stories across and distinguish themselves from their competitors.
A bit of creativity is the magic secret to help you to make presentations enjoyable and memorable as well as educational. Fiona Ross, managing director at Dublin-based IR advisor EdgeWorthIR, says it’s a matter of picking a ‘unique angle’ and knowing how to put things into context.
Andy Mann, IR manager at BAE Systems, defines creativity as ‘the thinking process of producing new ideas, whereas innovation is the practical application of them.’ He prides himself on proactively looking for new ideas. But is he the rule or the exception? Are IROs especially inventive? Or are they more often dull people trained to talk to even duller people?
For Morgan Molthrop, vice president of investor relations at California-based Infonet Services Corporation, only ‘robots’ are not creative. ‘Read, go to the theater and the museum, keep your mind open to the world in general – it’s all stimulation for your imagination and a boost to your creativity.’ He says anyone with a global perspective and an ability to have a good ‘cocktail conversation’ also has a mind capable of generating new ideas. ‘Then the only question is how you fasten them onto your investor relations program.’
The story-telling approach
Molthrop’s goal is to convey his company’s story the way he would communicate any narrative: with a beginning, a middle and an end. ‘If I go to see The Lion King, the spectacle per se is not useful for my job, but it allows me to see how people react to the story, how it touches people emotionally,’ he maintains. ‘It helps me to see how human psychology works.’
Ross agrees that financial communication has the same characteristics as any other storytelling: you need to engage the audience, build up momentum and tension, then resolve that tension. ‘You have to make people feel compelled to hear what you’re going to say next, what your next slide is going to be,’ she says. ‘You need to make them exclaim, Wow! I never knew that, I want to see the next slide now.’
Sources of inspiration
Fresh ideas may not flow easily in the clamor of office life. ‘Creativity doesn’t turn on and off like a tap,’ Mann points out, though he confides that some of his most illuminating moments are when he’s soaking in a hot bath. Out of the tub he always has a bit of paper and a pen to brainstorm with. And his long commute from Hampshire to London is a chance to read deeply and widely, highlighting memorable passages. Incidentally, Mann always stands up when talking on the phone. He says it gets his adrenaline and other creative juices running, while better breathing and more open lungs make his voice sound clearer.
Back at the office, the support of top management is essential for innovation. ‘Sometimes there’s a mismatch because they don’t understand that creativity can bring value to the company,’ says Molthrop, who has faced that challenge and defeated it. For example, each year he produces a video about Infonet’s IR program to show to its managers worldwide. The most recent version was a musical.
What drives these creative IROs? ‘It makes your job more enjoyable,’ Mann sums up, while agreeing with Andrew Green, director of PR consultancy Creativityatwork, who says, ‘Coming out with new ideas can add value to your company. Any task that you face can swing into a commercial advantage.’
Green says he’s launching a revolution in applying creativity to business by, for example, transforming a negative situation to a positive one. Take the disastrous and embarrassing Millennium footbridge over the Thames. ‘Instead of spending £5 mn repairing the wobbly bridge, the UK government could have taken advantage of the situation and made it even more of a tourist attraction. Why couldn’t it be seen as an opportunity, like the leaning tower of Pisa?’
Ross also thinks IROs should look for a positive angle in even the worst situations. She once worked for an international retailer whose web site crashed the day of its IPO. ‘It could have been a disaster but we reacted quickly and decided the CEO should explain publicly what happened and be available for anybody who wanted to contact him throughout the day,’ she recalls. ‘The sympathy the company received that day from the investment community was huge.’
Victorian era
One problem, according to Reg Hoare, director at communications consultancy Weber Shandwick Square Mile, is that creativity in IR is stifled by too much regulation. ‘Being inventive when announcing results to analysts and investors can be dangerous because you can be accused of trying to put a spin on the news,’ he warns.
Hoare recommends a bit of pizzazz nonetheless. ‘Within the frame of best practice IR, you can make it more of an event when analysts and investors visit your company.’ Make one-on-one meetings truly interactive, arrange to meet in interesting locations, show off new products, and let analysts and investors meet with an array of staff, not just senior management. After all, Hoare suggests, ‘There is a strong correlation between the ability of a company to present its message and the way it’s regarded in the marketplace.’
Nicky Havelaar, business development director at Crown Business Communications, adds that the regulatory framework for annual meetings is outdated and inappropriate for the modern company. ‘The rules go all the way back to the Victorian age,’ she says, suggesting that ‘changing some of the laws to allow online meetings would be innovative.’
For now, though, there’s little room to maneuver. ‘There are some companies that see the annual meeting as a once-a-year chance to promote their brand among shareholders and customers. They see it as an exhibition of innovation and a way to transmit a good feeling about the company.’ It’s unfortunate that others perceive it as nothing but a legal requirement, though this is understandable considering only a small proportion of shareholders attend a live event. ‘Most companies just want a well-run event without ostentatious shows with people singing and dancing,’ says Havelaar. ‘You can’t spend too much money in a meeting addressed to 3,000 people, for instance, when your total shareholder base is of 30,000.’
Clean & tidy
Ever notice something in a movie and wonder if the director intended it? You can be sure they did. In the same way, IROs should exert control over every aspect of a live presentation from vocabulary to body language and even the appearance of the presenter. Many managers go through formal training, whether it’s rehearsals in front of colleagues or expert advice from media trainers. For non-English speaking CEOs, there are even courses to help them soften their accents to make them more understandable.
‘It’s interesting to see that the younger the CEO or IRO is, the better they are at public presentations,’ Hoare observes. ‘It might be they had more practice at school, or maybe they’re simply more confident. In my experience, a 40 year-old is better at presenting than a 50 year-old who’s better than a 60-year-old.’
Even deciding what to wear – and where – can be tough. Certainly, the days of dot-com T-shirts are over and a suit is now de rigueur. If analysts are worried about a company and they see the CEO looking a mess it may not help their confidence. Hoare remembers a company going through difficulties whose CEO wore a Mickey Mouse waistcoat for the annual meeting. The flippant gesture didn’t help the share price recover.
Wardrobe selection is only the tiniest first step. The most creative ground can be covered with the astute use of technology. Szabolcs Czenthe, IR manager at Hungarian telecommunication company Matav, says webcasts allow a lot of room for innovation – as long as you get the basics right first.
Czenthe recalls his old job at a Hungarian oil company, where he learned to avoid repeating the formats of webcasts, conference calls and other presentations. ‘You need to be more creative to make the message sexier,’ he adds. One of the principles he has brought to his new IR department is that you ‘can’t just read off’ PowerPoint slides – a sure way to send people to sleep.
Nor can you just repeat the numbers. ‘Numbers can be posted onto the web site and analysts and investors can consult them as many times as they wish. In oral presentations you need to tell the audience the inside of your business and your strategy for the future,’ Czenthe explains, adding that only 50 percent of a slide should be covered in writing. Any more and it’s overcrowded.
Steffen Heegaard, investor relations manager at Danish insurer Topdanmark, considers creativity essential to his work and the internet the best place to apply it. ‘We are a relatively small company with a market cap of E750 mn. So we have to do something different to catch analysts’ attention.’ His department is ruled by two governing principles: first, to be very open and very proactive in communicating with the investment community; second, a strong belief in the use of the internet as a very effective communications tool for equal and timely access to information.
With those two principles in mind, Topdanmark’s IR team devised an electronic fact book providing detailed supplementary information that complements what’s available in the annual report (www.topfacts.dk). Compared to the report itself, Topfacts is more fact-oriented, forward-looking and, most of all, regularly updated.
The idea was to provide better information – and more of it – at a lower cost. But there was also a human reason behind the fact book: ‘In Denmark, the seventh week of the year is the kids’ skiing vacation, but it’s also the period coinciding with the preparation of the annual report. We thought that instead of leaving everything to the last minute, we would do it on an ongoing basis and go skiing with our children instead of putting together the annual report.’ Heegaard was anxious about the reaction of analysts, but is relieved to report that the feedback has been good. ‘[The fact book] helped us stay at the top of investors’ minds.’
There are those who don’t agree that creativity is elemental to IR. According to Dariusz Chorylo, investor relations manager at Poland’s Bank Pekao, a telecoms IRO may be ‘aggressive’ with more ‘animated’ presentations; but at a bank the IR team has to be ‘more conservative to be in line with the image we try to convey.’
But conservative doesn’t have to mean boring. The numbers may well tell a company’s story, but the strategy and vision also need to be communicated dynamically and interactively. Besides, as Ross declares, ‘Creativity is free.’
