Starting a new job is never easy. But when your predecessor has been well respected, well established and well liked, it can be, well, harder. Building new relationships, gaining the trust and confidence of management, and dealing with the this is how it’s always been done syndrome are all hurdles to be overcome. Above all, the challenge is making the role your own.
Margaret Eichman, vice president of investor relations and corporate communications at the Quaker Oats Company, knows all about IRO succession having taken over in 1990 from Deborah Kelly. Kelly was highly respected and indeed went on to win the Lifetime Achievement Award at the IR magazine US Awards 2001.
‘She was a true pioneer,’ Eichman says of her predecessor. ‘In the early 1980s, IR functions were generally handled either by somebody from the finance department or somebody who was more PR-oriented. Debbie was one of the first individuals who realized the potential of combining both communications ability and strong financial knowledge. Before the mid-1980s the role of investor relations officer at Quaker didn’t exist, so when Debbie joined in 1982 she created a benchmark for effective investor communication.’
Anyone who sets a benchmark is a tough act to follow, and especially if that person was one of the originals in the field. Eichman continues, ‘When Debbie joined Quaker, she took a whole new approach to being proactive with Wall Street and with investors, and she began to talk about strategy. These were things that hadn’t been done before.’
A groundbreaking, benchmark-building predecessor needn’t overshadow your position, however. The key is to view previous successes as a platform on which to build. Indeed, you’ll probably find industry best practices already in place. The goal is to improve upon the past, not to begin all over again. As Eichman says, ‘Debbie had a very strong and very positive reputation, so there was no need to step in and try to reinvent the wheel. The challenge was how to make our IR practices even better.’
Balancing act
But building on a predecessor’s work doesn’t mean merely replicating it, or replicating them. PTC’s former IRO, Tom Barth, was one of America’s top small-cap IROs, according to the IR magazine US Awards 2002. When Meredith Mendola took over the role at the Massachusetts software company, she needed to focus on her own background, personality and talents.
‘Tom Barth has a different approach to IR than I do, but everybody has their own style,’ Mendola remarks. ‘If you do something somebody else’s way just because that’s the way it’s always been done, then you’re not going to feel comfortable, and you’re not going to do your best job.’
So when starting in a new position, you have to strike the right balance between relying on established, tried-and-tested practices, and introducing your own ideas.
But deciding what needs to change and what needs to stay the same is tough. ‘Change has to be organic rather than revolutionary,’ says Peregrine Riviere, who replaced Hugh Roberts as IRO at the UK’s Carphone Warehouse. ‘It takes at least a full reporting cycle to establish what works and what doesn’t, and very often things are the way they are for a good reason, even if you can’t see it at the time.’
Riviere stresses that gaining a full understanding of how a company works is a prerequisite for innovation, which is why it’s a good idea to do your homework first. In-depth research about the company you’ll be working for will make any job transition easier, but it’s especially important in the field of investor relations.
As soon as you accept a new IRO role, it’s crucial to gather strong, direct sources of information about, and insights into, the new company. So read the financial statements, attend planning meetings, speak to analysts about external perceptions of the company, and have one-on-one lunches with senior management.
Fiona Ross agrees. She recently took over the IR department at the Bank of Ireland from the highly respected Mary King, who had been in the role for over 20 years. Ross recounts, ‘I read any research report I could find, reviewed all media coverage, and talked to anyone who had anything to say.’
Speaking with people both inside and outside the company is necessary to get a grasp on all aspects of the business and its value drivers. But don’t limit this just to your new company; it’s important to find out as much as possible about your competitors too. Not only will you feel more confident about your role, you’ll also be able to quickly establish yourself as a critical source of reliable information for your new colleagues.
Another crucial, and often overlooked, aspect of understanding how a company works is listening, especially if you’re lucky enough to have a transitional period of overlap with your predecessor. As Eichman says, ‘A lot of the preparation for my new role involved listening – Debbie would say I was in my sponge mode. The key isn’t jumping in and saying, This is what I know, but really listening intently to get the best insights into how to run the department and the function.’
Aside from listening to the incumbent, open your ears to other IR staff and management about changes they would like to see. Being new to a role and still a relative outsider is a great opportunity to find out what’s on everyone’s IR wish lists.
Make contact
In the first crucial days on the new job, don’t sit shyly waiting for the phone to ring. Proactively call analysts, investors and perhaps the media to make the first connection. Now is the time to set the tone for future dialogue. ‘Ring the analysts, check their numbers, go through their models, make sure they’re happy with where their forecasts are going to be this year and next year,’ counsels Riviere. ‘It’s really about raising awareness that you’re new to the role, and that you’re now the primary point of contact.’
The same goes for internal contacts, especially as earning the trust and respect of your colleagues is always one of the top priorities when starting a new job. When Fredrik Lindgren took over from former IRO Per Spangberg at Sweden’s Investor group, he immediately involved others in his learning process. ‘You have to establish a good network, get to know your counterparts, and maintain a high level of service,’ he explains.
As the new kid in class, it’s best not to pretend to have all the answers and a complete perspective on every topic right away. Don’t be afraid to admit, ‘I really don’t know the answer to that question,’ then make it your mission to find it out. Building rapport and credibility with the investment community, or with senior management, takes time and effort – but it isn’t reliant on knowing everything from day one. Riviere, who has been in his new IR position for four months, says building relationships comes from ongoing, regular dialogue. ‘It’s evolutionary,’ he concludes.
However, there may never have been a tougher time to take over an investor relations position. The increased focus on the role comes hand-in-hand with increased responsibility. As William Heyman, president and CEO of US executive search firm Heyman Associates, notes, ‘From discussions with our corporate clients, it is absolutely clear that the IRO bar has been raised, and on-the-job training just isn’t an option. It is also clear that many criteria that corporations and investor relations agencies may have just hoped for when hiring two years ago are now absolute requirements.’
So IROs in a new position not only have to live up to and exceed their predecessor’s achievements, they also have to live up to the increased expectations of their stakeholders. But conducting thorough research, working at relationships both internally and externally and, ultimately, running a good IR program should ensure you’re able to step out of the shadow of a respected predecessor. Ultimately, success in a new position is about having confidence in your own skills, and faith that the decisions you make, and the routes you take, will be the right ones. But more, much more than this, it’s about being able to say I did it my way.
