Intelligence: How do Investors get their ‘INFO’? (1/2) Institutional Gov./Politics Customers Suppliers Economics AGM Market Research Internet* Annual Report Media Analysts Fund Managers Due Diligence NGOs Newsletter Spokespersons
Intelligence: How do Investors get their ‘INFO’? (2/2) Retail Gov./ Politics Customers Public Events Economics AGM Ads Internet* Annual Report Media Analysts Fund Managers Relatives Friends Pasar Malam Employees Employee Bloggers Mgmt Actions Newsletter
Investor Intelligence: What?
Record feedback and questions
Competitors’ IR communications
Top 10 Analysts’ views on Company
Top 10 Analysts’ views on Industry
Investor Intelligence: Why?
Broad view of market
Less optimistic/review own assumptions
Upgrade IR function to be strategic
Feed Management discussions
Better and more relevant IR communications
Investor Intelligence: Why? Revenue Growth Base Retention Share Gain Positioning Adjacent Market New Business Operational Excellence Product Leadership Customer Intimacy Competencies Information Systems Motivation, empowerment, alignment Financial Learning & Growth Internal Process Customers Investment Strategy Productivity Market Value
Dangers of Intelligence…
Also known as ‘Beware of Benchmarking’:
Big vs. Small company
Selective success stories
Correlation vs. Causal
Actionable vs. For-fun
Intelligence: Survey Problems…
“ In business after business, 60% to 80% of lost customers reported on a survey just prior to defecting that they were satisfied or very satisfied .”
HBR March/April 1996
Is Investor Relations important?
Obstacles to Growth of Investor Relations If IR is so important, why is it not growing?
Challenges of Investor Relations
Stake- vs. Share-holder*
Global operations – difficult to explain
Increasing focus on ecological, social, ethical issues
Diverged expectations for same issue
What to do with Excessive Cash?
Superficial changes vs. Fundamental Changes
Investors depend on ‘hearsay’ vs. ‘facts’
Share Price ≠ Market
R&D/M.S./HR vs. Investor Expectations
Opposing ‘Expert’ views
“ Good news for stockholders can be bad news for other stakeholders.”
Gregory Miller, Assoc. Prof., Harvard Business School.
Principles of Investor Relations to counter Challenges
Consistent and Proactive
Performance vs. Controllability
Aligned with operating/strategy position*
One message, Different Emphasis
Maximizing IR in Communications Communications Internal External Mgmt Distributors Suppliers Proactive Reactive Proactive Reactive COMM Tools COMM Tools Employees Media Government Public Authorities Associations Universities NGOs Investors
“… in the past 18 months, we have heard that profit is more important than revenue, quality is more important that profit, people are more important than profit, customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our performance is inconsistent"
CEO, Anonymous www.myCNI.com.my www.OOBEY.com
“ The business of business is Business, not Investor Relations”