“We’ve got 25 analysts. What new thing can we say to change investors’ minds?”
So lamented the IRO of a large household name this week. If everybody knows the same thing everywhere, how can you distinguish yourself? Tone of voice? Outfit? Teeth-whitening?
We live in the Age of When. It’s not what you know, but when you know it. For instance, Elmore Leonard died yesterday. I read nearly every book he wrote and my bookshelves before Kindle gave me one-finger page-turning were packed with the paper pulp Leonard crafted so artfully, redefining snappy street dialogue in fiction. You should read one if time permits. Cuba Libre is a favorite.
Word first went in a Tweet from his publisher that Leonard had died – which then spread around to media outlets and a New York Times alert that landed in my email spam folder.
WHEN has replaced WHAT. It’s a lesson for IR. If you set a goal to change your shareholder base by incorporating more value money, you’ll succeed if it precedes a crushing collapse in business fundamentals that routs growth holders, followed by a focus on cost controls and core drivers.
For how long are you a value story? The “what” is your value drivers. But the “when” drives on-base percentage.
I used Moneyball before. Brad Pitt starred as the cinematic Billy Bean, baseball’s Oakland As manager, who changed baseball by measuring new things. Before Bean, scouts looked for sluggers. Bean thought harder. How do you score runs? Get guys on base. Maybe we should be drafting guys that get on base rather than guys who hit balls hard. Now, every time a batter comes up in big league games, you’ll see on-base percentage – at-bats versus on-base.
Same for you in the IR chair. If you’re measuring success by meetings, you’re drafting bodies, not getting guys on base. Your story is your story is your story. Tell it, yes. But getting more of those folks in the future to buy shares and help you achieve your objectives – a fairly valued stock, a well-informed market – can be enhanced by WHEN you call them.
I think IR should redefine success measures away from owners to market-share. That’s what we do in business. But that’s a longer story (if you want to know more, ask me).
The best on-base-percentage is going to come if you target value money when your shares are at a discount to rational value, and if your target can build a meaningful position under two weeks. Investors can only buy about 10% of your daily volume without changing the economics of your market. If you have $10m of “daily dollar flow” – money volume in your stock – target investors with less than $1 billion under management. Otherwise, you’ll do a lot of whiffing.
Starting thinking this way and you’re a streetwise IR pro. Elmore Leonard would probably make you a character in a book called “Get Money.”
