Setting your strategy

Showcase your progress, measure your success and stay nimble

Setting your strategy

Showcase your progress, measure your success and stay nimble

When setting a strategy that can be sustained over time, IROs’ primary focus should be on developing an approach that’s repeatable and shows investors near-term progress and milestones as companies work toward accomplishing long-term goals, advises AT&T’s Amir Rozwadowski.‘This requires long-term and detailed strategic planning so that your messaging lines up over time – not just quarter to quarter but also year over year,’ he explains. ‘Like a jigsaw puzzle, it takes time for all the pieces to fall into place. The challenge lies in the fact that you need to show the broader investment community what the puzzle will look like when it’s completed early on in the process.‘This is why it’s so important to initially [be on the same page as] investors to both minimize risk and ensure they understand the approach you’re taking on the journey. When done well, investors should ideally be able to easily understand how quarterly results fit into a three to five-year vision or strategy. ‘As always, flexibility is required as you progress, given the dynamic environment in which all companies operate today. Particular attention should be paid to thinking through all the pros and cons and the impacts they may have on your IR messaging and strategy over time. Like any puzzle, not every piece is going to fit on the first try.’

How do our IR experts measure the success of their IR strategy?

‘The main goal of IR is to guarantee that investors recognize the fundamental value of the company. Main successes are always related to being able to have new investors on board and build confidence and a long-term relationship. Investor feedback, even in an anonymous format, is key to continuing progress and innovation.

‘While this is the main measure to evaluate IR strategy in place, other ways to assess include feedback from the board, engagement levels – such as the number of meetings scheduled or requested – the time we take to answer queries and the level of coverage among targeted investors.’

– Maria Fontes, novobanco

‘Measuring the benefit realization of IR can be difficult. In an ideal world, you would like to see your efforts reflected in the form of a slight premium multiple on your shares compared with your peers. In the real world, however, effectively measuring this reflection can be rather complex. That’s not to say there aren’t ways to measure success – for instance, we track 13F filings over time to assess our mix of investors and to stratify institutional investors along a number of varying traits.

‘We also measure investor engagement activity and volume and use a contact management system that records all of our engagements, notes from investor meetings and other information to gain insights into our engagements for future improvement.’

– Amir Rozwadowski, AT&T

‘We look at message absorption by investors and analysts, assessed formally through our annual perception study and informally through active engagement with investors and analysts. In terms of KPIs, we assess the rate of active engagement with investors and the ‘conversion’ rate, measuring the effectiveness of attracting new shareholders and then analyzing retention by scrutinizing our quarterly ownership reports.’

– Rebecca Gardy, Campbell Soup Company

Case study: AT&T

AT&T’s Amir Rozwadowski talks us through his IR strategy process

‘The best way to plan ahead is still the simplest: you plan the work and work the plan with an understanding that life will likely require you to adapt along the way. Being able to be agile and manage through ambiguity is core to the IR role. The biggest constraint has always been – and remains – time. This is why we must ensure we’re getting the best return on investment for every commitment we make. We view this as part of our responsibility to our team, employees, C-suite and the broader investment community.

‘We start by setting goals for the year and then building a corresponding annual IR calendar to help us achieve these goals. This calendar includes core investor engagements such as targeted earnings release dates and analyst conferences to be attended by C-suite leadership. Against this foundation we also need to be nimble as the needs of our shareholders are as dynamic as the business we operate in, so it’s imperative to see this plan as a blueprint that can be augmented if and when required.

‘The foundation for determining IR goals always comes back to listening to what matters most to shareholders and other key constituents and knowing that those needs can change. When we meet with investors and analysts, we always intentionally leave ample time to gather their feedback and input.

‘We also collect anonymized feedback from investors and analysts by routinely engaging third parties to deliver a robust investor sentiment survey and then measure and compile feedback. This ensures we’re listening to constituents throughout our investor base and getting their unfiltered opinions. The feedback is then used to recalibrate and enhance our strategy, approach and processes throughout the year.

‘Ultimately, a big part of discussing your value proposition is listening to how it’s being received. If we’re able to create and execute on a strategy that addresses the top wants and desires of our constituents, we feel pretty confident it will deliver a positive end result over time.’