For prime ministers and presidents, the first hundred days are a talismanic period that sets the stage for whatever type of leadership is to follow.
The stakes are not quite so high for IROs, but many of the principles are the same. First impressions matter, and how an IRO is perceived internally and externally may affect his or her ability to flourish professionally.
“Never come in on Day One, saying, ‘Here’s what we’re going to do.’ You probably don’t yet have the credibility,” maintains Dennis Westfall, Head of Investor Relations at Definity Financial Corporation. “Remember, you’ve barely met people, and you haven’t talked to the analysts and investors yet, so don’t make too many strong recommendations. Build over time.”
Westfall notes that “taking the first few weeks to meet people, listen, and build a view can enhance your likelihood of success over the long term.”
That’s not to suggest that IROs should not hit the ground running. They should, for instance, immediately begin to reach out to key shareholders, if for no other reason than to calm the inevitable jitters arising from a new person taking the IR helm.
Joe Racanelli, who in June became Vice President of Investor Relations at Electra Battery Materials Corp., says that immediately after joining this Toronto-based mineral company he started contacting key stakeholders. “Investors want the comfort of knowing an experienced person is coming on board,” he says.
High Turnover, Fresh Opportunities
This year has seen an unusually large number of people settling into different jobs. Thanks to the Great Resignation, among other things, 24% of Canadians said that they are new to their current role or position, according to an ADP Canada survey released on July 27, 2022.
Anecdotally, Canadian IROs are on the move in surprisingly high numbers. “We’ve seen a fair amount of turnover in our client base and also in other companies that we follow,” says Mark Fasken, Co-Founder and COO at Irwin, a technology provider with a new IR career site that launched in May.
One reason for the high turnover, says Fasken, is that during the past few years, many executives seized opportunities in the high-flying crypto or cannabis industries. Now that these industries are undergoing a correction, many new hires are returning to more staid companies.
The bottom line: Now is a propitious moment for an IRO to be job hunting.
“Good, experienced IROs are in high demand and they’re getting poached by other companies,” says Fasken. “We see companies hiring for the IR position who are really struggling to find people.”
For IROs either contemplating or in the midst of a job change, the following is some advice for making your mark during the first year with a new employer.
The Three-Month Mark. “At the beginning, you really want to be a sponge,” says Fiona Grant Leydier, Vice President, Investor Relations, at Great Panther Mining Limited. She says that this piece of advice, which came from her father, is really an admonition to “do the job but don’t try to play the politics game and move the needle and shake things up.” In other words, coming in guns blazing is not the way to make a positive impression.
What’s more, being a sponge and absorbing information don’t just happen; IROs need to take some proactive steps to ensure that they’re learning as much as they should. Leydier recommends sitting down with the CEO, CFO, COO and relevant department heads and gathering as much information as possible.
Another proactive step is conducting a communications audit. This, says Leydier, should consist of reviewing all IR materials from news releases dating back at least three years to old investor presentations, financials and MD&As.
During the information-gathering phase, says Leydier, IROs should be on the lookout for low-hanging fruit, such as tweaks to messaging or improvements to make the website soar.
New IROs also have a unique advantage during the honeymoon period. Leydier notes that when reaching out to analysts and major shareholders, now is a perfect time “for you to ask a lot of questions because, at this stage, no one is expecting you to give them information.” A freshly minted IRO can, for instance, inquire about pain points and use that feedback to make solid improvements.
Racanelli agrees. When he joined Electra, the first order of business was reaching out to buy-side analysts, investment banks and sales desks “to get an idea of what they thought of the company and what we should do better, going forward, from a disclosure/engagement perspective.
Kim MacEachern, who was Director of Investor Relations at DIRTT Environmental Solutions for five years before the company temporarily eliminated the IR function this August, believes that early conversations with stakeholders can serve as “a mini-perception study.” She continues: “It’s a great opportunity to go to investors and say: ‘What are you happy with? What are you not happy with? And what do you want to see from us?”
She adds: “Because you’re brand new, you can say: ‘I don’t have the answers, but what do you want me to do in this position to advance your aims?’”
The Six-Month Mark. An IRO, says Fasken, should generally begin providing informed feedback to management once he or she has been with a company for half a year, a long enough period of time to have met with top investors and conducted at least one earnings call.
Around this time, Leydier suggests putting in place a key messaging platform, “which is basically your Holy Grail for communicating your key messages about the company.” She cautions IROs that crafting a key messaging platform takes time, noting that many meetings will need to take place before all the necessary buy-in is achieved.
She also maintains that the six-month mark is not too soon to have established a set of KPIs and begun measuring performance against them.
Finally, attitude matters, as well as achieving specific goals. During this time, says Leydier, it’s important to remain flexible and open-minded. “If tactics are not working,” she says, “you’ll want to look at ways to adapt your strategy and adjust for the next six months.”
One-Year Anniversary. “If you’ve done an excellent job setting needs and expectations in the role, then year one should be measured by the return on expectations. Did you deliver at or above what was agreed upon when you joined?” asks David Peck, Partner and Americas Executive Coaching Head for Heidrick & Struggles.
One way to measure success, says Peck, is to consider whether you, as IRO, are viewed as the ‘go-to’ person by internal colleagues and external stakeholders.
Leydier makes a similar point: “By the end of the first year, you would hope that everyone is looking to you as a team member and also as a steward for your company, both internally and externally.” She continues: “You should really have developed your ‘brand’ as an expert on the company and as someone people can come to for information.”
Evaluating Yourself
Measuring the success of an IR program is notoriously difficult, and so, too, is measuring how well an IRO is doing within the role. As Fasken says, “the challenge for IR is that it’s really difficult to measure the ROI of the job.”
Too often in the past, IROs got evaluated – and even compensated – according to a company’s share price. Because macroeconomics, markets, industry trends and other factors can all wreak havoc with a stock’s performance, IROs need to find better ways of gauging how well they’re doing.
One way to chart your own progress is to ask other people, especially those known for their honesty, for feedback. Peck urges IROs to “identify and build relationships with ‘truth tellers’ among your colleagues who can give you an unvarnished point of view on your impact.”
Racanelli is convinced that IROs should be establishing long-term goals and plans for their IR activities and regularly assessing progress made. He acknowledges that this is easier said than done. “Too often, you’re doing the day-to-day stuff, and some of the less obvious goals are put aside,” he says. “And then you find yourself scrambling in the fourth quarter and trying to figure out: ‘Where do I stand on those goals, after all?’”
Even though it’s challenging, Racanelli urges IROs to make consistent goal setting and goal measuring a top priority, no matter how crowded the IR calendar gets. The experts agree that tracking goals can help you correct course quickly, if necessary, as well as provide positive reinforcement for a job well done.
“You really want to see the value of what you’re doing, and how you moved the needle during the course of your first year,” concludes Leydier. “In a new role, it’s important for yourself and your own well-being to see all that you’ve accomplished.”