The Strategic IR Playbook
Matt Sonefeldt
Partnering with world-class organizations to create long-term value, cultural transformation, and social impact. Focused on investor relations, and the integration of narrative with operations, strategy, & culture.
The business of public companies engaging investors needs a playbook. Amazingly, there’s no standard set of best practices for how companies successfully navigate the public markets.
Not up for debate is that a company’s trajectory is intertwined with the market. Companies need the market to finance their business and pay employees. By one study’s estimate, 86% of companies issue equity each year*, including issuing stock to employees.
Also, the market forces management accountability. Public reporting & financial results are one of very few operating motions CEOs and CFOs spend time with their boards on EVERY quarter. Ultimately, it’s the market’s yardstick that writes the history of a management team’s performance.
Enter Investor Relations (IR), the team you entrust to navigate the public markets. We believe elevating IR into a strategic executive function creates a competitive advantage for long-term-focused companies. And as with other key functions in your organization, leveraging standard best practices is a game changer.
What follows is our “Strategic IR Playbook.” We’ve built this concise approach to winning with investors by drawing on 40 years of public market experience as IR leaders, investment analysts, and operating execs.
We’ve also open-sourced the full playbook on a public doc for anyone to read. The doc shares the key plays and a running list of best practices learned from decades of on-the-job experience. We will continue to revise & add to the document over time. LINK
Strategic IR and the Playbook
Strategic IR teams build an enduring narrative to achieve an organization’s long-term goals. The Long-Term Value Advisors Playbook consists of three pillars:
Here is a brief double-click on the three pillars and 12 specific plays:
Pillar 1 - Deliver the strategic narrative
Most financial disclosures and results content is ignored or glossed over. It’s often opaque & difficult to connect with, especially when it comes to earnings press releases & SEC filings.
Great organizations and leaders communicate through a different lens - they focus on their why. All stakeholders, including your investors, “don’t buy what you do, but why you do it,” best said by Simon Sinek.
We’ve built the concept of strategic narrative on this idea:
Pillar 2 - Nurture investor relationships
Investors are most important to companies on the hard days when you need stability, capital, and external support.
I learned this as a young semiconductor analyst. While semis underpin the global economy, their brutal boom & bust cycles described in Chip Miller’s “Chip War” make investing challenging. At Capital Research, we’d use tough days in the market to double down on winners we loved, like TSMC & Samsung. In turn these companies came to trust our stability and relationship commitment. I learned the lesson again while at LinkedIn. When our share price fell nearly 50% on one day in 2016, a group of investors that understood our long-term story provided much-needed market stability and bought our shares.
Those learnings helped cultivate an approach to treat investors like customers and nurture the market community. You need these folks to have your back when you need them most. Some of the plays we’ve learned along the way include:
Pillar 3 - Build company trust
One key advantage of being a public company, and having a team focused on it, is that you’re constantly in a 2-way dialog with an audience (investors) who have a differentiated perspective on your long-term success. The IR team is nailing it when there is a virtuous and trusted feedback loop between the company & long-term owners.
Key plays include:
This framework will help you build trust with investors and your team, paving the way for your long-term success as a company. Learn more at [email protected] and follow our LinkedIn newsletter, “Shareholder Letters.”
Footnotes
* Eugene Fama & Kenneth French, “Financing decisions: Who issues stock” Journal of Financial Economics 76 (2004); as cited by Baruch Lev in “Winning Investors Over”
Managing Director, Director of Research & Investment Strategy
1 年The voice of experience! Great content here Matt, congrats.
Founder and CEO @ Q4 Inc.
1 年What a great playbook. Thanks for sharing Matt. The focus on communicating the strategic narrative really resonated with me, but even more so was treating investors like customers and analysts like the White House press. In my (short) experience as a pub co CEO we have approached the market this way and it’s been very effective, but we can always do more. Thanks!
Director at Epoch Investment Partners
1 年Nicely done! All the best…
Innovation | People | Data | Strategy
1 年Thoughtful framework based on depth and breadth of experience. Thanks, Matt. Great contribution to the space.??
Long term investor at LRZ Capital
1 年Raimundo Monge fyi. I would definitely reach out to Matt Sonefeldt . What they did in Atlassian speaks for itself.