December 22, 2015
5 Reasons Investor Relations Officers are Intrapreneurial Disruptors
[This post comes courtesy of guest contributor Reginald Cash. He writes regularly at Markers Matters]
Laurie Havelock of IR Magazine recently wrote an excellent article on Seven Questions to Expect in an IR Interview. It got me to thinking. What would be the one question I would ask a pool of qualified investor relations candidates?
After reflecting on my own experience in IR I narrowed it down. The one question I would ask if I were hiring a IR manager today:
“How will you use your position in IR to disrupt our organization?”
Here are my 5 Reasons Investor Relations Officers are Intraprenurial Disruptors
1) IR on the front lines.
Investor Relations is a conduit for information flow from investors to corporate leadership. Next to sales or perhaps business development, no other department is better positioned to deliver an objective, potentially disruptive take on strategy and execution. If IR isn’t challenging internal assumptions, chances are the company is losing the battle.
2) Think like an investor.
Think about it, institutional investing is entrepreneurial. In much the same way a truly valuable new product required a founder to see things differently, investors generate alpha by going against the consensus. Investor relations should adopt a similar disposition. Entrepreneurial nimbleness is not only useful to anticipate investor concerns, it’s also the necessary mentality to go against the corporate heard.
3) They scavenge for information.
Access to new data or information is a sure fire disruptive tactic to create value. It’s the hundred billion dollar concept underpinning Amazon, Google, or Facebook. The same goes for investor relations. Investor Relations should remain on the hunt for any information which makes their company’s investment case more salient. That could mean developing new relationships up and down the corporate vertical or discovering reliable external predictive indicators. Foraging is as valuable to IR as it is to tech entrepreneurs.
4) IR runs at a different speed.
As any entrepreneur can attest, one of the most difficult things to get right is the alignment of product creation and sales. These functions naturally have different development cycles and thus are in constant conflict. IR is much the same way. The IR business cycle is often short and intense. Sometimes it’s a daily sprint to remain ahead of new and potentially ‘commercial’ information. There’s always friction when IR intersects with internal divisions that move at a more predictable or gradual pace. This friction is often the spark a company needs to discover new insights or accelerate the pace of change.
5) The fight comes with the territory.
Like entrepreneurs, in IR you have to bring the fight. Most effective IR departments are at odds with someone. As Americas Head of IR at Deutsche Bank, I relished quarterly investor meetings with one of our most vocal ‘bears.’ I think we both would have been disappointed by anything less than a heated sparring match. The same mindset and intensity is sometimes needed internally as well. In IR you’re bound to rub a senior executive the wrong way at some point. Why not do it constructively by challenging norms and biased decision making? Every IRO should embrace the fight and the disruption.