Fasken
Jeremy, how's it going?
Cohen
Good, Mark, nice to be with you today.
Fasken
Yeah, glad you can make it. So today we're going to be discussing how IROs can implement what you call a "Total Stakeholder Approach". Can you define what that means for our listeners before we start?
Cohen
So every day an IRO is living and breathing, talking to sell-side analysts, buy-side analysts, portfolio managers, right. And, you know, we're communicating at many different in many different channels, right, whether it's at conferences, whether it's during earnings, whether it's on social media. And I think we have to recognize that everything we say and do is not just touching the investment community, right? It's touching customers, they're listening, competitors are listening, employees are listening, media is listening, vendors are listening. So what a Total Stakeholder Approach really means is that when we're communicating, when we have a communication strategy, we have nuanced messaging for each, each different stakeholder to make sure that, you know, what we're saying is effective for their own needs. So that's kind of what I mean by Total Stakeholder Approach. Is that just that we're accounting for everybody, in the 360 way, and not just focus on the investment community.
Fasken
Okay, great. And so one topic that comes up a lot is how IROs , I'm doing air quotes here for those that can't see it, "Get a seat at the table" and be more involved in strategic discussions, and strategic planning. Can you explain why you think IROs should be involved in those discussions?
Cohen
Sure, so like it's my view, and I don't think I made this up, but that the IRO's job is really to be a de facto chief intelligence officer. So obviously, like I said, it's a made up title. But I think it really speaks to the broad set of knowledge that an IRO must possess. So what this means is that, you know, the investor relations officer, they really have a pulse on Wall Street, right, they understand perceptions, and what it takes to evolve them. So like, every day, we're in the trenches, we hear, you know, the good, often the bad, sometimes the ugly, right. So, you know, it's our job to really synthesize the information that we're taking in from all different all different types of analysts. And because we have such deep institutional knowledge, you know, we're able to take that information, really prepare and arm executives with the right information so that when they are going to make decisions, right strategic decisions, they are accounting for what Wall Street is thinking.
Cohen
So it's really important for IR to have a seat at the table, because they possess all this institutional knowledge that really nobody else in the company has, at least not the breadth of it and the depth of it. So I'd say, you know, in some companies, an IRO doesn't necessarily have a seat at the table, maybe IR is just the necessity of being public. But I think the companies that do IR well, the IRO really does have the ear of the executives and telling them how it is right? And not necessarily just telling them the good and also just, you know, what is the bad? So I think that's, I think that's really the big reason why an IRO should have a seat at the table is because they are, they are the ones who are possessing the most knowledge with this very important stakeholder.
Fasken
And so, obviously, in your seat at Edelman, I mean you work with tons of different companies, do you see that that's kind of a different approach there when you look at sort of in-house IROs versus third parties or consultants like Edelman?
Cohen
Yeah, so look, I've had the privilege of being both in-house with Gogo, the in flight Wi Fi company, and also now with Edelman for the past five years, you know, I'd say the biggest difference is breadth versus depth, right. And so, you know, in consulting, you know, we work with many different companies who are at many different stages of the lifecycle see many different strategic situations, whether it's M&A, whether it's activism, whether it's executive transitions, but often at arm's length, right, because we're not in-house. So it's our job really, to deepen our relationships, and really embed ourselves in the organization. And so, you know, I think if you've met one company, you've met one company, and each company has a different philosophy and how they engage consultants, but I think the ones that do it really well are the ones that, you know, want to take some direction from consultants and, and our job is to really help them see around corners. So I think when you're in-house, it's all about depth, right? It's a cross functional nature to the role. It's not just finance and communications, and there's really a need to deeply understand both your industry and your peers. So, you know, I think that there's, there's nuances to both. I think that, you know, either way, there's a strategic mindset that a consultant or an in-house IRO must have to, you know, ensure that the company is driving forward.
Fasken
So a lot of this comes back to when you talk about a total stakeholder approach and having seat at the table and IR being involved. Seems like a lot of it revolves around this idea of like having that deep, deep industry expertise or deep understanding of the company. And something that I've heard in other episodes and other interviews that we've done: So what can IROs do to become that expert to build those strong relationships across the organization?
Cohen
Yeah. Look, I think a lot of people think this, but I think really for IR, you know my biggest piece of advice is to really become the hub of the wheel. I think a lot of people like to think they are, I really think IR does actually possess that role. So I think about that both internally and externally, right. So internally, like I said, it's not just finance and communications, but it's also legal, it's also marketing, it's also operations, its strategy, sometimes it's customer service. So really, it's, you know, we're learning a lot of different languages. You know, if you have engineering, you know, I'd say, go talk to people on your engineering team, understand what they're doing on a day to day basis, if you have R&D, talk to them. And you don't need to become an expert on those fields, but have a working knowledge that you have, like a full understanding of what goes on at the company, I think is really, really important. Especially because you're gonna be pulling information from all these people, and pushing and frankly, pushing it back out at times. So really being at the center is really critical. So you have a really deep, deep knowledge of the company.
Fasken
I was just gonna say you had a really good example, when we spoke last week about your experience at Gogo, and sort of, you know how that seems on the surface, like this very straightforward business model, but it actually has a lot of moving parts. It's like, how did you go about kind of making those relationships in your time at Gogo?
Cohen
Yeah, I think my time at Gogo was unique example. Because like I said, it's like you said, it's not just a company. That's straightforward business, right? It's Aviation, its Telecom, its Satellite, its Internet. So you really need to be an expert in many different areas in many different industries. And that requires talking to many different people to speak many different languages, because you don't know which type of analysts are going to come across. Right? Goho had, analysts who focus in the satellite industry, we had analysts who focus on aviation, so you really need to be knowledgeable in many different industries. And that requires talking to many different types of experts, and they live across they live across your company, and you just need to be able to find them. So a lot of the times, what we would do is we'd work with sales to push out information to them about our strategic decisions, you know, what is our narrative, that when they're talking to an airline, right, they're telling the same story. And it's a little nuanced. But that's the, that's really the importance of IR, when I talked about cross functional nature of the role is what we're communicating, can layer down to other parts of the company. And so we want sales and IR, and we want HR and IR, you know, to all of these being the same language, right. Same with public relations calculations, and IR, I know you're doing another session on this, but it's so critical that they're aligned and telling the same story. And so, by having those internal relationships, you're able to, you know, ultimately, you know, build the rapport and build consistency across the organization. So I think that's, I think that's the critical part with building internal relationships.
Fasken
Yeah. And it seems to be also a trend that that I've heard in a few different discussions, which is like, there's sometimes this misconception of IR should be really focused on sort of the financial metrics and the earnings call and everything, there seems to be this growing sentiment that it needs to be more than than that, right. I think it's always been the case. But there seems to be a lot of people that are advocating for the idea of like, IROs needs to be more than just the quarterly report, and really carrying through that, like mission and vision. And the overall business strategy, which, which I think is super interesting. And it brings up a question that that I was thinking through, as you mentioned that which is, you know, I've heard a number of discussions over the years about people saying, you know, in earnings calls, or in AGMs or your investor days getting all the different departments involved, like bringing in different department heads. Is that something that you've seen work in previous roles, or that you recommend to your clients at Edelman?
Cohen
Yeah, it's a good question. And I'd say that if you've met one company, you've met one company, I think I've said that before, there's a balance between having too many cooks in the kitchen, and you know, being efficient and getting things done. Right. So I think it's okay, I think the who clients do it best, probably have a small and trusted group. But that small trusted group is taking the opinions on the side from other parts of the organization. So it's accounting for everybody, but it's not everybody in the room at the same time.
Fasken
Well, I mean, I think at the end of the day, what it's coming down to is it really needs to be carefully planned out, right? It's not like you can just communicate once in in an all hands, strategy, and everything is and then expect that that's going to, that's going to follow through. And even to your point earlier of saying, you know, you need to be really thoughtful about who are the different audiences that you're communicating this message to, and how does it need to be be structured in the right way? There's one of the questions we didn't really touch on in terms of becoming an expert in building those relationships. Are there sort of tangible steps that you take or you know, a playbook that you have in your seat at Edelman, like you go into these companies that maybe you don't know much about? And so your team has to go in and learn a lot about them. So are there steps that you take beyond just hey, we just got to get in there and have a bunch of conversations?
Cohen
Yeah, look, I think what a company can do from a communications perspective to, you know, really enact an effective communication strategy, which I think is like the core of the question you're asking is, you know, get buy-in, across the organization. So what that means is, you can have a lot of conversations, but we need to really have a viewpoint on you know, why my company is an attractive industry? You know, what is my company's economic moat? Why is our growth strategy compelling? How does it impact our margin profile? Right, what is our long term guidance framework, cap allocation framework? So I think having that buy-in, is really critical. And that's kind of laddering back to our last question of, you know, getting other stakeholders within the company involved. Right, and not necessarily having them have a seat at the table for communications, but making sure that their voice is accounted for.
Fasken
Yeah. Okay, that makes sense. And I think my next question is about tips. Because, you know, it's partly about crafting an effective communication strategy. But I'm also thinking about an IRO who's coming into a new company, or is perhaps in a role where they're feeling like the messaging isn't very strong, or it needs some work? What are some tips that you would give to those people to get the resources and the attention required? Right? Because it's a big, it's a big project?
Cohen
Yeah, I think there's two things I would say is, first off, consume, consume, consume, right, take in as much information as you can. And you know, the art of what we do is synthesizing what matters, right? So you know, when you have a framework for what you think your investor narrative is, so I've kind of laid out a little bit of what that looks like, right? What is the why why should we focus on this industry? Why should we focus on this company, right, the growth story, the, you know, profitability story, the sustainability of that story. So I think that's part one is just consuming as much information as you can, and really figure out what matters, it's, when you first come to a company, you know, you kind of had this, you're, you're fortunate enough to have this third party angle, right, where you're not necessarily embedded fully in the company. So you get through on a listening tour of sorts, whether that's with internal participants, right, which we already talked about, or external participants, right? And so what does that mean? You know, it's beyond investors. You know, it could be meeting with vendors can be meeting with customers, industry experts, you know, your bankers, your consultants, dedicated journalists to industry, right, get get as much information from many different angles as you can. So I think that's part one. And part two is make sure you have a champion in the company. And what I mean by that is, whether it's your CFO or CEO, or COO, have somebody that's willing to, you know, partner with you. And, you know, recognize how critical this is the company going forward, right? You know, a narrative can often seem passive, but it has a lot of tentacles across the organization, and really does drive perceptions with many, many different stakeholders. So having a champion in the C suite that you can work alongside with and drive the sport with other participants in the company, I think is really critical.
Fasken
But that seems like it's probably a huge challenge, right? If like getting that attention getting those resources. And so I would imagine you see some instances where there's pushback or, or resistance, right, from maybe management who perhaps are busy, and they don't have the time to sit down and do these workshops and everything that are required, what have you seen work, in terms of getting their attention, and ensuring that they're investing the time and resources into into ensuring that there's a strong communication strategy?
Cohen
Yeah, this is where you arm them with the data, right? hard data, right? It's, it's one thing to come with your opinions. But if you're coming with hard data of what investors are saying, right, that puts their ears up, whether it's, you know, good information, or whether it's information that's bad about the company about management. You know, often you see that happen during perception studies, but, you know, every day we're doing perception studies, in essence, right, every day, every time you talk to an investor, there's a, there's a perception that you're hearing. So, you know, I think relaying that information back is probably the most effective tool to getting an executives attention, you know, and once you have their attention, if you get if somebody within the deeper in the organization gets an email from the CEO, or CFO, you know, they're going to, you know, obviously, pay attention to that and work closely with the IRO to make sure that they're getting the IRO getting what they need. That's what I mean, by having a champion, you know, not everybody knows that everybody in the organization even knows what investor relations is it's our job to help teach them that. But in the case, in the cases where they don't, then you need that champion to help kind of push everything forward for you.
Fasken
Yeah, that's an interesting idea, right? Like, you can take all the notes from the meetings, obviously, that you're having, it's like, Hey, these are questions that are being asked of us. And clearly, clearly, they're being asked because some aspect of the communication strategy is not effective, or it's not clear. Would you then also look at things like equity research? I think the perception study is a great one where you could be reading, rereading a research report, it's like this analyst may not fully understand the strategy or those the types of sources that you you're pulling from.
Cohen
Yeah, absolutely. I mean, I, frankly, I think equity research is something that just to get letters up to the management team, but also even to the Board of Directors. You know, you want your board to be armed with the right perceptions and In what people are saying about the companies that they can do be effective in their job of guiding management. So, yeah, I think equity research is absolutely critical. And in that regard,
Fasken
What about the retail side of things? Does your team put a lot of time into looking at social channels and things like that?
Cohen
Yeah it's incremental. I, you know, I mean, for an IRO, your biggest ROI is working with institutional investors. I think certain organizations, you know, certainly those are better B2C companies, you know, they have a little bit more of a retail presence. And it's important to keep an eye on them. It's hard to communicate to everybody, often you'll see that happened in the annual meeting, something you more keep an eye on and make sure that your credibility is being, you know, protected, rather than necessarily engaging deeply. It's just, it's just time, right. And your time is best spent with institutional investors. But that's not to say that retail is unimportant, it's just that your ROI is much greater with institutional investors.
Fasken
And so I think my last question here is, how do you actually measure some of this, right? I mean, so you've identified say, there's a, there's a challenge, you've found that champion who's going to spend the time and resources you go through a project like this, reworking the messaging, whatnot, how do you work with clients? Or what do you suggest to to IROs? To say, like, Okay, we've done this project, how do we actually track whether it is effective? Whether people are understanding our communications and our messaging?
Cohen
Yeah. Like, I don't think there's a good answer, where you're gonna get hard data that's gonna tell you, because it's all qualitative, I think it's, it's seeing the progression of understanding of the company, seeing the progression of your analysts, and how deep their relationship is within the company. I mean, are they talking to just the CEO and CFO? Are they asking to talk to the CMO? Are they asking to talk to the CTO, right? There's those little nuances, where you can tell if your story is being communicated effectively, because they want more. Right. And so and, and as you as you replay it back to them? Are they understanding? Are they telling you the same story that you're telling them? Right? And so that's kind of that's unfortunately, the best way to tell if their story is being communicated effectively? I wish I could tell you there's hard science behind it. But in a lot of what we do is art.
Fasken
No, I think that's great. And I mean, I've heard that before people talking about, you know, changes of strategy, and how do you measure whether it's working? And a lot of people have said, it's really about the conversations you're having with investors, right. To your point, are they repeating back the message that you're putting out there? That doesn't happen overnight? Right? It's I think, this is one of those things where it's a marathon, not a sprint, yeah. You just gotta invest the time and be consistent.
Cohen
Yeah and I'd say you know, have a key messages, key overarching messages to your story. And don't be afraid to repeat those, right? I mean, it takes everybody, you know, hearing things, three, four or five times to really absorb a message. So you know, don't be afraid to repeat yourself, especially if it's a key message. One thing I like to do with my our clients is tell them, you know, during earnings, especially, reverse engineer, what you want your analysts note to be, and kind of use that almost as your guide for how you're going to message the quarter.
Fasken
Yeah, I think that's great. Kind of the key points, don't, don't try and cram too much into the earnings call, decide on what those are, and then build everything around it.
Cohen
I mean, if it's so if you want your story for the quarter to be about margin expansion, you know, and you that's what you want the analysts to say, and the headline of their notes after the quarter, then make sure the key message your'e is getting across his margin expansion and say it more than once.
Fasken
Yeah. Awesome. Jeremy, this has been great. Really appreciate the time. Thank you so much, and hopefully we'll get a chance to this again sometime soon. That's great. Thanks so much.
