Who’s Got the Power?

The most powerful person in the world is the storyteller.  The storyteller sets the vision, values and agenda of an entire generation that is to come.
                                                            – Steve Jobs

Are you a storyteller?  Can you create a compelling narrative about your company, its strategies and results?  If you’re in investor relations (IR), do you think it even matters?

I know some will say NO – investors are rationale beings and only (expected) results matter.  Others will point to the rise of passive and quant investing strategies or increasing use of big data, analytics and artificial intelligence (AI) to guide investment decisions as evidence a company’s story doesn’t matter.

But, the idea of being data-driven cuts both ways as investors don’t just look at financial results.  For example, some are using nascent AI applications to mine linguistics and behavioral analytics to explain, describe and potentially predict future outcomes or evaluate a speaker’s level of cognitive dissonance or truthfulness.

Then there’s the increased investor scrutiny of environmental, social and governance (ESG) factors.  In my view, this ESG focus is really about investors wanting to know the “how” of a company:  How does the company manage risk (environmental, social or other) … how does the company source/produce/operate and the impacts thereof … how does the company interact with key stakeholders (employees, customers, communities, etc.)?  In short, how does the company conduct itself?

It’s in answering the how that a company’s story is told. When it comes to financial performance, the story puts context around how results are achieved:  Was it great strategy … fabulous marketing or customer relationships … disciplined execution or operating efficiency?

So, in every earnings release and call, investor presentation or roadshow meeting, a story is being told.  With that in mind, here’s some tips:

  • Be clear and concise: Establish context and convey results via effective headlines with supporting bullet points – this is something IR practitioners are well-versed in doing.
  • Master the narrative structure: Most stories have a story arc consisting of a main character who faces a journey or challenge which leads to an outcome. In business, the story arc goes something like a company with a business opportunity/problem executing strategies to address that opportunity/problem which creates operating and financial results.
  • Engage the eyes: A picture is worth a thousand words, or rather graphs, charts and infographics can get your point across with few words.
  • Make connections: Use examples to make your business narrative resonate. Highlight customer benefits of your products, innovations that create new market opportunities or employee initiatives that enhance productivity and efficiency.
  • Build on outcomes: Offer some direction on how the company expects to build on, extend or sustain performance long term in a given environment.

A memorable and credible business story can build confidence in a company, its management and strategies, thereby breaking through the clutter, attracting investor interest and potentially enhancing valuation.  Indeed, storytellers have the power.

Tell me a fact and I’ll learn. Tell me a truth and I’ll believe.
But tell me a story and it will live in my heart forever.
                                                         – Native American Proverb

 

Lisa Ciota
President/Founder
Lead-IR Advisors, Inc.

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