If your company is publicly traded or a private company preparing for an IPO, then you likely have two separate communications tasks, one focused on reaching investors and financial analysts, the other on reaching customers and the general public — Investor Relations and Public Relations.
The two obviously perform different functions, serve different constituencies, operate under different mandates, and typically report to different executives internally. Investor communications are strictly regulated. IR professionals are responsible for communicating a company’s business model, financials and future expectations to analysts, institutional investors, investment bankers, and the like. They usually work closely with general counsel, the finance organization, and under the Chief Financial Officer. Missteps, such as divulging information that isn’t publicly available or engaging in marketing-style hype, can breach securities law and lead to a number of serious problems — shareholder lawsuits at the top of the list.
Meanwhile, the PR folks, who usually work within the marketing department, are dedicated to the dissemination of the company’s story in various public forums, including the mainstream and trade press, at trade shows, and sometimes even within the company to fellow employees. Not guided by the same objectives as IR, they’re framing and presenting that narrative in the most favorable fashion possible.
Because IR and PR do not have the same audience, the same objectives, or report to the same supervisors, they frequently work in isolated silos with little if any interaction. That’s a mistake. These two units have more in common than the word “relations,” and savvy executives look for ways to leverage their output. Let’s briefly review two common problems, as well as a possible remedy.
1. Your messaging should be consistent across all business units.
Every successful company must have a clear, concise and consistent story to tell. This has always been so, but it’s especially important today, with so much information bombarding consumers. Whether it’s the chief investment officer of a pension fund, an individual retail investor, or a business journalist in search of a story, every information consumer has a finite amount of time. To penetrate and make a lasting impression, your narrative must be thoroughly refined and repeated consistently. Anything else can create confusion or worse.
I can’t tell you how many times, for example, I’ve gone to a trade show and listened to a presentation that is entirely different than what is being conveyed on the IR side — different highlights, different messaging, and even different looks. This is a miscue and a missed opportunity.
First, members of the professional investment community attend PR events. You risk muddying the waters with them or spurring them to poke holes in your identity through questions that PR representatives might not be prepared to handle. Second, you lose out on an important chance to establish or reinforce your company’s identity in the minds of attendees.
No, IR and PR should not — and cannot — tell the same story in the same way to their respective constituencies. But the underlying narrative should be the same. Any schism stands a good chance of widening during the course of time, making matters worse. You need only to tailor your story to each audience’s needs, not recreate the story wholesale.
2. Failing to collaborate is inefficient.
Let’s just presume that employees in both departments, IR and PR, are making valuable contributions. If they’re not collaborating, then they’re almost certainly duplicating each other’s efforts, at least to some extent.
Moreover, they’re producing ideas and materials that could be used for multiple purposes, if only one team knew what the other was doing. For example, let’s say IR invests the time and resources to generate a valuable presentation that highlights the company’s strategy, market positioning, pipeline, and guidance for future plans. Are you sure that PR is aware of that presentation’s existence? If not, they obviously can’t align messaging, nor leverage (and repurpose) content. Your organization, in other words, didn’t get full return on the investment. Making the most of your output in this area does not require a major organizational overhaul.
Some might conclude that the best way to address this issue is to consolidate IR and PR. I am not advocating for that. IR and PR pros have different skill sets, generally speaking, and they have their own expansive universes to attend to. IR reps almost certainly don’t know all of the players in the media world with whom PR deals, and the same goes for PR and the investment community. Both jobs are big ones that each demand dedicated staff.
Instead of consolidation, look to cultivate greater collaboration.
When working with a client, I bring the company’s IR and PR personnel together on a regular basis. In a conference call or in-person meeting, we collectively go over the upcoming calendar of events. What is each team working on? Are they preparing for upcoming events such as trade shows or product launches? And do any of these endeavors offer the opportunity for collaboration and cross-pollination?
One could make a compelling argument that the better solution is for IR and PR to be more of a top-down effort, starting at the C-level. But the reality is that both units tend to be more bottom-up, with projects percolating from lower levels of the organization. But short of that, consider having your IR and PR come together in a regular, meaningful way.
We at Westwicke routinely help companies like yours to maximize the contributions of IR and PR. Contact us for a conversation on how we can help you do the same.