published work
Managing expectations
Among the biggest challenges corporate communicators face in providing counsel to senior executives is the management of expectations, particularly in small public companies.
Three specific sectors stand out: mining exploration, biotech and technology (MBT for short). Usually the CEOs and senior managers of MBT firms are geologists, scientists or engineers. Many have been forced into IPOs to finance long and expensive development or exploration programs. Often their investors are speculators looking for a quick profit, and are neither interested nor care about the longer term prospects of the company. Stock prices literally yo-yo on the flimsiest news – or lack of news – and CEOs react accordingly.
Typically, “investor relations’’ consultants are brought in early to move the stock. Corporate communications tends to involve little more than issuing regulatory news releases laden with drill or test results in jargon than anyone without a PhD in geophysics or molecular biology would struggle to comprehend. Of course there are also the conferences and trade shows where firms jostle with hundreds of their competitors for the eyes and ears of the industry influencers – analysts, potential partners, venture cap investors and the media.
Communications efforts in many of these small MBTs are driven by the CEO, the CFO or perhaps a relatively junior communications manager with little or no experience and no input at a strategic business level.
So what happens when share values languish and the companies can’t attract the mainstream news media coverage they believe their efforts deserve and which they think will propel them to higher marketcaps? They often hire a corporate communications specialist and expect nothing less than a magic bullet.
Faced with such circumstances where should a communicator begin?
The initial discussions with the CEO should be more about psychology than communications. Short of finding a cure for cancer or discovering the next Voisey’s Bay, there is no quick fix to raising corporate profile and attracting investor interest, and it’s crucial for CEOs to understand and accept that before moving forward. Media coverage is nice to have, but it’s not what corporate communications is about and no savvy investor will be fooled into believing a company is doing well based solely on media coverage.
In fact one of the best recommendations a new corporate communications manager can give the CEO of an emerging MBT company is to forget about media coverage, at least for the time being. Obviously firms must continue to issue news releases to meet regulatory requirements, and sometimes they are picked up and published, but they should regard that as a bonus not a right.
They should focus instead on developing a proper communications program aligned to their business plan and develop a solid “story”: who are we, where are we going and how are we going to get there?
Many MBTs believe they are unique, but very few are. In the end they are all chasing a relatively small pool of investor dollars, and it’s a buyers’ market. To stand out above the crowd they have to differentiate themselves, and the easiest way to do so is to tell their story clearly and unambiguously in words that regular people (i.e. not only scientists, engineers and geologists) can understand.
But a word of caution; it can’t be just a happy face story that glosses over or ignores the difficulties and challenges the company faces in achieving its goals (and most MBTs have many). Any serious investor – or journalist for that matter – who may be attracted to the company will do due diligence and find the warts, so deal with them upfront in a transparent and credible way.
A useful tool for laying the ground work of a corporate communications plan is the force field analysis process in a half day workshop with senior management team and key directors. Developed several decades ago by German social scientist, Kurt Lewin, the force field process remains a simple and effective tool for diagnosing situations and building teams. It can be used in corporate communications planning to achieve consensus among managers on the key strengths (driving forces) propelling the company towards its goals as well as the weaknesses (restraining forces) that are potential barriers to success.
In tandem with developing a credible story it is important to broaden management support for the corporate communications program. Senior VPs in MBTs are usually scientists, engineers and geologists focused on very specific discovery-oriented goals. They may resent the use of scarce funds on something of such seemingly intangible value as corporate communications. Therefore, it’s important to include them in the process and demonstrate how corporate communications will help them tell stakeholders what they are doing to achieve the company’s goals.
Then, with story in hand, MBTs must tell it to the people who have the most influence on whether they succeed or fail. But first they need to identify those influencers and develop a program to communicate with them. Quite often MBT firms don’t have a good understanding of the full spectrum of key stakeholders or what influence they can have on the company’s fortunes.
Obviously the mainstream news media are an important channel for communicating with stakeholders, but they are not the only one, and in the case of most MBTs not the most important one either. Often a personalized approach, such as calls by the CEO to key stakeholders, will have more impact, but only if the communication itself is impactful, and that’s where we come back to the company’s story. Keeping investors on board and analysts interested requires not only that the company demonstrate genuine progress by meeting its milestones, but also that it communicate the progress in a way that builds credibility and enhances reputation.
CEOs of MBT companies also need to understand and accept that it requires time, patience and adequate resources to develop and implement an effective long-term corporate communications program, and it must be part of the business plan, not a separate program independent of the company’s overall performance.
In other words, run the company according to the business plan, focus on building credibility and enhancing reputation. Communicate clearly and frequently with key stakeholders and the market – and the media – will follow.