As the year comes to a close, people everywhere are looking ahead to 2015 and speculating what will happen. Will biotech valuations continue to soar? What role will hedge funds play? How will the healthcare market abroad influence the market at home?
While we contemplate these questions and work with companies to plan for 2015, we’re also taking time to reflect on 2014 — and lessons learned from what has been a rollercoaster ride of a year. Here, I share insights from some of our conversations and tips to take with you as you inch closer to the new year.
Less is more.
One thing that became abundantly clear in 2014 is that everyone is busy and maxed out on information overload. If you really want your key messages to be heard, focus on the two or three things you want to make sure investors take away from your communications. The more “padding” you throw in, the less people are going to hear. Worse yet, they may focus on the wrong things. No one will penalize you for a shorter conference call script or fewer slides in your presentation. In fact, they may thank you.
Spelling it out in prepared remarks doesn’t mean the analysts will hear you.
Throughout the year, many of our clients needed to communicate particular information to Wall Street on their quarterly conference calls. We had more than one management team try to telegraph this information to the analyst community through carefully scripted comments. Sometimes, the message was heard loud and clear. Other times, it fell on deaf ears. This discrepancy underscores the importance of following up with analysts after an earnings call to answer questions — all while (of course) staying within the guidelines of Regulation Fair Disclosure.
Be conservative, transparent.
This year made it clear that management teams need to approach financial guidance with an emphasis on conservatism and transparency. The market values a realistic, conservative view of the expected trends in your business and appreciates a clear presentation of these expectations, along with the key drivers of growth and/or profitability supporting the guidance.
There is no shortcut to gaining visibility.
Plenty of investor relations firms out there promise companies they can attract Wall Street attention, many with new websites, databases, and email lists. Visibility is still gained the old-fashioned way — getting on the road to meet people, going to conferences, and working hard to set up meetings. The healthcare space is crowded, with many companies competing for attention, so it’s crucial to put in the time it takes to connect face-to-face.
A strategic plan is vital.
There is no substitute for a solid strategic plan. Managing and effectively running a public company is often hectic, time-consuming, demanding, challenging — and believe it or not, often fun. It is our belief that in order to have the most potential for fun, you should stick to a well-conceived strategic plan.
As the CEO or CFO of a publicly-traded company, you will have many competing interests for your time and attention. If you have no plan in place, you will likely spend your time putting out daily forest fires. Conversely, if you spend time in advance anticipating the strategic needs of your company, you will have a roadmap to guide your decisions throughout the year — and more time to enjoy running the company.
2014 was a dynamic year — and ripe with lessons learned for management teams, IR experts, and investors alike. Keep these insights in mind as you forge ahead, and find more good information in my colleague Mark Klausner’s recent blog post, “Tips for Planning Your 2015 Investor Relations Strategy.”