Recognising Innovation in Investor Relations

Thursday, January 28, 2016

According to Harvard Business Review, the conversation surrounding enterprise innovation seems to have taken a paradigm shift from the “how” to the “who”. While innovative work processes and methodologies continue to underpin an organisation’s point of inflection in staying relevant, boosting one’s capabilities similarly come under scrutiny.

So what and how exactly can you innovate in your professional line of work? Investor relation consultants like us, appears to be just another molecule within the ecosystem of the financial market. With precedence established in the modes of execution for most professional work, innovation needs to stem from a different dimension – internally from a bottom-up approach.
  • Affinity for science and art
    • The element of science lies in carrying out a quality and detailed analysis of a company’s operational and financial performances; this ranges from understanding the business and its competitive advantages to deciphering P&L and cash flow statements
    • Next comes the art of valuing a company, attributing the scientific findings from above to relevant valuation metrics to arrive at the intrinsic value of a company
  • Concept of triangulation
    • Understanding and managing the expectations of different stakeholders of the value-chain – sell-side analysts, funds, media and most importantly the management
    • The market intelligence received can then be worked into crafting a unique positioning for the company, to be supported by key messages
    • Qualitative evidence differentiates a company but providing quantitative evidence validates the investment thesis and reinforces conviction
  • Acting in the face of ambiguity vs upward delegation
    • While there are standard operating procedures for most practices, situational developments call for immediate ad-hoc counsel and actions
    • It is believed that those closest to the action will always have the best hunch so take ownership and act professionally on a case-by-case basis without over-reliance on upward delegation for confirmation
  • Inculcating diversify, embracing inclusivity
    • All professionals work as a team and it is important to have individuals from diverse backgrounds to foster a balanced team from various dimensions
    • Learning to be inclusive bridges cultural differences and leveraging on each other’s strengths may spark the creation of new initiatives towards problem-solving
  • Fulfilling the role of Problem-Solver
    • There is no single best practice as no two problems are the same; progress beyond identifying the problems and value-add by providing relevant solutions to address the core
  • Going digital - shifting from offline to online platforms
    • While the five points above outline a fundamental bottom-up approach to recognising innovation just like a financial model would, it is imperative for investor relations work to progress from offline to online platforms to increase exposure and awareness
While companies consistently demand change to stay relevant, it is paramount to remain focused on the basics and devise new innovative methods and thought processes to value-add. Venturing towards digital outreach is but one of the few methods which essentially creates a new norm for the industry.
Indeed, innovation seems like a buzzword in the corporate scene but it has to be translated into more than just a PR gimmick. Demanding more than a sense of purpose and ability to undertake ownership, it is critical for an investor relations consultant to first understand the core values of the profession. With a clear appreciation of one’s capacity to innovate and value-add can he or she impart both tangible and intangible value creation for companies. Notwithstanding measurable metrics such as improving share price performance, the immediate availability of market intelligence at your finger-tips calls for more than your usual investor relations.

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