Just how to measure IR success is a bit of a mess.\u00a0 We have already noted how measuring success as a function of the stock price isn\u2019t an useful measure.\u00a0 The other commonly implemented measurements aren\u2019t necessarily pretty either.<\/p>\n
There is the school of thought that advocates Public Relations style measurements.\u00a0 This could be something along the lines of counting the number of positive press stories and comments versus the negative.\u00a0 Of course, this is not tidy even for PR divisions who also need to deduce the \u201cvalue\u201d or \u201cimpact\u201d of those items so as to not overweigh insignificant events by using just raw numbers.\u00a0 It is doubly difficult for Investor Relations departments who would also need a way to quantify just how \u201cinvestment related\u201d each story was in addition to how big the story was.<\/p>\n
More importantly, there is some disagreement as to just how much IR is like Public Relations.<\/p>\n
Consider that most public relations departments are expected to build up relationships with individual members of the media, as well as with various media outlets.\u00a0 These relationships can then use leverage both to spread information on behalf of the company and to get an \u201cadvanced\u201d notice of information that may be forthcoming regarding the company.<\/p>\n
But, most investor relations departments are actually tasked not with building relations with the media, but rather with shareholders and analysts.\u00a0 Because the fundamental goal of each department\u2019s relationship building is different so too should the measurements be different.<\/p>\n
In what way can the success of an Investor Relations department objectives be measured?\u00a0 The answer lies within the objectives themselves.\u00a0 <\/p>\n Ironically, it seems that the overall department objectives can be fuzzy at certain companies, but the objectives for specific positions within the IR department are relatively firm.\u00a0 A review of recent high-level IR postings on Monster.com reveals several common themes.\u00a0 From those, we can extrapolate meaningful benchmarks and measurements of effectiveness.<\/p>\n Common IR Objectives<\/em>:<\/p>\n To effectively measure the performance of an IR department then, is to measure the effectiveness of the unit at carrying out these various tasks.\u00a0 At first, this may appear as nebulous as before, but relatively hard data can be easily obtained by breaking down the objectives and determining what a positive outcome would look like.<\/p>\n For example, the first objective is to respond to requests for information.\u00a0 A simple tracking system that logs a timestamp for the request, as well as the response (and if necessary, the follow up) allows an at a glance look at how timely responses are.\u00a0 Are investor emails answered within 24 hours, or within one week, or maybe never?\u00a0 Are analysts requests for data responded to within hours, days, weeks?\u00a0 Does the response satisfy the inquiry, or are additional inquiries regarding the same information made, suggesting that the response was not fully adequate?<\/p>\n Investor materials can be archived and reviewed periodically to see how they not only provided the relevant education (surveys of those who received the materials can be helpful for determining this), but also how they compare to similar materials distributed by competitors and other publicly traded companies in general.<\/p>\n Analyst materials can be judged by observing analyst pronouncements and releases and then asking company insiders what if any information they think is flawed and what data would, if provided, counter-balance such claims.\u00a0 If IR indeed provided the data or materials (whether the analyst took them into account or not) this would justify positive marks.\u00a0 While the failure to include such data would justify the need for improvement.<\/p>\n Competitive intelligence could be judged similarly by noting where competitors are perceived as being more or less superior to the company and then ensuring that materials that weaken the \u2018more superior\u2019 argument are indeed within the materials while those that justify the \u2018less superior\u2019 areas are included.<\/p>\n The remaining three objectives are less promising ways of finding \u201chard\u201d objectives, but are useful none the less.\u00a0 Did the IR department maintain the acceptable frequency of communications with important shareholders whether they did or did not take any actions regarding the stock?\u00a0\u00a0 Were large changes in holdings sufficiently anticipated by the IR group?\u00a0 Were analyst actions anticipated or were the company and its investors blind sided?<\/p>\n High performance on these benchmarks, by definition, connotes high performance in the duty to promote the purchase and retention of company stock regardless of the share price.<\/p>\n So, as the year begins, take stock (Hah!) of your department\u2019s goals and objectives, as well as your own and strategize for the coming year.\u00a0 Which of these objectives currently lacks a reportable metric?\u00a0 Which of them are not tracked at all?\u00a0 Improve on the goals and objectives and improvement within IR will follow.<\/p>\n","protected":false},"excerpt":{"rendered":" Find solid and achievable objectives to use in 2009 and the improved peformance of the IR department will follow.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[9,3],"tags":[8246,75,87],"class_list":{"0":"post-3493","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-best-practices","7":"category-investor","8":"tag-best-practices","9":"tag-investor-relations","10":"tag-measurement","11":"entry"},"yoast_head":"\n![\"goal-gold-star\"](\"https:\/\/www.corporate-eye.com\/main\/wp-content\/uploads\/2009\/01\/goalgoldstar-thumb.jpg\")
Measuring IR Effectiveness<\/strong><\/p>\n\n