Getting your act together and taking it on the road
The annual, semi-annual or even quarterly cruise through half a dozen Technimetrically-determined investment hot spots has become an annual, semi-annual, even quarterly rite of passage for IR professionals. These excursions require planning not unlike that which was necessary for the Norman invasion. Indeed, according to virtually all IROs and consultants queried for this article, there is no such thing as planning too much for a roadshow.
'The way I look at it, it's a constant battle against Murphy,' says Tim Russell, chairman of Investor Relations Support, a Boston firm which sets up investor and stockholder meetings and conferences. 'Most of the time I win, but once in a while I have to grade myself down for forgetting to check something like how the lighting works.'
Brian Rafferty, managing director of New York's Taylor Rafferty Associates, confirms that the key to a successful meeting away from home is sustaining just enough nervous energy to propel a Gulfstream across a continent. 'We're always like cats on a hot tin roof,' he says.
Road trips are so fraught with potential disaster that it's no wonder a significant cottage industry dedicated to avoiding head-on collisions has emerged. Today many IROs let these firms worry about the nitty-gritty details, like making sure the chicken is hot and the iced tea cold. This frees up the IRO to fret about the truly significant details, such as whether the slides are in the right order. Still, according to Murphy's law, if something can go wrong it inevitably will. The true test of a first-rate IR officer may in fact lie in his or her ability to roll with the many punches a road trip can – and will – throw, from lost luggage and misplaced slide carousels to inclement weather and irascible investors.
Dodging football
Although it may seem elementary, just checking the calendar for holidays before scheduling a trip is an essential first step. The second should be to query local residents about the significance and idiosyncracies of those holidays. Guy Stainer, IRO at the UK's Powergen, brought a group of executives to the US well aware that business is rarely, if ever, conducted on Thanks giving Day, but somewhat naive about the peculiar American custom of taking the Wednesday afternoon off the day before as travel time. Still, even the most cosmopolitan of world travelers could not have predicted the effect on attendance at a recent presentation by another company which coincided with a London subway strike and the first England game of the World Cup. There were 50 confirmed attendances; 20 showed up.
Transportation back-up plans are de rigeur. 'Go the night before,' advises Russell, who has more than once had clients who insisted on flying in just in time for the meeting but were grounded. Michael Bamforth, of Brusssels-based Kuhn Partners, recalls a swing through Switzerland that started with breakfast in Zurich and lunch in Geneva. But Zurich airport was closed, and it was too late to take a train or drive. So Bamforth commandeered a helicopter – and then had to convince the executives to get in it. Although the CFO refused, Bamforth and the IRO arrived just 20 minutes late and the show went on as planned.
Another tip is to confirm the address of the meeting. Russell recalls setting up a one-on-one meeting in Seattle. He and his client found the right office building only to have the elevator doors open on a completely deserted space – the money management company had moved the week before. For his part, Bamforth brought clients out to the offices of a company that had recently moved to an industrial park, only to discover that the move had been postponed. And Guy Stainer has found that some money managers have a penchant for working unexpectedly out of their home offices. 'We end up doing a telephone conference call,' he says.
Even the most detailed checklist cannot predict or prevent a fire alarm going off during a presentation, a phenomenon Russell has experienced twice in recent years. 'It pretty much kills the meeting,' he notes, since hotels won't turn alarms off until the firemen arrive and confirm it's a false alarm.
Rafferty's checklist includes confirming that any hotel construction activities near the meeting room are suspended during the meeting, though a solemn pledge by hotel management is not always enough. 'We set up a meeting for a new client at a high-end New York City hotel,' he recalls, 'and right in the middle of the presentation a jackhammer started in the room directly above us. I ran upstairs and started pounding on the door to make them stop, but they just ignored me.'
When he finally did get into the room, thanks to a cooperative chambermaid (and a small bribe), he found the foreman gone to lunch and the workers disinclined to take orders from a stranger. But he managed to convince them to hold off and returned to his meeting only to hear the jackhammer start up again.
'This was a particularly loud jackhammer,' he adds, though admits he probably heard it about 100 decibels louder than anyone else. Needless to say, that hotel is no longer on his shortlist of preferred meeting spots.
Bringing the house down
Still, the incident that takes the cake for Rafferty was the time the ceiling began to fall down in the middle of a presentation. Apparently the maintenance staff had papered and painted over a recent water leak. 'What was most interesting was watching the audience watching the ceiling slowly coming down right in front of the slide screen,' Rafferty remembers. Nobody was hurt; most were amused, and Rafferty 'raised hell with the hotel staff.'
While investors tend to be forgiving about the vagaries of weather and even technology, human foibles are somewhat tougher to deal with. For overseas treks, there are cultural and language hurdles to clear, not always so cleanly.
Amen & Associates senior VP Lawrence Parnell recalls a major French insurance company that kept asking him to get 'hostesses' for the receptions. Once Parnell figured out they were not talking about rounding up ladies of the night, he had the daunting assignment of explaining that it was not customary in the US to have models hand out financial literature at investment community meetings.
Senior executive arrogance has also thrown a monkey wrench into the best laid plans: one consultant tells of pleading with a CFO to bring his passport for a trip to the Bahamas. The CFO insisted he didn't need it and, as a result, was left at the boarding gate while his assistant got on the plane and subsequently conducted the meeting.
It might be easy to blame technology, but there was also human collusion when an entourage of Tim Russell's clients were wired for sound with portable Lavalliere microphones. When the first presenter finished he forgot to turn his mike off and spent the next several minutes muttering derogatory remarks about the next speaker. By the time Russell caught up with him, the damage had been done.
Allegedly sophisticated investors can throw management for a loop with unexpected questions. Bamforth cites the example of an elderly investor who wanted to know about the progress a pharmaceutical company was making in the area of a treatment for Alzheimer's. The CEO patiently explained this was not a research focus for the company. A few minutes later the same investor's hand shot up again. 'I was wondering if you could tell me about your drugs for Alzheimer's?'
Bamforth even offers a cautionary tale about the dangers of being too vigilant. Arriving at the hotel late the night before a recent breakfast meeting, he asked the concierge to point out the meeting room, made a note of it and retired to his room. In the morning he came down to make a final check and was dismayed that too many chairs had been set up, and there was a flip chart instead of a projector. He moved the chairs out himself and found someone to replace the flip chart, only to discover just seconds before his meeting that he was rearranging someone else's meeting room. The designated room for his client was next door – set up to specifications.