In this episode, host Carmen Lilly dives into communication strategies and explores emerging technologies leveraging Natural Language Processing and AI. Whether you are communicating earnings results, risks, or the pathway to profitability, keeping your message clear, concise and tailored to your audience is an essential skill for an IRO. Marc Dreschler, Senior Principal at management consulting firm, Myriant provides actionable insights for IR professionals who act as their company’s bullhorn.
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Hey, everyone. Welcome to the IR in Focus podcast. I'm your host, Carmen Lilly. In these next 20 minutes, we'll dive into communication strategies and touch on emerging technologies, leveraging natural language processing and AI. Whether you're communicating earnings results, risks or the pathway to profitability, keeping your message clear, concise and tailored to your audience is an essential scale for an IRO.
However, we all know that this task is easier said than done. I'm pleased to have Marc Dreschler from management consulting firm, Myriant, as our expert today to break it down with actual insights for IR professionals who act as their company's bullhorn. Welcome, Marc.
Carmen, thank you for inviting me.
You have more than three decades in the business, I wanted you just to hit some of your highlights. What do you want our listeners to know about you?
Sure. So as you can probably tell from my accent, I was not born and raised in New Jersey. Actually, I came over to the United States from Germany in 1987. That's how far back that goes, on a student exchange. Liked it here so much. So got my first gig after college on Wall Street for a German bank called Commerzbank, which is the second-largest commercial bank in Germany, at their New York office.
And I started my career in trading. So that was on the FX, foreign exchange, currencies trading floor back in the day. And in 1997, I had the chance to venture into something that was completely new for me at the time, which was investor relations and financial communications for a company called Citigate Dewe Rogerson. And they were really known for all the big privatizations that they worked on of the British government.
And I worked in the German office, which was privy to some of sort of the largest privatizations that the Federal Republic of Germany, that the government, really did in the late '90s and early 2000s. So think of Deutsche Telekom, which is T-Mobile over here; Deutsche Post, which bought DHL over in the United States; the Frankfurt Airport.
So all of these different assets of the German government that went public. And that was sort of my intro, if you want, into the world of investor relations and financial communications and had different stints at different places. And one of them, of course, was Ketchum, one of the largest global agencies that invested and merged with a company in Germany.
And later on, in 2011, I was fortunate enough that they asked me to run their financial comps, practice out of the New York office, which is the headquarter. It's an Omnicom firm. And I've been now with IPG, Interpublic Group and Weber Shandwick since 2018, running their capital markets practice. So a long way of saying a lot of clients along the way of IPOs, investor relations programs, special situations.
You mentioned a couple of these things. And yes, it just keeps getting more and more interesting each year with all the different challenges that we have and interesting opportunities that we have, with new investors coming on board and new technology, of course. And everything that's going on around the world that our clients are exposed to.
Yes. There's so much information out there right now that folks have to react to. Thank you for sharing some of that rich history that you have and kind of your pathway to working with IROs. The first question here for you, you have a new client, you signed up a new client. Take us through some of the basics and how you approach developing a communication strategy for them.
When we are thinking about a communication strategy for our client, the first question we ask is, is this a special assignment, which oftentimes it is, right. Whether that's a transaction-related assignment. Sometimes, there can be a special situation that we get pulled into or whether that's sort of building a long-term reputation and IR program and supporting on that.
And then sort of from that, of course, we want to make sure that the communication strategy really led us up to the overall business strategy and plays into that. And what that means is making sure that we understand what the objectives are for the client, that we match that with the context of the organizations, the peers -- the peer group of the organization that we are working with.
And then, of course, making sure that the program is not isolated, right, just to investors. And investors, as you know, come in so many different flavors already, but that it's embedded and integrated in the broader communications program. So we think really of every strategic program that we are fortunate to partner with our clients on in a holistic fashion.
Because all financial communications really do ladder back up to all the different audiences and stakeholders that the organization touches, right? And then we want to make sure that we bring sort of the right data, the right insights to our clients to arm with decisions that make sense in terms of their communications strategy.
I would like to unpack a couple of those things there. One of the biggest communication issues that I've seen in the corporate world is the practice of what some folks would call deceptive marketing. One prominent incurring example of this that you see in the news.
A lot of greenwashing, where some of those companies are attempting to capitalize on the swell and interest for information regarding a company's sustainability practices. How do you avoid that temptation of the short-term reactionary communication and ensure what sort of communication strategy and program that you're building for them are aligned with the client's overall long-term business objectives?
Yes. I think you already mentioned it, the second piece is key, right? We do want to make sure that we bring to bear proactively the communications, the narrative or storylines, right, that really pay off and led up to the strategy that the organization or the client has. I'm not jumping on every bandwagon. I think that's a challenge, of course.
And we want to make sure that clients really tell the story that they can back up with meaningful actions, right, and not fall into the trap of communicating anything that is really outside of that comfort zone, if you want. Because if actions are not connected to the communications, there's a chance that they can fall flat, right?
So we want to make sure that, that is connected. And then, I think you have to be mindful of the environment that you're in, especially now more than ever. There is so much information out there, so many platforms. So you want to pick the spots that you think are valuable to your stakeholders, right? And your audiences that you want to be seen and want to be heard from.
So making sure that you really operate in the sweet spot of the stakeholders that matter to you. And then of course, you can sort of build up more of a profile as you launch more actions that are aligned with your purpose and your values and really what the organization is passionate about.
Communication really needs to be connected with actions. And I imagine if that's not the case, and if it doesn't align with your company's strategy that you could risk reputational risks there as well. Let's go back to a little bit more about like how you build that communication strategy for a client. Can you tell me, what role does research and data play into developing those communication strategies? And how do you gather and analyze that data?
Yes. Data and insights, of course, are critical to any communications strategy. There are insights, right, that are not out there prominently in the public domain or that some of your stakeholders are not aware of. But one of our partners, of course, is S&P Global Market Intelligence, and the listening tools, right, that they have developed around perception studies, rapid insights of investors, I think playing that back to our clients with -- here's sort of where the expectations are and where the void is.
Or sometimes we call it the white space, where we need to move the needle to bring some new insights to our audiences, that can be key and is, of course, very, very important to our -- not only to our clients, but it's also important to get that data out and shared with audiences in a timely manner.
I'm so glad you brought that up because you can't escape a conversation these days without someone talking about the rise in AI, like chat GPT, for example, it's all over the place. And we've seen natural language processing also kind of emerge as part of this AI trend. I wanted you to kind of expand on how you stay up to date on some of these latest communication trends? And how do you kind of fold those back into your best practices?
Yes. I think where we have a lot of new tools that we are deploying is definitely in the AI sector, for sure. I think we are really good now getting in conversations and uncovering conversations that we really weren't privy to several years back. So I would say that our place is really at the forefront of some of these technologies.
And it's really interesting, of course, that in social media, right, you have a lot of different voices, a lot of different audiences sometimes propelling their own agenda. And I think it's important for organizations to know kind of what they are walking into and where sort of the fault lines are of conversations.
So I think from that perspective, it's really important to read the tea leaves, right? What is -- what context you're up against on a particular issue. I think that's the goal. And that's why some of these tools, of course, can be very, very helpful in making sure that we are aiming for consistency and for clarity.
An IR professional has to go out and talk to various folks who can hail from different types of financial backgrounds and financial proficiencies. Can you go a little bit more specific for us in terms of how you have tailored communication strategies in the past that really resonate with specific or various target audiences?
Yes. Well, I'll give you an example. So I was part of the team that advised Malaysia Airlines for their first general meeting with shareholders and your meeting after the plane went missing in, I think it was 2014. And it was a tough moment, of course, in time for all the tragic reasons. But for the management team, specifically, right, to get in front of their shareholder base, that was really tough.
And I mentioned this as an example because I think not everything comes down to just the data that you have at hand, but it's also really the broader context. And this airline, of course, is a national treasure to this day. And at that particular moment in time, there was a big restructuring going on and some of the shareholders who were pensioners, really, of the company and had sort of invested with the company for a long time.
We met in this arena with a couple of hundred people. It was, I think, almost like 1,000 folks were there. And one of the things that we advised was to really also take time to acknowledge that particular occasion. And the CEO, Aj, at the time, he built into his cadence and speech to open up the annual meeting with a moment of silence -- a minute of silence.
And at that moment, I remember that, that really was such a sort of powerful moment for everybody in the room also to acknowledge that while the financials of the company, of course, were in focus of that day and were impaired, we knew that there was also this really emotional element connected to it, of course.
And I think it set the tone for the meeting. And that's why I'm always up for making sure that you really understand the context that you're in, that it's not just about the data points and what are you going to do. And what is your strategy in fixing certain things and making progress on the financials, but also acknowledging some basic humanitarian almost things along the way, too.
Well, I'm really blown away. I had no idea you were involved in that. So a little bit more about crisis communication there and bringing in the human element. Sometimes bad things happen. It's inevitable. So tell me how do you approach crisis communications? So you talked a little bit like bringing in the human element. What are some other key principles that guide your approach?
Well, I think one of the things that we tell clients is you kind of have to acknowledge, of course, whatever happened in the crisis, but that's in the past. And the only thing that you then can control going forward is your response. And oftentimes, in a crisis, you will be remembered for how you responded. There's almost no transaction that I've ever been a part of, where there isn't sort of a small crisis element involved in it, right?
Because some of the things you just cannot predict. You can have the greatest strategy in the world for raising capital, for example, right? And then maybe on the day that you price, you have something happening in the market that you really couldn't predict. So dealing with that, responding well and sort of focusing on the long-term opportunities is really important.
How do you ensure that those different communication strategies -- so hey, we've gone to the market, we said this thing, it aligns with the overall company and corporate strategy. How do you advise clients of that, what they've said and gone to market with, is actually integrated across the different channels and touch points within the company?
Yes. I think what you try to do is really go through all the different stakeholders and their expectations, right. I'll give you an example. If you do an M&A deal, I think you have to think through, not only how is the financial community and investors, analysts, the buy side, sell side, how are they all going to react to a potential acquisition announcement when it comes to price and synergies and all of these different things.
But you really have to think through the cultural elements of the deal, too, right. Are Larry and Amy going to work together well in the future, right? What are the sort of pain points that you have in terms of getting new customers, right? What are things that you have to think through on the regulatory track? What are things that you have to think through between two different management teams, right? And how do you divide and conquer certain aspects of the business in the future?
So going through each audience and each stakeholder with their expectations and sort of making sure that you're tracking also against their expectation, again, its context, is an important task and can give you good cues where are certain communications, pain points and challenges going to pop up along the way. And then can you already prepare as much in advance as you can to address these issues proactively before they might even pop up and become issues?
What sort of metrics do you use to measure success of a communication strategy? And like how do you, in turn, kind of present those metrics to clients?
Yes. So I am -- sometimes I say I'm unfortunate but fortunate in the at least capital markets. We usually have data points that are pretty quick and react to communications pretty quickly. So whether that's the stock price, right, whether that's anything on the creditor side in terms of the bonds that you have out there, you have instant feedback loops. And there's not one sort of one-size-fits-all solution out there.
But if you collect all these different data points and put it into a dashboard that is meaningful to the leadership team, and it's connected again and shows you where you have some work to do and where there are also questions that you need to address. So I think in terms of data points, there's a lot that you can collect these days that give you a good overview of reputation, of feedback from the capital markets and all of that.
Yes. One of the things that I think is funny is when folks talk about like AI taking jobs. So like -- but interacting with people is my favorite part of my job here. You can't take that away from me, never.
No, no. Let's not. Let's please not do that.
Please don't. Okay, so thank you so much, Marc, for this conversation. I'd like to close out each podcast episode with a final word from our expert. So what is one actual insight you'd like IR departments or IROs to walk away with on investor communication?
The one thing is, don't think of IR as sort of a siloed off universe or job. I think the wonderful thing about IRs, it touches so many different stakeholders and functions within organizations and outside, right? It's probably also the reason why IROs come from so many different disciplines because it's so kind of widespread in terms of what you need to know, what you need to have experience in.
But I think it works best when IR, the broader sort of corporate comms team, when employee communications, when all of these things are integrated and singing off the same hymn sheet and sometimes have the feeling, the IR department, of course, sits on more financial data and speaks the language of Wall Street, while the corporate comp side might be more well versed in storytelling. But bringing both of that together is, to me, the optimal way to work with all different stakeholders and bringing them on a journey.
All right. Well, thank you, Marc. Thank you very much for joining us today. And to our listeners, I hope you found valuable insights throughout this discussion. And I hope you tune in next month. Have a good day ahead.
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