IT’S a strong word. I looked it up. According to the Free Dictionary mindlessness means “having no intelligent purpose, meaning, or direction.”
There is a lot of mindlessness in the investor relations profession today. Especially when it comes to how investor relations departments prioritize their agendas and how they conduct their affairs on the web.
Mindlessness has been safe. You can hide in the confusion it creates. Mindlessness is so confounding to observers it can almost pass for genius. There must be a reason they did what they did.
Like Microsoft. They must have a reason for producing three different iterations of the same annual report and proxy statement.
- One for their website.
- One for their registered shareholders, which they paid their transfer agent to produce.
- And one for their beneficial shareholders, which they paid Broadridge to produce.
Why did they do this? Surely, they have a reason. With the help of those vendors they paid good money to, they might point to a sentence in an SEC adopting release that they’ve mindlessly interpreted to mean that the SEC thinks needless replication is the way to go. Some smart lawyer might even chime in on their behalf.
Mindlessness means big business for some.
We do things, stupid things, things that make no objective sense, just because that’s how we’ve always done them, or because that’s what everyone else does. Or because we trust the wrong people.
We post big, bulky documents like proxy statements on the web with formats inherited from the printed document. They are colorless — black and white — because printing in color costs more money. Never mind that we are delivering the documents online, a medium where color is free. Yes, mindlessness.
A problem with mindlessness is that you can get away with it for a long time. All you have to do is ask how not being mindless is good for the bottom line. Why should you do something differently or better? What’s the payback for *not* being mindless? What’s the ROI?
I can’t answer that question, except to say that some people don’t need to ask why. They just know in their gut that they don’t like being mindless. They have an ethic that doesn’t permit conscious mediocrity.
We need to stop this nonsense. We need to stop our colleagues and help them think for themselves. Why are they paying thousands of dollars annually to Thomson Reuters to host corporate governance pages that change once per year at most? You could host those pages anywhere for mere pennies a month.
Are wire services the best way to publicize information under Regulation FD? No, they are not. There is no fairer method of disseminating material information than posting it on your website at a designated time. Yet there is only one US company I know of that is doing that.
The rest are mindlessly hurting their own status as a “recognized channel” by sending out long earnings releases via expensive wire services that arrive at different times on different sites, giving some investors a decided advantage to trade ahead of others. And this the IR profession does in the supposed interests of fairness. Mindlessness.
Mindlessness has reached epidemic proportions. As a profession, we are like drunks who think the person buying the next round is our best friend. We don’t want to analyze motives, question whether that next drink is really good for us.
Unfortunately, at some point this rote foolishness must blow up in our faces. That point, I believe, has come.
IR departments are facing a market where there are few investors. Budgets are being tightened. Indeed, questions are being asked about the necessity of even having an IR department.
This is all healthy. We need to stop and ask if there are better ways of doing things. Adversity drives innovation. It takes us out of our comfortable myopia and challenges us to be leaner, fitter and more intelligent.
Of course, there is a great sense of fear among those who have gotten fat on years on mindlessness. The wire services, the cookie-cutter IR website vendors, the overpriced lawyers, and yes, the blathering consultants. They will fight hard to protect what they have. Survival is the most primal of instincts.
But for those of us who revel in innovation, who work hard at trying to think outside of this profession’s very square box, who are willing to challenge the status quo, it is time to get to work.
There are many opportunities to do things better. New technologies are waiting to be deployed. The regulatory environment is more amenable to innovation than at any time I can remember. A new tone has come to the top of the most powerful country on the planet.
While others are filled with fear, I’m excited about the opportunities for our clients and for those good service providers who are creating truly innovative solutions that support IR departments and their investors.
Together I believe we will create something new and meaningful. You’re welcome to join us. Subscribe to our journal, join us on Twitter or start your own blog and let’s start talking about how web technologies can redefine the relationships between companies and their investors.
Good morning, Dominic. This is a very inspiring post for those that are thinking in terms of “new and meaningful IR opportunities” but I’m afraid it won’t have a big impact on the status quo.
I have no doubt about the fact that innovative IR solutions will completely change the landscape over the next 5 years – but that change will come from pioneers. Initially, it will be slow due to resistance and fear from current IR professionals – but a tipping point will be reached that leads to sweeping adoption of Web 2.0 technologies.
I speak from experience because this is what we went through in the small/micro-cap world. One can argue the other end of the spectrum will be faster to act but human nature can’t be changed.
In the meantime, keep pounding the point home. Internet usage trends are on your side and the day will come when you will be talking about great solutions rather than hoping for them.
Regards,
George
p.s. I notice my post was time stamped as “8:52 AM” when it was actually made at 7:52 AM. Your blog needs to re-set it’s clock
Dominic – I cannot agree with you more (in fact, I just recently blogged about some I considered to be the dumbest person in IR…). While you and I have a slight difference of opinion on press release dissemination, I completely agree with you that the status quo no longer workds.
Talk about mindless? How about all the IROs who continue to let sell-side analysts “give them free targeting”… have they still not figured out that the sell side is only chasing soft dollars by taking them to high trade volume/hedge fund managers? Talk about sheep to the slaughter!
Keep pushing the truth – status quo clearly no longer works!
I think MSFT has done some really interesting and innovative things over the year on their IR pages. It would be interesting to find out from them how this duplication happens. My guess is that since the Annual Report is just part of the non Microsoft sites (#2 and #3 on your list), the cost may just included as part of the overall service offered by those vendors. If that was the case it wouldn’t be mindless, but would instead just point to some inefficiences when working with multiple vendors that each need/want to use some of the same documents.
@George I can’t keep pounding without some help. Hope you’ll keep doing what you’re doing. (I’ve fixed the timestamps to compensate for daylight savings, thanks.)
@Rob Thanks, I loved your response to the NIRI annual report survey.
@Bill, you’re giving them too much credit. They didn’t think it through. Investor Central isn’t all that innovative.
Dominic, you can count on us to push even harder in 2009. Sitting in NYC as I speak, preparing to give the keynote IR speech tomorrow. Then, off to Vegas to discuss online IR with Chinese companies at another conference.
In addition, look for every client to have a Twitter IR feed in 2009, as well as, mobile IR feeds.
Demonstrating the actual deployment and use of Web 2.0 IR tools is the best way to educate IRO’s and knockdown any fears they may have.
Meet you at the top of the mountain fellow Sherpa!
Regards,
George
Hi Dominic,
When I wrote that I liked some of the things MSFT has done over the years I was actually thinking back a ways further to late 90’s and early 2000’s when their site was one of the few to have exports to excel / word, etc. I’m not working directly in IR these days so I hadn’t seen Investor Central but just checked it out and think it’s pretty interesting.
My main point is that I think it would be interesting to get their input on how the duplication happens. And my guess is that with more information on how it happens, that it might point to inefficiences on the web where vendors duplicate different things as part of bundled service vs. an intentional duplication on the part of MSFT.
P.S. I don’t work at MSFT or hold any stock in MSFT but I have used their web site in the past when I was doing research on them.
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