Friday, June 24, 2011

Golf and Investor Relations

Mark Twain famously called golf “A good walk spoiled”. I was reminded of this because last weekend I returned to playing golf after a ten-year hiatus. In between swings of the golf club (of which there were many), I got to thinking about what investor relations practitioners can learn from the game of golf. So, hard on the heels of a discussion of the infield fly rule and IR (May 25, 2011), here are some of the thoughts that popped into my head about how golf resembles IR.

First, the more people you have, the longer the process takes. A twosome in golf plays more quickly than a foursome. In investor relations, if you are drafting documents, a large group takes much more time writing, editing and revising than a small group. While in a normal quarterly release process, this doesn’t matter too much, except to raise the blood pressure of the investor relations officer that has to try and write clear concise prose after the securities lawyer, the accountants, the general counsel, the CEO and the operations people have had their say, it becomes much more important when faced with a crisis situation when speed is essential. So when you need to get a release or a response out quickly, have a smaller designated group lined up for those exceptional circumstances. To many businessmen, this is counter-intuitive, as they are used to solving issues by throwing more bodies at the problem.

A corollary to this is that you are only as speedy as your slowest player. If you are out on the course and have one player who is constantly searching for their ball, or taking eight or nine practice swings before hitting the ball, everyone has to wait. Similarly, in the editing process, if you have one person who is consistently late in sending in edits, the entire process slows down.

Both golf and investor relations have their own coded clichés designed to blunt the impact of bad news that we can pull out at a moment’s notice. For example, in golf, when you say, “You’re on the beach”, it refers to your having landed in the sand trap; not to taking a quick refreshing break at the seaside. Similarly, in business, the phrase, “He left to spend more time with his family” does not really mean that the person in question wants to become more of a family person; rather it means he was fired and the company does not want to tell you the real reason the executive was let go.

Finally, both golf and investor relations are governed by sets of complicated and arcane rules that can get you into trouble if you’re not careful. It’s important to know the rules and abide by them – in golf, no one wants to play with a cheater, whereas in investor relations, your reputation for honesty and integrity are of paramount importance. Interestingly, in both golf and investor relations, the primary means of enforcement is self policing, although there are notable exceptions. Golf pros are bedeviled by people watching on TV who will call the PGA if they think there has been the slightest rules infraction, and in investor relations the plaintiff’s bar is always willing to second guess disclosure issues if the company’s stock price goes down.

Well, that’s it for now – you don’t want to overdo these analogies. Besides, I need to go practice my swing – it could be that I will play another round before ten years is up.

1 comment:

Baron Von D'Lucci said...

Greetings John - interesting post. I liked the analogies. What made you want to 'spoil' your walks after ten years? I remember you once resolved to never drink beer at frat parties when you were at WP. Was this also the result of an old resolution? Hope you are enjoying it. It can be a cruel game. Take care
Chris Duggan