"Stories exert a powerful influence on human thoughts and behavior. They consolidate memory, shape emotions, cue heuristics and biases in judgment...”
Storytelling is a lost art in the business world.(1) No place is this more apparent than within the realm of investor relations (IR), where finance executives and their legal advisers now manage the narrative for investors at many companies.(2) It’s fair to say that as bright as these seasoned professionals may be, trained corporate storytellers they most often are not.
The exposure this shortcoming creates for companies can be significant. For one thing, it can prevent a company from maximizing its valuecreation potential. According to Rivel Research, buy-side investors will pay a median premium of 10 percent to those companies that employ effective IR, while discounting a company a median of 20 percent for ineffective IR.(3) Among other things, effective IR is said to provide investors with insight into a company’s growth potential and the strategy by which it will achieve this growth.(4) In other words, investors will reward those companies that develop and nurture what we refer to as an “investment brand” through effective corporate storytelling...
1 “3 Reasons to Master the Art of Storytelling,” Inc.
April 9, 2012
2 Rivel Research, 2013
4 “Boardrooms Rethink Tactics to Defang Activist
Investors,” DealBook/The New York Times,
November 11, 2013