Fasken
Thanks for joining me today Smooch.
Repovich Rosenberg
Well, you're welcome. Thanks for asking me to be a part of your Winning IR podcast. It's exciting
Fasken
Yeah we're excited to. So kind of jumping into things. The goal of today's conversation is to talk about the habits of high performing IROs, which you have a lot of experience in. So the first question I'd written down here is, this year, we've seen a lot of volatility and uncertainty in the markets, really forcing management teams and IROs to make a lot of changes. What does the current career market look like for investor relations?
Repovich Rosenberg
Well, Mark, you're right. There's been tremendous shifts in the IR profession since the pandemic started. And now after two and a half years of these seismic shifts, things are starting to settle down. But I will tell you, the current market for IROs, as a result of the pandemic and the many changes in mindsets that management teams and boards had, is their role has been elevated tremendously to new levels of respect and importance, frankly, to both management teams and boards.
Fasken
Do you think that the expectations have changed a lot for investor relations professionals as a result?
Repovich Rosenberg
Hugely, I can tell you without question, in the first few years of the pandemic, we conducted more confidential searches where there was a sitting IRO in place than we have done in the prior 10 years. And a lot of that, I think, happened, Mark, because, you know, nobody could see around corners to know a pandemic was going to hit and everybody was leveled on the same playing field. And once CEOs got their employment forces stabilized and kind of focused on the business, CEOs and boards stepped back and said, "Okay, we're not going to be in this pandemic forever. We do not know when the pivot is going to happen. But we need to start assessing now that we have the right people in the right chairs to create a strategy so when the pivot starts, we're ready to launch immediately." And one of the key roles in that conversation is the IRO because of their stewardship of the relationship with the investment community.
And there were a tremendous number of good IR leaders, but not great IR leaders, hence the confidential searches. And so we saw this up-leveling of expectations of the person leading the function, which, frankly you know, I am pleased to see, because I think that it should have been elevated higher a long time ago. And I think there has been a very clear validation, that the IRO is a key part of the conversation, not just with the investment community, but about all business decisions.
Fasken
Yeah, ya know, it's interesting, you were saying that the expectations have really changed. I mean, obviously, you see that a lot in terms of just all the things that investor relations folks have to think about these days. I mean, you've got ESG, and you've got activism. And I mean, there's just a lot of different topics for them to cover. We talked about this changing of expectations, what are some of the common threads you see amongst your clients in terms of what they want or need today? What are some of those, you talk a lot about unique leadership attributes, which I've really enjoyed learning more about. But what are some of the unique leadership attributes that stand out? In prospective candidates?
Repovich Rosenberg
There's a, the multi-dimensional answer to that, because there's a lot of them. So let me pick the top two that I think are really, let's hone in on those. First of all, all of our clients even pre pandemic wanted candidates and talent in the top 20%. I would say that today, the two most important components of that are organizational influence, intellectual curiosity and a continuous improvement mindset. You know, organizational influence, I've talked for decades about this concept of the corporate athlete. So an IR executive brings the technical competencies to meet or exceed expectations of doing the role. But they also bring broad business acumen where they can have a viewpoint, Mark, about all topics across the corporation, whether it's IT, HR operations, and that comes from intellectual curiosity and the desire to really learn a company from the inside out. CEOs and CFOs want that business partner in their IRO. And nobody really talks about that except my team and I do, I think that's really important if you want to be viewed as part of the C suite, even though technically, you report into the CFO who's part of the C suite, you have to have a command of broad business acumen.
Fasken
So it's a deep understanding of the business, right, and being able to go and manage those conversations with investors or whatnot, on your own and have the executive team feel confident that you can handle those well.
Repovich Rosenberg
That's one dimension of it. Yes. I think also organizational influence sprouts directly from your interest in the overall well being of the enterprise. And how do you develop that? You build relationships across the enterprise. And while you can do that in a limited way, just about IR topics, I think you have to do it beyond that. It's kind of a little bit of that “one for all, all for one headset”, that you're going to become that individual who other people look to with respect. And they look to for guidance.
Fasken
Right. Okay. Yeah, that makes sense. And so one of the challenging things is, how do you uncover these these qualities or these attributes in candidates? So you're looking for high performers and interviewing candidates constantly? What is one of the most important questions that you ask candidates?
Repovich Rosenberg
That's such a great question Mark, because my interview style is radically different from other recruiters or executive search consultants, you know, I view myself as a human capital expert. And I have a whole team of people who evaluate the technical competencies of an IRO because those are table stakes, you have to have those to get to the doorstep, right. And I have channeled for the last three decades, my energy and efforts into what is the character of the individual? What are those intangible leadership attributes? So I tend to ask questions that are unexpected, like, what are your career aspirations?
And it's interesting to see how an executive reacts, because I'm not asking you: "Do you want to become a CFO in 2.5 years for a $3.7 billion company in X industry?" That's not the point of the exercise. The answer you give me needs to demonstrate to me that you are invested in your own career journey, and directionally, you know, where you're headed. Otherwise, you fall into a very dated model of IR, which was 20 years ago, when IR talent simply went from one IR job to another IR job to another IR job. That doesn't happen anymore. It's just not a part of the landscape. So that's, that's one question is, what are your career aspirations?
Another one is I want people to tell me about successful influencer moments. Because at the end of the day, my clients know that all of my candidates can do the job and do it extremely well. What they need to also ferret out, and I have to be confident about is, can you be an influencer in an appropriate neutral way. And there's an art to that. And a lot of people don't understand the art.
I also look for, I like to ask wide open ended questions, because where the candidate starts on the ball field to answer them, tells me something about their critical thinking skills, and how they are anticipating trying to look around the corner. One of the questions I ask is, talk to me about business questions you have about my clients. And I'll tell you, most people are not prepared for that. And I want to know that that candidate has done a deep dive as though they believe the conversation with me as though they're talking to the chairman of the board or the CEO. And people come unprepared. And that's not good enough for me, because it's not good enough for the clients. That makes sense?
Fasken
Absolutely. It sounds kind of the second half of my question is, what should they be prepared to answer and we talked a little bit about this on a previous conversation. It's really about that preparation. And I think that also shows one of the attributes, which is intellectual curiosity, right. Have they done that digging? Have they done the background?
Repovich Rosenberg
I think Mark, let me add something to that. Because I also think and I have felt this way for 30 years, that candidates don't understand themselves well enough. And I used to say to audiences for years, “candidate Know thyself”, because if you don't know who you are, the person across the table is not going to be able to understand who you are because you're not conveying it.
And I think some self introspection is a really healthy, kind of checkup once a quarter a couple times a year. Because, for example, if you really love being with a small cap company, and you are just firing on all cylinders, you're exceeding expectations, you love what you're doing. And you get a call from a recruiter or a CFO at a large cap company. Really, that's not your cup of tea. If you don't know that, guess what, all of a sudden, you have thrown yourself in a situation that makes no sense. Yet, the world has told us forever. Here's the benchmarks that you want to claw through to be deemed by success successful by others. Who cares what somebody else thinks, find your lane, your sweet spot and pursue it. And that's what I mean by you know, candidate Know thyself. And I think that's a dimension of successful careers that gets lost in the conversation. That's a great point.
Fasken
That's a great point. And so the next question I have, and it's kind of related to this last few questions we've had here, which is talking about what separates the top IROs, what separates those, those top 20% from the rest of the pack? Are there we talked a lot about attributes or other other specific qualities, or sort of clusters of traits that you feel really differentiate those high performers from the rest?
Repovich Rosenberg
Yes, and I have a very defined list of those.
So we talked about organizational influencer. And a little bit about organizational awareness. And let me touch on that a bit more, because I think it's really important. Whether it's influencing or observationally, being keenly and astutely dialed into the ethos of the organization is a direct result of positioning yourself to be respected and sought out by others. A handful of years ago, I was doing a search for a company in the Midwest and the CFO, there was an incumbent, he was going to retire. And I said to the CFO, what do you like best about this, the guy who's in the job. And he said to me, he is liked and respected by everybody in the organization from the receptionist, to the board. And I said, Well, how does he do that? And he said, to me Smooch, he has taken it upon himself to be available, intellectually and emotionally, to everybody at our corporate headquarters. And he said, he's developed these incredible relationships, that if they're having problems with the boss, or they're having problems understanding a piece of our business, they just go to him. And he said, I love that quality, so that organizational awareness, Mark, has really risen to the top as a key behavior, if you will.
I think the notion of being a psychological business partner to the CEO, and CFO is something I've socialized for many, many years. And what I mean by that, CEOs and CFOs, don't hear it all. And why is that? Because it's John Doe, comma CEO, they never hear at all, they'd like to hear it all. But they're never going to by virtue of the position that they have. And so they look to an IRO, who is supposed to immerse themselves across the enterprise, and not know everything, but certainly be dialed into the ethos of the organization, to be able to share with them on a confidential basis, where things are bubbling up, that may not be good, where there are home runs that are being hit, that don't bubble up to the top and should. And so I think that's something else again, IROs should be investing in that positioning with their colleagues.
Thought Leadership is another area, you know, can you see around corners are you anticipating? And that's a hard one, because that's largely DNA, right? It's hard to develop that. But if you really work at it kind of in a keenly way, you can do it. And finally, I'll mention something that I think has been amplified, as a result of what, let's call it global politics. It's a fine line. It's called self awareness, but it's a fine line between hubris and humility. So all of our clients asked me to bring them talent, to have what they call it have a spine meaning enough self confidence where they have a viewpoint, and they're going to express their viewpoint even if it's different or conflicting with the CFO and CEO. But they're going to do it with humility. And there's an art to that. Right? And can that IRO be an intellectual sparring partner with a CEO, and CFO. And if those two executives land on a strategy that's different than the IROs, can the IRO walk away being on the same page, as those to that triumvirate of CEO CFO is critical. But you can't have that if you lead with hubris. And sometimes people's lack of self awareness doesn't allow them to see that maybe they're on the side of the line of hubris versus humility.
Fasken
There's a saying that I really love which is, "disagree, but commit", right? It's okay to disagree about things. But once you come to a decision, as a team, you commit to that, and you follow through on it. And so I'd love some of those points about you know, I think for me, as I'm listening to this, a lot of it relates back to those relationships, and developing those strong relationships. But you have to earn those relationships, by understanding that this is at a deep level, making sure that you're you said, kind of emotionally and intellectually available to your colleagues. And really acting as a partner, that you how you develop these relationships.
And I love the fact that you use the word humility, because it goes to our next section, which is talking about culture. And at Irwin, one of our values is humility, and its culture matters a lot. I think it should for every company, it matters a lot for us. So we focus a lot on who aligns with our core values. And we're trying to figure out how do you probe for that in the interview process? How important is culture amongst the companies that you work with as they're looking to hire IROs? And what are some of the questions that management can ask to uncover that?
Repovich Rosenberg
You know, it's a great question, Mark. And I'll tell you, since I'm always focused on the cultural fit. I articulate that to clients at the beginning of the process, and some will, you know, what do I want to say? Some will think less of that than others, others are all in about that, and they lead with that, whereas some, you know, kind of set it to the side. “Sure, sure. But can they write he news release? Can they do the financial modeling”, and I and I say to my clients, listen, I'm gonna bring you a panel, all of whom are extremely competent, technically, and they can exceed your expectations, doing the job. And I guarantee you, you're gonna make your decision on fit. And they kind of chuckle about it, then when they interview, say, four candidates, they call me and they say, “Wow, we have four incredible candidates, we don't know who to hire”. And that's when I pivot them into deep when you interviewed the candidates, did you have a conversation with them? And this is kind of how you get at the fit piece, Mark.
You know, they pay us to fully vet technical competencies. And I don't interview any candidate who doesn't have 100% on the technical competencies. That's what my team does. And they bring the right people to me, and I focus on the Fit piece. And I say to my clients, please let me tell you what not to do. Do not say to the candidate, take me from college to the President. First of all, it's patronizing to a senior executive. Second of all, we vetted all that. We have vetted every career change, everybody's whole, they're all good. They made the right decisions to change jobs, get to know the person, find out what their values are, talk to them about their upbringing, what were their inspirations, were their parents inspirations to them as they were growing up as kids? How did you learn to have a dinner table conversation? I mean, these things that are rather pedestrian, but they're character building, Right? Because at the end of the day, you're hiring the character.
And I'll say to you that I have the discussion with every client that it is easy to be brilliant when the financial markets are great, the economy's good, and your company is doing well. Right, that said, look at where we are, the world is right now. The economy is doing terribly. It's awfully schizophrenic, companies are stubbing their toes left and right. And in those moments, CEO and CFO turn to the IROs to dig them out of the economic ditch. And they don't have time to learn about the values of that person then, you can have to go into the whole hiring cycle, locked and loaded that you have the leap of faith that you trust this individual, they will build their additional credibility over time. So get in Know the fabric of the person will always serve you. Well.
Fasken
Great point. Yeah. You know, it's 100%. And I think that, you know, it's, it goes back to how I'm sure that you consult this a lot. How do you design that interview process so that to your point, all those kind of technical questions everything out of the way, so that those management teams can focus on getting to know that know the person. And so there's the flip side of that, though, which is, you're also working with candidates. And so as an IRO, what should IROs be asking in those interview processes to ensure that their new role also aligns with their core values?
Repovich Rosenberg
Well, that is one of my favorite questions, because I think most IROs miss it, and a year into the job, they're saying to me, the job isn't really what I thought it would be. So there's, there's a couple of things Mark, and I think IROs, like many executives, this is not exclusive to the IRO community, but I think senior executives need to ignore the shiny object syndrome, as I call it. I mean, let's face it, we all have an ego. We all like being sought after, we all want to be wanted, right? So when a recruiter calls, and there's this great company that you say, “Wow, I'd really like to go to work for them”. All of a sudden, there's the shiny object. And all of a sudden, you've your critical thinking skills, go right out the front door. And you have to gain some objectivity and neutrality. And go into the process. Number one, knowing who you are, knowing what your values are, and calibrating that to every question that you ask an executive at that company, do your own stealth research about the board of directors, their backgrounds, because if they have been on the board, or been executives at companies that have values that are contrary to yours, you have to wonder because they're they're a constituency you have to reckon with.
And so I think, in the end, for round one of interviews, you can do a certain amount. But round two, I call it setting the table, you get to meet the CFO a second time, that's when you really start peeling back the layers with very specific questions, not just about values and the ethos of the organization, but expectations of the IROs performance. And people don't do that, I make my CFOs have a second one hour interview with the candidate. So when they've narrowed it to the top one or two, I always say to the CFO, you need to have another hour or hour and a half this person because this is when you are going to number one, establish the specifics, you're going to get feedback about whether or not that candidate if you've got two, is going to align with you and lean into your expectations or not. And you will come out making a better decision. So it's an investment on both sides.
Fasken
It's interesting when you also think about there's of course, the traits and everything of the top performing IROs. But you know, you think about a lot of people, if you were to look at people, you know, who have had successful careers, feel like a lot of it also comes back to just making the right picks in terms of the next company you go to right, and you talked about, not only does it align with your culture and your values, but also doesn't just align with what you're interested in excited about, right?
To your point of like you're working at a small company doing great job. And a large cap calls is a big, shiny object. But does it really align with what you want? And so it's like that, that point of knowing yourself, and knowing what's a really good fit for you is, is a really amazing starting point. And not a lot think, I don't think a lot of people always think about it that way.
Repovich Rosenberg
They don't, Mark. It's a huge gap in the career evolution process. And it's a shame because, you know, I just think that there's so much noise about out there about what we should be aspiring to and striving to achieve. And at the end of the day, if you're not well suited to it, who cares what you're gonna go to a large cap, if you will, because somebody else thinks you ought to be doing that. And you can only make smart decisions. If you know yourself well. Take the time to do that.
Fasken
Which leads to my next question, because we talk about progression and what's expected. It seems as though for many IROs there's either maybe a distinct desire or an expectation that there is some move into the C suite whether it's CFO or CEO? Is that a progression that you usually see, is that a pretty linear progression? Is it all over the place? kind of curious, because I'm sure there's a lot of IROs that are maybe listeners thinking, you know, what's my next step?
Repovich Rosenberg
Well, part of it depends upon a person's background and their own career aspirations. If it's a finance executive who's landed in IR, and they're an exceptional IRO, we're seeing many of them a high percentage, moving on to either a CFO role in an operating group, or leaving a company and becoming a CFO at the corporate level. If the person has a Wall Street background, and they get into corporate IR, chances are the next best step for them is going to be strategy or corporate development. But part of it also, Mark, I think, depends upon again, the individual and intellectual appetite for mastering skills outside of what you came packaged with, right?
These these IROs are smart. And I always say to my clients, you know, if they're missing one technical competency, or they come from outside your industry, this is a good one. I love to present off spec candidates, which largely for my clients mean somebody who's not sitting in their industry. And my counsel to clients is, you have everybody in your corporate headquarters who knows the industry already, but what you don't have is a capital markets expert, who can be the steward of your relationship with the investment community. And they're smart, they'll learn your business. You have to admit, that's your insecurity, you have to overcome hiring executive, it's not the talents issue. And so it's kind of that's an interesting dynamic as well.
And I think the same concept applies too when you take an IRO, what is their next career step, because most of these people do not want to go to work for a company that has a culture where it's a dead end, meaning you go into the top IR job, and in five years, you're done. They don't, the whole landscape of career evolution has changed inside corporations, which I think is awesome and amazing, because there are so many opportunities. Go on to be a chief operating officer. The single most important thing that an IRO is paid to do is have superb judgment. There's not a C suite position that isn't paid to have the judgment, General Counsel, Head of HR, CFO. You can have direct reports that support the technical areas that you oversee as Head of HR or general counsel or CFO, but the judgment piece, that's what the CEO needs sitting around his or her at her table, from his direct reports, right? Great judgement starts way earlier in one's career.
Fasken
And again, going back to that idea of knowing what you are good at, and knowing what you enjoy is going to help to determine what that next step is. And I mean, short answer the question too, and that it's not just CEO, and CFO. And there's many other options. And so it's sometimes about broadening those horizons and not feeling like you're being maybe painted into a box.
Repovich Rosenberg
And Mark, here's a suggestion for your listeners. And this is more, my headset, but it's worth sharing. If I was an IRO , I would find a way in the course of my first year, to spend time with each of the direct reports to the CEO, and convey to that person my interest in that subject matter and volunteer on a project at some point. It's a great way to establish your own credibility internally and build your brand across every direct report to a CEO. It's a great way to acquire knowledge about different subjects. Fast forward three, four years, hence, you can then say, well, you know, maybe I would like to be an HR leader. Maybe I'd like to work for the general counsel or get into corporate development. But you don't know until you ask the question and invest a little bit of time in the subject matter.
Fasken
Right. Absolutely. So I can imagine that there are also some people listening to this that are thinking about their next step or aren’t perhaps feeling entirely happy in the role that they're in. As you mentioned, it does happen that people get into these roles and maybe they don't have their expectations or what have you. What's a sign for IR professionals that the current role isn't the right fit?
Repovich Rosenberg
Well, if you're paying attention to the relationships you have, I would say a couple of years And the obvious ones are if your CFO and you are not aligned on strategy, about how to build the relationships with the investment community, that's a problem, you got to peel back the layers on. Doesn't mean it has to be 100%. But you've got to be aligned in that regard. And sometimes there's just a disconnect.
Some CFOs are pretty insecure about the relationship with the investment community, because they either haven't had a lot of experience, or they've kind of been beaten down by analysts, which is not uncommon. So I think that's one. I also think that if there is a company, overall corporate strategy shift, and the IRO is having a hard time getting on board with that pivot, there's going to be conflict. And if that corporate shift is something, I'm dealing with a couple of companies right now that have major corporate shifts and strategy. And what's been interesting is the conversations I've had with the CFO and the talent management teams about the percentage of people who are long term-ers, who just can't make the pivot. And so that I think goes back to knowing yourself, you can't make the pivot. After you've either tried or you've really thought about it, have a conversation with your CFO and say, “you know, listen, I don't think long term, this is it for me- So I'm probably going to start looking for the next thing. But I'd like to make have us have a commitment for six months, nine months”, whatever it is, and make it make it a mutual decision, versus just going out looking for another job, because maybe there's something inspirational that CFO can say to you or share with you, that will help shift your thinking about that pivot.
I think too often, Mark people keep their aspirations and their thinking kind of in this bubble in their own heads. And you know, I have this expression, “the answer is always no, unless you ask the question,” and then you have a 50-50 shot of it being Yes. So, you know, you kind of socialized some of this, albeit carefully. And in a guarded way. But if you don't discuss, I just talked with a candidate who I've known for 20 years, the other day, and he's leaving his company. And he's, I made a suggestion to him, so that he could possibly stay with a company he loves. But there was a shift that got to him. And he said, Wow, I would never have thought about that. And I said, Did you even ask the question? He never thought about it. Nothing wrong with brainstorming with your boss? Yeah.
Fasken
Well, I can imagine that a big part of being in that top performer, that top 20% performer group is really feeling connected to the vision and strategy of the company and really feeling excited and passionate about it. Right? And if you lose that, because of a change in strategy, or whatever it is, it's very hard to be operating at your peak efficiency all the time. It's exhausting.
Repovich Rosenberg
Yes, absolutely. And I think I'll make a suggestion to your listeners Mark about something that I'm very passionate about, aside from the fact that passion is one of those intangible leadership attributes that if a candidate doesn't have it, I don't move them forward. Because we're, we're, we are past, the notion of phoning it in. And half of the IROs half the searches we did during the pandemic, were to replace the 500 in headset. But one of the strategies that I think senior level, IR talent, and frankly, other senior level executives should take is to take the time one quarter to pick four or five people who have known you, almost your entire career. So 10-15 years, because they've seen you grow up and mature as an executive and go to them and have a conversation about you know, I'm thinking about what my future lane looks like. What do you see me doing next?
Do not ask a leading the witness question of I'm thinking about going to do X next. Because what you want is an unvarnished reaction from that person. That's going to help you really see more of and understand more about how you've matured and grown as an executive. It's one of the most magical conversations you can have with someone because other people see us differently than we see ourselves. And they will see growth points about you and behaviors and maturity that you would have no way of knowing and not only is it a validation for you of your own ego that hey, you have come along quite far in your career, but they might be have inspirational ideas for you to think about, that you can take that to your management team and, and socialize, that could be actually a catapult for the next great step for you.
Fasken
Great, great idea. Great suggestion. And so we've come to our last question. I feel like there's a lot more than we could cover here. But as we've talked about, we really try to focus on practical tips as part of this podcast. And so what is one skill that an IRO listening to us today should focus on to help them get into that top 20%.
Repovich Rosenberg
Candidate know thyself.
Fasken
I feel like I saw that coming.
Repovich Rosenberg
So here's the exercise; every candidate who I prep for interviews with my clients, and this is a brand definition exercise. Take a piece of paper, and create bullet points of the top three intangible leadership attributes that you take with you everywhere in every conversation, such that if someone was like me was to call your last three CFOs, or CEOs, consistently, they would say you are, blah, blah, blah. And what's interesting about the exercise is it forces people to think about, say, the last 20 years of their career, and what is this themes about their behaviors that allowed them to be successful or brought them success? We don't take enough time to reflect on the journey we've been on. And there's valuable information there, Mark, because you know, I interview people for a living, it's easy for me. But when you go into an interview situation, you have to look at it as though you're going on CNBC or CNN. And the interviewer says, talk to me about the economy. And you're really there to talk about your company, your industry, let's say it's technology. So they ask you about the economy. And in a split second, you say to yourself, you know, I don't want to squander my minute and a half of fame on the economy, global economy, I want to talk about my technology company, but you have to give a respectful, brief, polite answer to the interviewer. And then you have to be able to pivot quickly to the topic, you want to let the viewers or you know, the executive who's interviewing you to hear, if you haven't thought about this stuff ahead of time, you're not going to know who you are, and you want that executive to know who you are. So that would be to me, my best advice is put the bullet points of your intangible leadership attributes on a piece of paper in priority order. And maybe you do five, but the if you only get to share the top three, they better be the number one, the number two and that number three
Fasken
Great! Smooch, this has been awesome. I'm sure there's a lot more that we could cover and hopefully we'll get to do that again in another episode. Thank you so much for your time. Well, thanks
Repovich Rosenberg
for including me, Mark, and I would love to come back for a second episode. I'm happy to share any tips that are valuable to talent.
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