S2E8 - Megan McGrath from Cushman & Wakefield on How To Build Better Relationships With the Sell-Side

The sometimes adversarial nature between Corporate IR and the Sell-Side can result in some unknowns when it comes to building strong and mutually beneficial relationships between IROs and sell-side analysts. In this episode of Winning IR, Mark Fasken sits down with Megan McGrath, Senior Vice President of Investor Relations at Cushman & Wakefield. Megan's insights are incredibly valuable for Investor Relations Officers who want to enhance their sell-side coverage. As someone who has worked in the sell-side industry, Megan's advice comes from a place of deep understanding. Having held key positions as an analyst and Director of Research at top firms like The Buckingham Research Group, MKM Partners, Barclays Capital, and Lehman Brothers, Megan's expertise is unparalleled.

Listen to the episode to learn more about:

  • The transition from the sell-side into IR
  • The biggest misconceptions about the sell-side
  • What IROs can do to better engage the sell-side
  • How to work more proactively with the sell-side
  • Tips for getting the sell-side to initiate coverage
  • How to better work with your covering analysts
  • Building An Efficient Partnership Between The Sell-Side, Your Company, And Your Management Team

About Our Guest

Megan McGrath is currently the Senior Vice President, Investor Relations at Cushman & Wakefield, where she leads the IR function, providing strategic insight to the firm’s leadership team, Engages with existing and potential investors, and fosters working relationships with the equity research analyst community. Megan has over 20 years of experience working in IR and on the sell-side, with previous roles at companies such as Financial Profiles, Buckingham research, Lehman Brothers, Barclays Capital, and MKM Partners.

Episode Transcript

Mark Fasken: So Megan, I wanted to start with a question about the transition from sell-side into investor relations. I mean, you've, you've now sort of gone through that transition of being in on the sell side and being in research and moving over into investor relations. And so what was that transition like and what were some of the biggest adjustments or surprises that you experienced in going through that experience?

Megan McGrath: Yeah, thanks, Mark. Great question. And thanks for having me on the podcast today. I'm really excited to chat about this topic. The transition for me into investor relations was pretty smooth, and I really love IR, and I think it's a pretty natural transition. For folks that come from the sell side, the sell side prepares you for a lot.

Interacting confidently with the C suite is one of them. Obviously modeling and numbers, you know that pretty well coming from the sell side. So that transition is pretty easy. Knowing what's important on an earnings call and prepping for meetings. That's all stuff that I think flows pretty naturally for a former sell side analyst.

I would say for me, the difficulties and the challenges came from some of that inside baseball stuff that you don't ever really get to know when you're on the sell side. There's a lot of lingo in FP&A that I'm still learning, that was pretty difficult. A lot of those corporate inner workings that you never have to deal with on the sell side, things like board meetings, and scheduling, and the proxy is not something you come in contact with a lot on the sell side.

So those are some of the things that were a little bit of a challenge coming in to a corporate IR role. And I think generally you just have to kind of set your ego aside, and lean on the team that you have internally to ask about what you don't know. 

Mark Fasken: As a question for you, one of the things that I've heard from a few IROs is we've sort of talked about, you know, what it's like making that transition, or sort of the differences between sell side and being sort of in house IR.

One thing... That seems to surprise people is how cross functional investor relations is. Have you found that as you've made the change? 

Megan McGrath: Yes, and it's, I think it's a great part of being in IRO, and I was actually just interviewing someone for a junior IR role, and that's one of the things that I told them is one of the great things about being in IR.

 You have so much contact with so many different parts of the firm. You get to really sit in on so many interesting meetings and conversations about strategy, about the numbers. It does require that ability to be able to interact with people throughout all different parts of the firm and does require you to have really good listening skills.

And sometimes as a sell side analyst, I think we do have to transition because part of your job on the sell side is, you're sort of paid to give your opinion and speak. And so, you do have to make sure that you're taking the time to sit back and listen and really absorb what everyone at the firm is telling you, and what that means for the messaging that you're trying to convey.

But yeah, you really, the great part, I think, and what I love about it, is that you get that interaction with so many different pieces of the firm. And on a daily basis, you might talk to legal, FP&A, controllership, CFOs, the head of a business line. And that just requires you to be able to distill a lot of that information, but I think it's a great part of the job.

The Biggest Misconceptions About The Sell-Side

Mark Fasken: And so, you have extensive experience on the sell side and being in research, and really the core topic for today's episode is really talking about advice on how do you strengthen relationships with research analysts. And so I wanted to start with some misconceptions. What are some of the misconceptions that you think IROs have about dealing with the sell side?

And any recommendations that you have in terms of how IROs could better engage with the sell side? Things that maybe you think they're not doing today. Sort of looking at it from the perspective of like, you were on that side, now you're an IR dealing with the sell side. What are some of those misconceptions?

Megan McGrath: Well, I think maybe one of them is that there's a sense that it's an adversarial relationship between the company and the sell side. And certainly there may be occasions where it is, but for the most part, it doesn't have to be, and it's not really designed to be. Most analysts out there aren't looking for that sort of gotcha moment.

They want to stay on the right side of things. They just want to look good, and do a good job, and look smart to their clients. It doesn't mean you're always going to agree, and that they're always going to have the same opinion you do, but it doesn't have to be an us versus them scenario, and there, there's a lot of room to work together with the analysts to get your story across, and have them help you do that.

And I think sometimes, there's this misconception and misperception that it has to be by its nature adversarial, and I don't think that that's the case. So that would be the first thing I would say. Secondly, I would just say that I think sometimes we can think that we're the only company out there, and we do have to remember that the analysts, even more so now than ever, cover a lot of companies, and are pulled in a lot of different directions, so they have pretty limited time for your company and your stock, unless you're, you know, a mega cap and the most important stock in their coverage universe. But if you're not, which most of us aren't, you have to keep that in mind and try to figure out ways that you can help them cover your company the best and the most efficiently.

And then I guess the third thing I would say is there's probably some misconceptions about how the sell side works, and the kind of machine that's behind it. So, there's the analysts themselves, but there's also the associates, there's the sales force, there's the internal structure of a sell side and how they get paid and how they get compensated, and if you know that up front, I think that that can all help and create, creating a good working relationship for you and the analyst and figure out how everything fits.

You know, is it an II shop? Does that matter to the analyst? And what does that mean for your relationship with them? And what kind of value they're getting from covering you? And I think you can ask those questions of the analyst. And I would tell people, don't be shy about asking them about their time, asking them about their relationships internally, how many associates they have, you know, what's the working structure, do they care about II, does it matter on how they get compensated?

I think everything that you can learn about how that analyst gets paid and what's important to them, can help you figure out how they're gonna best get value out of the relationship with you. 

Mark Fasken: That's a great point. And so as it relates to sort of what IROs can do better, I think that's a great one, sort of understanding, like, what are the motivations?

What is the compensation structure? Having those open conversations of like, how can I help you? Now, how can we make this a mutually beneficial relationship than just saying hey, I need you to cover me and I need you to say good things about me, which obviously I don't think you're even allowed to do.

What IROs Can Do To Better Engage The Sell-Side

Mark Fasken: Recommendations for what IROs could do. That they're not doing today. Like you mentioned, I mean, maybe it's being a little bit more proactive. If you're not the number one company in their coverage universe. 

Megan McGrath: Yeah, I think that's definitely something, I think what I would say is. A couple of things, when we talk about the machine involved in the sell side, one thing I think that people forget about is who's working with the analyst.

So most of the time, they'll at least have one associate or junior person working with them, maybe multiple ones. Don't forget about them for a couple of reasons. One, they're probably the ones building the model. So, if you have issues with how an analyst is modeling you, make sure that if you're having a conversation, try to make sure that your junior is on the call.

Because they're ultimately probably the one that's going to go back and implement anything you're talking about related to modeling. Secondly, they could be the one that take over coverage of your company one day. There's a lot of turnover on Wall Street. So it would be rare for you to have the same analyst over, you know, a 10 year period.

So, make sure that you're forging a relationship with the junior analysts to make sure they're as smart as they can be. And I think a lot of people forget about that. I always offer to spend some time with the junior analyst, if they're new, if they're coming up to speed, if the senior analyst is really busy, I always offer to spend some time on the phone and explain the model to them, to make sure that they're up to speed.

So I think that's a little bit of inside baseball that people might not think about. But that's an important thing to do. I think when, when I talked about the time constraints on them, one thing that I've offered to do is, I think a lot of times folks talk with the analyst right away after earnings because we want to make sure that they're okay when they put the note out. But I always offer to spend some time with them in the, let's say, two weeks or so after earnings. Let's put 30 minutes on the call, better than the 10 minutes we might get with each other right after the earnings call, and when earnings are finished, right?

So we're not all so engaged in the day to day earnings. But once their earnings period is over, whenever that is, offer to put a little time on their calendar to go over the model, the call, were there any misconceptions about what was said? What kind of feedback have they been getting? And I think that's very much appreciated by the sell side folks that I deal with because they don't really have a breath during earnings season. So once it's over, I think they appreciate a little bit of feedback, and a little bit of of interaction, you could offer that time with or without the CFO. If you think there's some important modeling things to go over, you could even get your CFO to join that call.

And then the other thing I would say is, you do want to give them an excuse to publish about you. So maybe think about some non traditional ways. I think we all think about NDRs, as the only interaction or maybe coming to a conference, but are there any non traditional ways to give them access to you?

Maybe it's a lunch, maybe it's an, a conference call, a midday conference call that they can invite 20 of their best clients to. Maybe you have them come to the office for a day and they can meet someone that they don't normally interact with, if you're okay giving that person access to the sell side.

So I think about it as, you have a group of sell side analysts. You don't want them to just be publishing four times a year. So what are the interesting ways that you can give them an excuse to write something and hopefully something good?

Mark Fasken: Those are great. Super helpful.

Okay. And my next question is sort of related to, to this, which is how has your sell side experience influenced how you engage with research analysts today? 

Megan McGrath: Yeah, I mean, if you think about it, one part of our job is very similar, which is both IROs and sell siders are tasked with distilling complex information for an investor audience.

We also have to on the IR side distill it for the sell side audience. The job is really similar in that way. And if you So you already kind of talk their language and I think from the sell side, I came in talking that language and understanding how to take a lot of complex information, whether it's on a macro basis, or whether it's very complex earning information and distill it into an opinion. For us on the IRO side, it's distilling it into some key messaging points, but it's the same ideas there.

So I think if you think of it that way, you can try to meet them in the middle. And again, make their job a little bit easier. What are the key points here? When you're talking to them, make sure you're getting those across. I always ask in an earnings prep session, I ask our CEO and our CFO and anyone else in the room, what do we want the headline to be, that the analysts write after this? And we talk about it, and we try to actually work those words in to our earnings script. So give them the headline, give them the takeaway.

Don't assume that they're going to infer it from what you're giving them. And then we have some key takeaways. Let's say top three takeaways. So when you get into those post earnings calls, and evidently one of the analysts will say, what did I miss? Or what do you think the takeaways are? And they'll ask you that question.

So have them written down in advance and distill that information for them. And I think that's a really great way to get your messaging points along. And I always jokingly say, I'm going to, you know, I'm going to pay myself a dollar if I can get that, if I can get that headline written in advance.

So it's a little contest to see if we can get those headlines done. 

Mark Fasken: That's great. And you've also mentioned in the past, it seems to me like a lot of your experience has almost built like a level of empathy with research analysts. You've been in the seat. And so it seems like a lot of these tips are around how do you educate the research analyst? How do you make their lives easier? Because to your point, I think we, we, we all know this, but their coverage universe in a lot of cases is just massive, right? And so they just don't have enough hours in the day often to do probably the level of research that they would like to even do.

How to Work With The Sell-Side On Your Modelling

Mark Fasken: So to the degree that you make it easier on them, to make their life easier, going to make your life easier as an IRO. And so one of the things that you had mentioned was how you work with the analysts on modeling and you mentioned, you know, pulling in sort of that junior analyst, making sure that they understand, how do you do that with the analysts?

Is that sort of a one to one thing? Is it like you're doing like a lunch and learn, inviting a couple of the analysts. How do you go through the process of explaining your models that you feel like you're on the same page? 

Megan McGrath: Yeah, and this, I'll tell you, this has been an ongoing lesson for me on the other side of it.

I didn't really know how to do this at first. I thought it would be easier, to be perfectly honest, coming from the other side, and I thought, oh, well, I'll just have to explain things once, and that, that will be it, and It will all be wonderful. And that has actually turned out not to be the case.

It's not a one time thing. It's an ongoing process. My ultimate goal is to make sure that all my analysts are smart about my company, and they understand how it works. Because an analyst that isn't smart is going to get you into trouble. When they don't understand how to model right. And you might miss a number, not because of anything that happened internally, but because it just wasn't modeled correctly.

And maybe something in the macro changed and people didn't really understand how that impacted your business. So you really do want your analysts to understand the business model and how it works. And I'll tell you a story. Cushman began to give more information about incrementals and decrementals in terms of the impact of revenue changes on our bottom line.

And, the theory was like let's teach folks to fish here. So as the macro changes and their models change, they'll understand how it impacts the bottom line. But that's not really how our analysts anyway had thought about the model in the past and how the models have been set up.

So, it has taken me several quarters and several sort of independent lessons with many of the analysts online, to actually walk them through, this is how it works, this is how you model that. Here's an example of how you would model it given the information we've given publicly, and to walk them through it.

I thought it was going to work perfectly the first time we did it and it didn't. And I... And I think the lesson here is that you really do have to pay attention to what they're understanding and what they aren't understanding about your model. And then when you realize, okay, well, everyone understands this piece of the model.

Maybe they understand the top line, but nobody really understands how the bottom line's working, or how gross margins work or something like that. And then get with your CFO and your team and say, okay, what's some color we can provide publicly if we need to on an earnings call, next earnings call, maybe, or in a deck to get them a little bit more information about where they need to model the business correctly, and giving them the information that you want to give them.

And at the end of the day, it might be a little painful in the near term to get them there. But I think at the end of the day, if they understand the model, how the model works, it will help in terms of the estimates, the variation in estimates coming in. So you don't have to worry when the macro environment changes or external things change.

You won't have to worry so much about the analyst not understanding the impact that that has on your business. So it's work in the beginning. If you have a set of analysts that for some, for whatever reason, if you have a different business model, or for us, we're sort of what I call a tweener. Like we have analysts that cover many different sectors, and those sectors have different business models.

So it takes a little bit of work, but I think that there's a nice payoff if you put in the time. 

Mark Fasken: Absolutely. But all that is sort of operating under the assumption that you have coverage, that you have a meaningful amount of coverage, which, as you know, you know, you've worked with all different sizes of companies.

Tips For Getting The Sell-Side To Initiate Coverage

Mark Fasken: There are a lot of companies out there that really struggle to get the coverage. And so that sort of leads to our next question, which is, any tips for a company who is trying to get the sell side to initiate coverage or sort of expand their universe of analysts? 

Megan McGrath: Yeah, it's tough.

And as you said, when I was on the consulting side of things, I worked with companies, all different market caps and, newly public micro cap, all those different, and it, And it is a challenge. And I would say a couple of things. I guess first I would say, and this maybe comes from management.

So this is maybe a little bit of, C-suite management, but don't get too obsessed with a name brand in sell side research. If you're smaller, you can get really good coverage from a smaller firm. And that's, in my opinion, better than just bad middling coverage from a big firm who might not understand your business model.

 so cast your net widely, in terms of potential coverage, and don't just go for the most famous you know, big Wall Street names. It's important to just get that coverage and coverage that cares. And that can provide value. The other thing I would say is baby steps. Start establishing relationships where you can.

Maybe there's some industry conferences that you find out a lot of the analysts go to, figure out if there's industry conferences where the analysts go and meet with the bigger cap companies in your space. Could you reach out and say, "Hey, we're gonna be at this conference" and this is, I don't mean analyst conferences.

I mean, perhaps like an industry conference in Vegas or something like that. A lot of times when I was a sell-side analyst, there were a couple that I went to a year. I would bring investors to those conferences and meet with some of the bigger companies. So if you can figure out if there are any of those, you could reach out and say, "Hey, we're also going to be there.

Would you like to tour our booth or would you like to meet?" You could bring investors to see us. So again, making it very easy for them. And that's a kind of value that you can provide to the analyst. And so, it might be a little bit of you providing more value up front than they provide to you. So the relationship might be a little imbalanced, but they will benefit from the knowledge that you can give them.

And so, you could also for example, one of the things I said was doing a conference call with investors before you could do that as well. You could say look, "I know you don't cover me, but I'd be happy to get my CFO on the phone with investors for 30 minutes, and I think we could provide you some interesting information about the industry."

And then of course work in information about your company, but it might be providing more industry kind of information first, establishing that relationship, and then over time convincing them to come up to speed. And I guess the last thing I would say is I would say the point again, don't forget those juniors, right?

So if you're, let's say you're in a smaller category of companies, it's not an II coverage category. Is this the kind of company that might be interesting for an up and comer? for an analyst, a lot of times on the sell side, you'll have a, an associate who's almost ready to pick up coverage, but they don't want to give them their own sector.

They're waiting for a big sector to come up. And in the meantime, they might cover, I don't know, three to six companies on their own. As a jumping off point, and that could be an interesting avenue to get a new up and comer, interested in the name. So how do you do that? You find the senior analyst that's in the space, and maybe you ask them.

Another thing is you could find out who the director of research is at that firm. And see if you could get a conversation going about it. We all know sometimes... That information is tied to other ways that your firm might provide a company, an investment bank some money, but it never hurts to make the phone call.

There's nothing to lose there. 

Mark Fasken: Yeah, it seems to be like it's a, it's a marathon, not a sprint. And you do have to put that work in upfront and it is a relationship game to your point. Obviously there's a monetary aspect to it, but there is a relationship aspect as well. One of the things that you had mentioned that I thought was also really helpful was, you know, obviously there's this focus on, well, how do I get more analysts to cover me?

How To Better Work With Your Covering Analysts

Mark Fasken: But the other way that you were looking at it was, well, how do I actually just get more coverage or more exposure from the analysts that I already have? So if I'm a small cap name, I've got four analysts. I'm gonna keep working on getting to fifth and sixth and seventh, but you know, how do we also work with, with the analysts that we already have?

So what are some suggestions there? 

Megan McGrath: Yeah, we talked about this a little, giving them an excuse to publish. So what can that excuse be? Right? So think about it that way. What kind of incremental access can I give them? Think about how does the sell side get paid? The number one way that the sell side gets paid is access to management.

Which sometimes is unfortunate for us as IROs because. Management access is limited, right? Time is limited. So, are there easier ways to do that? Again, could you do a conference call? Could you do a quick lunch? Could you invite them to your office for a brief meeting? Any way that you can get them to publish.

It might have to say yes to a conference that you wouldn't normally go to. You could also think about other people within your company that might be interesting for the analysts to talk about. I always also, I check in with our analysts relatively frequently just to say, "Hey, what are you hearing?

What are the big questions you're getting? Are you getting more questions, less questions?" And sometimes in that conversation, you'll say, "Oh, well, I'm getting a lot of questions on, you know, X, Y, Z topic". And so you could think, well, we have somebody internally that would be great to talk about that.

It's a person that we've obviously you want to make sure they're trained, reg FD trained and all that. But, this is someone we have allowed or would allow to speak to an investor audience maybe for a quick meeting or lunch or a call. You could have that analyst host a call with your head of whatever division to address the topic that they're seeing.

So some of it is just make sure that you know what the big topics are that the sell side is getting asked, and you might be able to figure out a way to create a little information for them to publish about. 

Mark Fasken: That's great. So sort of leveraging. I've heard a number of, IROs sort of mentioned this of like building that internal bench of subject matter experts that you can lean on.

You've mentioned it a few times, being that industry expert, sharing insights. Those are things that those analysts can then take away and possibly turn into a report, or a note or some other other form of of marketing for you. In your last answer, you mentioned sort of NDRs, and marketing, and management time, and all those types of things and there's been a fair amount of discussion about are people doing in person and hybrid now and post COVID and all that stuff.

And hopefully we're kind of getting beyond the post COVID discussions. But, it is important that IROs are taking ownership of management time and the relationship with the sell side. I think you're seeing that more and more now. How do you navigate leveraging the sell side for road shows and marketing?

Building An Efficient Partnership Between The Sell-Side, Your Company, And Your Management Team

Mark Fasken: How do you think about working with the sell side as a partner, but also providing some direction in terms of what's going to be the best use of you, and the management team's time? 

Megan McGrath: Yeah, I'll say this is a really interesting topic, and I think it's one of the things that surprised me that, from my point of view, has taken the most education to management over the several years that I've been in IR, and that's explaining how this process works, how the sell side works, what it will cost us. Some CEOs have worried that doing an NDR will cost us a lot of money. You know what the whole the process of how it works, In every CEO and CFO and management team is different, but unless they came from Wall Street, I think that there's a lot of misconceptions around how this process works, and what makes sense and what doesn't.

I think a lot of teams have heard about this sort of disintermediation of the sell side and they feel that they need to participate in that. I don't really feel any big need to disintermediate the sell side from my point of view. I'd like to use them as much as I can. I want to use everybody as much as I can to get our message across.

I think what you have to understand is some of the issues that are happening on the sell side, and be more proactive about the meetings that you're getting when you're doing an NDR. I think the virtual aspect of it has improved that a little over the last couple of years in the sense that, you don't just have to go to Boston and kind of take whatever meetings get thrown at you.

You can do these virtual NDRs and get a lot of good meetings in a short amount of time. So, I don't mind taking advantage of that. I know a lot of folks on the buy side have talked about preferring those in person meetings. So I think you do have to bite the bullet and do some traveling for a couple of NDRs a year, but not the sort of annual slog that it used to be going to all those cities.

So that's, I think, one good thing that came out of that COVID period. I think it's important to realize too, that the sell side analyst often doesn't have a lot to do with the process. So you might call and, or they'll ask you for an NDR and you'll say, okay, yeah, let's do one on September 15th. And they pretty much immediately hand that over to their head of sales or their corporate access team and they don't really have much to do with that process Until they get the schedule right before you get the schedule. So it's okay to help them along with that process. So if you want to give them your own targets, your own ideas, your own criteria, I would say it's perfectly fine to do that.

The analysts themselves, it's not going to have a lot of input. They're not going to have a lot of desire to take control of that process that pretty much immediately gets handed over. So it's okay to be a little heavy handed there if you feel like you need to be. If you have your own ideas or your management team has their own ideas of who they want to talk to and who they don't, I think it's okay to put some criteria around, throw some ideas their way, insist that a person or two get invited to a lunch or something like that, that's perfectly fine.

And so I think... being a little bit more proactive now than maybe we were five to seven years ago, is kind of the state of affairs these days. And, you can comfortably be that proactive and not worry about stepping on any toes in terms of who's going to be at certain meetings, how the meetings are allocated.

I think they're used to push back. I wouldn't be nervous about giving pushback. And I would incorporate what you know about your management team into that. Maybe you're going to a conference, maybe your CEO loves to be at conferences and talks all day, and you can put him in front of any meeting, but maybe the CEO doesn't, and maybe you just put that CEO in a handful of meetings for the day, and you take the rest of them if you're, you do meetings on your own, or you and the CFO take the rest of them, I think it's okay to be much more proactive and thoughtful about the meetings that you're requesting and that you will or won't take. It does take a little bit more work, but I think we're all about maximizing the value of our time these days and I think the sell side will help you, but we do have to remember, look, they're trying to get paid at the end of the day too.

And so, they'll get paid for an NDR no matter what. And it's okay to say, you know, no, I've met with this hedge fund seven times already this year. I, I don't really need to do it again. And that's a perfectly fine thing to say. 

Mark Fasken: But I've, I've heard a lot of IROs just talking about balance, right.

Of, of kind of your point of like, it's just, it's a relationship. Everybody's trying to win and achieve their goals here. And so if you have to take one meeting with, A fast money hedge fund that maybe you don't feel like you want to take that meeting with, well, maybe you should take that meeting, but then that means that you can be a bit more prescriptive in terms of how another slot gets used.

And so it sounds to me like a lot of IROs are starting to take that approach. You've mentioned sort of the management team, sort of their expectations, and you've, you've provided some, some really great insights into sort of how the sell side works. But, you know, every management team has a different idea of what the sell side is and how it works, and what they're supposed to do and how they're supposed to behave.

Managing Expectations With Management

Mark Fasken: So how do you manage expectations with management in terms of what they should expect from the sales side and what is normal and appropriate? 

Megan McGrath: Yeah, I mean, I think this answer is probably going to depend a lot on your particular management team. And I am guessing, and you know, I've dealt with a lot of them over the years, both on the sell side and as a consultant, and they all have different expectations, and they all have different experience and exposure to the street, and some of that experience, maybe from a previous employment might not have been positive. So I think it, it's smart to level set, and get a little bit of their knowledge and background and where their sort of biases might be coming from, initially to figure out how to manage that expectation.

So for example, we talked about it doesn't have to be adversarial before. If they're coming in with that thought about it being adversarial, you have to approach the meetings a little bit differently. Make sure that they understand who the analysts are and what that relationship has been, maybe historically, with the company or give them a little bit of background.

Make sure you really understand where the analysts are and give them as much information as you can, the management team, before heading into any meeting about the historical relationship with an analyst, where they came from, what their background is, what their position on the company has been .

I find that if you arm the management team with a lot of that information, it helps dispel maybe some initial thoughts about what the meeting is going to be like, that's on one side of things you have, there might be other management teams where they're maybe on the other end of the spectrum.

And you might have to say, okay, let's not get too friendly here. So, for a couple of reasons, one, make sure they know it's not personal. The analysts have a job to do. It's a business relationship. We're not always going to agree. It's their job to have an opinion. It's our job to give them the facts and our messaging and tell the story to the best of our ability and that's all we can do.

And sometimes those things will align perfectly, and sometimes they won't, and it isn't personal. And you can't get really too invested in what any of the analysts have in terms of a rating. It's rare to have sort of a perma buy on any stock over a long period of time. So chances are you're going to get upgraded, you're going to get downgraded.

This is, that's what's going to happen. And so as, as long as you're keeping the messaging tight and you're doing your job, you have to let the analysts do their job as well. So I try to make sure our analyst team and our CFOs and CEOs don't get too emotionally involved in their relationship with the analysts.

 Don't get too friendly. Be friendly, but don't get too friendly. You want to make sure that you're kind of spreading it out, your attention and time, to all of your analysts. And make sure that you understand that it is a business relationship and they're just doing their job.

We talked earlier about making sure that your analysts are smart, make sure they're all smart. You might have a favorite or two that you think do the best job, but an uninformed analyst is not going to do you any favors in the long run. Make sure that you're as much as you can, and as much as it's earned, and it does have to be earned, but as much as it's earned, make sure that you're spreading out the meetings and the information and the time to make sure that they're all informed.

Mark Fasken: Awesome. Megan, there have been some really, really useful insights throughout this, a lot for us to go and summarize, and, and a lot of useful points for anybody who's listening to this. So thank you so much for your time. I really appreciate it. 

Megan McGrath: Thank you for having me. It was great.

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About Winning IR

Winning IR is a podcast exploring the diverse insights within the investor relations community. Join host Mark Fasken as he discusses the winning strategies, tactics, and shifts in thinking with innovative investor relations professionals who are redefining the profession.

Each episode features a different challenge, innovation, or perspective on the ever-evolving role of IR, giving you real, actionable insight you’ll be able to use to build a better investor relations program. 

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