As an Analyst/ PM you will conduct 10’s if not 100’s of interviews. In this post we look at how to make the most of a management meeting.How should you make the most of your time and get the answers that you need? How can you Quickly build rapport with management and IR. We reached out to Communications Expert Kit McGinnity of Melior Advisors for the Answers
The Management Meeting
Management meetings, now, more than ever are important in our evaluation of a High Yield Firm’s prospects. Asking questions in person, on Zoom or on the phone is essential in building trust and confidence in a company. Currently, access to management and their ability to answer questions on the Impact of Covid-19 is gold dust.
Additionally, meetings allow analysts to get up to speed with new issuers, get a better understanding of business models and industry dynamics. In the High Yield Bond market management’s refusal to take questions or engage investors is one of the largest red flags investors will come across. Therefore, being able to get the most out of these “golden minutes” is a skill worth developing. Enter Kit.
When I first met Kit it was part of a communication coaching program put together by my employer. The focus was on presentation,expressing yourself clearly and getting your key messages across.
One of the best parts of the coaching was understanding how to manage pace; managing silence is critical to a natural, conversational style but self-awareness is needed under pressure. Having a conversational style allows your audience to focus on your key messages and engage more thoroughly in what you’re saying.
The second thing that has stuck with me is the importance of creating and using mental imagery to help get your message across, making it memorable, as well as conveying meaning. Now, these aren’t necessarily going to help you in a management meeting. They do point to the benefit of being prepared and having a game plan to build rapport with management you may have never met before. Below are Kit’s answers to our questions.
EHYO : “Should you write out your questions before hand?”
Kit :”It’s probably best to write some bullets, but not the script of the actual words you will use. Management will respond best when they feel they are in a conversation with you, rather than being asked questions that feel more formal.”
EHYO : “How much time should you budget for a question?”
Kit : “Shorter questions with follow-ups – i.e. a back and forth – are more engaging that multi-part questions and long responses, if the situation permits. You’re aiming for conversation.”
EHYO : “How can I create a strong level of engagement with management/ IR?”
Kit : “A powerful way to build rapport is to show someone you understand them. A good exercise I get clients to use is before meeting someone, they draw up a list of their counterparts ‘wants’ and ‘fears’. It’s a way to empathise with their situation. You might write down in the ‘wants’ column: ‘recognition of integrating the acquisition last year/ to be recognised as a big player / proud of margin expansion in US division verses competition’, and in the ‘fears’ column: ‘nervous about new market entrants / perception that analysts overly blame them for CTO churn over last few years / widget ‘x’ production failure wasn’t their fault’. You will naturally phrase questions phrase this in a more engaging way and avoid getting people’s backs up. Walk a mile in someone else’s shoes….”
Meetings can feel rushed – especially if you are in a many on one situation. Ensuring you have your questions answered, whilst leaving time for others is tricky. Noting who is in the room and the exchange of business cards makes post meeting follow ups easier.
One thing to remember is that the time you have is meant to give you a better understanding of the business. There may well be other investors present with more knowledge of the sector or company than you do. if you have a simple question ask it, don’t be afraid of what others think as they won’t be the ones writing your investment thesis.
However, ensure you have done your homework before the meeting – looked at results, presentation and any bond documentation. Whilst you should ask simple questions key to your understanding, you don’t want to be that guy/girl who is asking questions that have been addressed in documents you should have read.
By knowing what issues you need to ask about, be it to understand revenue growth or be able to model working capital better, having a mental tick list will help you ensure you come away with the your most critical questions answered.
Take your time with questions, if you are not feeling confident remember that management/ IR are there because they want to answer your questions to get your investment or to keep you invested.
EHYO : “If the interview is in person what body language and gestures should I be using?”
Kit : “The more you focus on it, the more unnatural it will be. If you’re self-conscious, just try to ‘shake out’ and imagine how you’d sit chatting to a friend. But do be aware of your audience – an introverted management team probably won’t react well to wild gesticulation and exaggerated bonhomie for example”
EHYO : “How do I spot when people are being disingenuous or giving a straight answer?”
Kit : “Trust your gut. A trick head-hunters use when asking a candidate about their current total compensation, is to ask the same question several times in different ways in the meeting, you may get different responses, or a feeling for how truthful they may be.”
EHYO : “I need to ask a question that I know management will not like but the issue needs addressing?”
Kit : “Be direct, but empathise if you can – say, if it’s been tough for everyone in the sector, or there are factors outside their control. Ego can be important – if you can avoid implying blame you may get a more honest answer.”
EHYO : “What if there is a “question hog” who is determined to have their questions answered and is not giving others opportunity to speak? How do you intervene? Is it best to appeal to management and have them police the call or should you call the question hog out?”
Kit : “Difficult one. You could try: “Thanks John, before I ask my question, I can see we have 20 minutes left and 10 people still to ask a question; shall we aim for 2 minutes each? If we have time left over we can come round again.”
EHYO : “I do not feel overly confident – how should I deal with this?”
Kit : “Try to occupy yourself with the management team’s perspective by doing the ‘wants and fears’ exercise I outlined earlier. 2 simple rules: First, get to the point without hedging and caveating questions, and second, don’t let yourself be rushed – take a moment, draw a puff on your cigar, and ask the question.”
EHYO : “What should I do if management’s responses seem uninterested? How do I get them to engage?”
Kit : “You could consider referring back to their management presentation. Or even quoting them and asking for further comment. Ask a question on something they’re excited about, and then follow up with a tougher one”
EHYO : “What should I do if management are acting defensively?”
Kit :” Make sure you’re not being assumptive – check they agreed with the premise of any question. Ask them an ‘open’ question such as simply for their view on a topic in general. You can even try and ‘lance the boil’ with a question like ‘what do you feel the analyst community is getting wrong when they think about this topic’..”
Ideally at the wrap up of a meeting you should suggest to management that you may have follow up questions and who would be best to direct them to.
In doing this – if you do have further questions – it won’t be a surprise to management and they have already mentally okay’d the idea of responding to you. On a new issue roadshow it may prove tough to get the answers as everyone is working to a tight schedule.
Thank people for their time and follow up with a thank you email to management – it takes seconds and helps build rapport.
EHYO : “I need to summarise the call internally – what is the best way to do this?”
Kit : “I’m sure you’ll know the aphorism on this topic attributed to Mark Twain: ‘Sorry I wrote you a long letter, I didn’t have time to write you a short one’. Generally people want to read your conclusions, and then see you substantiate them with facts and examples. They can then decide whether they agree. Try to formulate your 3 or 4 most useful takeaways, summarise them and then back them up.”
Kit McGinnity founded Melior Advisors in 2013.
He and his team focus on coaching and communication in the Financial sector. They have extensive experience in working with blue chip management, private equity, equity analysts, investment firms ,investment banks and politicians.
Teaching people to communicate well, present with confidence, Melior’s experience has helped multiple clients achieve their goals.
If you would like to speak to Kit about how he could help you send an email to: [email protected]
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