The world seems like a different place
The world seems like a different place. An already weakened economy plunging further into recession; the US and Britain at war against terrorism; massive layoffs; airlines losing billions of dollars a day; people buying gas masks and chemical suits; and the Manhattan skyline devoid of a pair of major landmarks.
Yet most of this sense of change is but a side effect of our rattled collective consciousness. What happened on September 11 did not so much change the world as raise our awareness of a threat that has been lingering in the shadows for years. Thus our state of mind switched to fear. And now we find this fear wreaking havoc on our businesses, our investment portfolios, our travel plans and our emotions.
With investor optimism hitting a new low, shareholders are turning to IROs for answers about economic recovery. As one investor relations officer comments, 'The questions coming from investors are not company-specific. What people want to know is when the economy is going to bottom out.' A simple question with no easy answer. Four months ago, market analysts had high hopes for the third quarter and even higher ones for the fourth. Now it seems nothing can turn this bear around.
It's too early to tell whether a damaged US economy will trigger a world recession. Economists simply have no reference point to measure the life span or influence of this economic lull. Economist Paul Krugman suggests a disaster can hurt an economy in one of two ways: it can reduce supply or it can reduce demand. The terrorist attacks on the US have not much interfered with production, but they have quelled the demand for products and services. Fearing the unknown, people have stopped buying as many things - stocks included. So a recession may be an effect of our new mindset. It's a slowdown caused by a pervasive fear.
This is the most challenging of times to be practicing IR. Gaining visibility for a company - no matter what the size - seems to be one of the toughest jobs in this environment of uncertainty. IROs are finding themselves simplifying their investment stories even further for the financial community. No-one, it seems, has very much patience right now.
The landscape of investor relations will continue to shift. Virtual meetings like webcasts and conference calls may become the most common form of interaction between investors and companies as travel is cut back. These cyber-unions will never entirely replace face-to-face meetings, but they're doing a pretty good job right now.
At times like this it's difficult to have perspective, but perspective is exactly what we need. Adjusting to the new economic and cultural environment means understanding the forces that shape our group mind. Right now the driving force is fear, when it should be reparation. In coming months this will undoubtedly change, hopefully moving towards a better understanding of our new world. For IROs, those simple questions that seem unanswerable now will reveal themselves in time.