4 key considerations to keep exceeding shareholder, market and analyst expectations

September 6, 2022
 BY 
Robert Peopall

4 key considerations to keep exceeding shareholder, market and analyst expectations

Exceeding Shareholder Market & Analyst Expectations

4 key considerations to keep front and centre of your thinking.

Communicate Regularly with Investors, Market and Analysts

Many organisations assume that they have to do the bare minimum in terms of investor relations communications. Smart organisations recognise that by involving investors in the definition of strategy to shape success it builds confidence, trust and support at the outset whilst allowing additional insights and perspectives to be shared. Always remember that investors hate sudden shocks and not being kept in the loop on developments.

 

Keep the Shareholders Happy

Deliver on your promises on dividends, net-profits and any share buybacks offered. Focus on (1) increasing net profits that (2) enhance earnings per share and (3) aim to increase the average annual return on shareholder equity to keep shareholders happy.

 

Keeping the finger on the pulse

In addition to the three key measures above, there are a whole host of key performance indicators that the CEO should have constant visibility and understanding of including but not limited to the following:

From a sales and customer service perspective:

o  Sales by market, region, country, customer and product profitability

o  Actual sales compared to planned sales and forecast

o  Sales pipeline visibility

o  Customer service performance

o  On-Time delivery performance

o  Volume of complaints, returns and claims raised

o  Cost of service relationships

From a marketing perspective:

o  Strategic and tactical marketing analysis looking at product, place, price and promotional effectiveness

From a Procurement perspective:

o  Vendor performance scorecards,

o  Stock turnover

From a Supply Chain Management perspective:

o  Capacity Management,

o  Asset utilisation,

o  Product cost and quality information,

o  Root cause analysis re: quality issues,

o  Distributor scorecards

From a Financial performance perspective:

o  Profit & Loss,

o  Cash-Flow,

o  Balance sheet,

o  Ratio analysis

o  Day’s Sales Outstanding

o  Project portfolio information

o  Innovation and R&D pipeline

 

Avoiding nasty surprises

Regular communications with investors provides the CEO with the opportunity to keep them informed on progress and provide an early heads up on major risks and issues to avoid having to reveal any nasty surprises too late in the day to act, mitigate and resolve. The CEO should also reinforce this message with their own staff as issues should not be hidden or swept under the carpet only to come to light later.

Staff should be actively encouraged not to sit on issues and instead should highlight them as soon as they become apparent so that the CEO is aware and can also make the investors and stakeholders aware to avoid the media from revealing a problem. The earlier the issue or problem can be flagged the more time there is to prepare a suitable response.