Many executives spend too much time communicating with investors they would be better off ignoring. Robert Palter of McKinsey & Company's Toronto office, and colleagues Werner Rehm and Jonathan Shi, say you need to segment your investors, identifying those who matter most.
"These important investors, whom we call 'intrinsic' investors, base their decisions on a deep understanding of a company's strategy, its current performance, and its potential to create long-term value," the consultants write in the McKinsey Quarterly.
They take a position in the company only after rigorous due diligence of its intrinsic ability to create long-term value, and are more likely to support management through short-term volatility. Executives who reach out to them, leaving others to the investor relations department, will devote less time to investor relations and be more likely to align the company's intrinsic and market value.
Harvey Schachter