How Much Publicity Should You Seek For You And Your Company?
I was talking with Connor yesterday (an entrepreneur I am working with), and he was wondering if your job as a successful CEO is just to do public speaking. Specifically, he was using Box’s CEO, Aaron Levie, as an example of someone who seems to do a lot of public speaking.
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Now I’m old school. And I grew up in a different industry (the Analog IC industry) than today’s social media and software world. So, yes, the tools of communicating about your company have changed, but the definition of success hasn’t changed.
The CEOs of arguably the two most successful Analog IC companies in the last 30 years were extremely publicity shy.
Linear Technology (Founded in 1981) and Maxim Integrated Products (Founded in 1983) grew to be $1B/year companies.
Linear’s net margins were over 40%! and Maxim’s were over 30%. These were extremely profitable companies, and their stock prices reflected their success.
Interestingly enough the CEOs of both companies (the late Jack Gifford of Maxim and Bob Swanson of Linear) didn’t even hold analyst days for the first 20 years of their companies history! Gifford eventually bowed to analyst pressure in 2002, and the company has been holding analyst days ever since. Swanson never held an analyst day.
Execution is all that matters.
You can do all the public speaking you want. You can do interview after interview. You can spend thousands of dollars on an analyst day. And you know what will happen to your stock price? Nothing.
All your investors care about is how your company is executing. The question is, “Did you meet and exceed your plan?”
Nothing else really matters.
Wall Street was certainly happy with the increased insight into Maxim, but the stock never increased in value. Linear, who never held an analyst day, usually had a higher PE ratio than Maxim and a higher Price to Sales ratio than Maxim.
Why didn’t Maxim’s increased publicity pay off?
It always comes back to the numbers.
The SEC requires you to release a significant amount of financial information (10-Ks, 10-Qs, 14-As). You need to have an annual shareholder meeting as a public company. You can find most companies earnings calls online.
The numbers driven Wall Street analysts have all of this financial information. They talk to your customers. They talk to your competitors. They have detailed financial models of your company.
Do you really think public speaking is going to help increase your stock price?
Now there can be great business reasons for you to be front and center. For example, you could emulate Steve Jobs and try and make a show of your new product launch.
That’s totally up to you.
Let your personality and the needs of the business guide you.
I had a pretty simple rule for the public speaking and interviews I did. I would only do them if I felt it was in the best interest of the company.
So, when we emerged from stealth mode, I did a bunch of interviews with the trade press to help launch the company. It was a good way for the company to get known, and, because I knew the company’s mission better than anyone else, it made sense for me to communicate it.
Being in the limelight is intoxicating.
One of the biggest challenges of being CEO is that many people around you are constantly telling you how great you are. It’s really hard not to let this constant adulation affect you.
You need to make your PR always about the company and not about you.
You’re just a vehicle for getting the message out about your company. You will come off as a fraud if you’re on an ego trip trying to get publicity for the sake of publicity.
For more, read: What Are The 11 Painful Things You Need To Do As CEO?
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