Was 1984 The Future, or Are We All Bozos on This Bus?
Many of us Baby Boomers read George Orwell’s “1984” when it seemed in the far away future. I most likely first read it in the early 1970s, when I was a young teen, and then, it seemed like a lifetime away. When 1984 actually came around I was on Wall Street, building a cross border Investor Relations firm before the term existed. It certainly didn’t seem like the future had arrived, but the US capital markets and cross border equity investment were starting to create “the future” we live in today.
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Recently, I came across a copy of a speech given by then SEC commissioner John Shad at a luncheon I attended in July 1984 at the 21 Club. I remember feeling rather important in my (probably polyester) suit listening to the SEC commissioner talk about my world of non-US securities as a game changing trend. It was the most serious commentary on US investment in non-US securities I had heard to date. It was a speech that confirmed to me that cross border investor relations was to play an important role in the future of the US capital markets.
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Keep in mind that in those days, Taylor Rafferty couldn’t introduce itself to potential non-US clients as an “Investor Relations Firm” because there were very few non-American IROs and most of them had other well-established responsibilities in their company (e.g. controller, corporate secretary). Most potential clients who were aware they needed our services didn’t know what those services were called. So we described ourselves as “Financial Public Relations” and proposed initiatives then that align very closely with the investor relations consulting and program execution services Taylor Rafferty offers today.
Leading Investor Relations into a Best Practice Future
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So what does 1984 mean to an IRO today? If you look back at the rate of change over the last few decades, it’s reasonable to assume that pace will continue, maybe even increase, and ideas that seem incredible now may seem commonplace in the span of your career. It’s this experience that informs my belief that there can be positive change in the capital markets and it can be driven by the principles Taylor Rafferty identifies as “Best Practice Investor Relations.” This is the reason I so often take issue with the IR groups and publications that seem too ready to go with the flow of the way things are done today. True “Best Practice” comprises driving change and competing for capital. The capital markets will change, they are in fact changing dramatically as you read this. If we don’t anticipate and try to lead change, Investor Relations will fall further back into a “functionary” role, leaving its capital markets leadership position behind. When you think we live in the future, imagine describing the internet or the capabilities of your mobile phone to someone in 1984.
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Among the statistics cited by Commissioner Shad was the Ericsson $250 million US equity offering on NASDAQ, which was the largest non-US equity offering to date. We were working very closely at the time with Ericsson’s US-based IRO, a highly regarded engineer who had helped develop their digital telephony switch, the AXE. He was sent here to clean up the mess made by the investment banker-led marketing pitch regarding the use of proceeds. Investors thought the funds were being raised to introduce the AXE to the US market, and indeed, that was the basis of the investment pitch. Their expectation was that it would occur within a couple of years following the offering when in fact there were years of testing and analysis still ahead and little clarity on sales prospects at all. You can imagine the one-on-ones were very lively for the new IRO. This was my first lesson in what not to do – or allow others to do – in an equity offering.
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A few years later – 1986, let’s say, I recall sitting in a large group investor presentation we had arranged for Ericsson CEO Bjorn Svedberg. His focus that day was “The Future of Telephony” and I believe he was using an overhead projector (which for some reason was favored by Nordic managements over the 35mm slide projector) to show projections of mobile phone growth in the coming years. Analogue mobile phones were introduced in the US in 1983, but they felt about the same way driverless cars feel to us today: real, with serious people and money behind them, but hard to imagine as commonplace.
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Sadly, I did not save a copy of the presentation, but I do remember the skeptical comments from the analysts and portfolio managers after the meeting regarding the “very aggressive” projections of mobile telephony usage growth, the “that’s science fiction, not investible information” and comments regarding Bjorn’s contention that the future would bring personal telephone numbers that would supersede the importance of our home phone numbers. Some of the analysts in that room went on to be fabulously successful in the TMT (Technology, Media, and Telecommunications) boom that began in the next decade, and that, with a couple of busts in between, continues today. They were not the ones rolling their eyes at Bjorn’s prognostications, they were the ones that believed in the future, and gathered around him after the Q&A session to pepper him with questions.
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American Boomers of a certain strain may also remember a comedy troupe called the “Firesign Theater,” who produced Golden Age of Radio style material that was both spacey and bizarre. It was strange and funny and definitely trippy. One of my favorite lines is from their “I Think We’re All Bozos on this Bus,” set in a futuristic theme park, playing on Disney’s “Tomorrowland.” A newscaster is interviewing patrons asking their views about the future, and one cuts him off with “The future? The future ain’t here yet!” Yes, you had to be there, and probably with a little help from your friends, but indeed the future of Investor Relations ain’t here yet IROs. So make it yours, and then party like it’s 1999.
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For those curious about Firesign Theater, you can find “I Think We’re All Bozos on this bus?" https://www.youtube.com/watch?v=lmWFrMq3qNY The CD is also great for confounding passengers in your vehicle as you roll into the future, and I will be happy to send a copy to the first five readers who request one.