Todd Austin | Crain's Twin Cities

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Todd Austin

Background:  

St. Paul-based MGC Diagnostics is a maker of diagnostic systems for the detection of cardiorespiratory disease. A publicly traded company, MGC has about 160 employees and $40 million in annual revenue.

The Mistake:

I underestimated the importance of investor relations.

I've always been a nuts and bolts type of businessperson. I'm good with product management, customer service and support, group management, all the internal functions that make a company go.

When I took the CEO job in 2014, I focused on what I knew best. But as the months went by, I noticed something: more and more people were asking me questions like, 'So tell me more about what your company does?' I'd chat up a potential investor at a conference and they might say, 'you know, I learned more in 15 minutes talking with you than I did in two hours of research on your website.'

It really started to dawn on me that I was completely neglecting the investor relations part of my job.

 

All people have to go on is our mission, our values and our long-term strategic plan. So its absolutely essential that we communicate that...

 

The Lesson:

You have to push yourself to learn new tricks and expand your expertise--especially when something falls outside of your comfort zone.

When I wised up to the fact that our investor relations effort was thin, we brought in an outside firm to help us nail our elevator speech and flood our website with high-quality information. Since then, it's become really apparent to me how starved people were for information.

You know, when you have a giant publicly traded company, there's an investor relations staff feeding reports to the CEO. Big companies will provide investors with precise metrics to help them figure out if a company is performing up to its potential. But when you're a small publicly traded company, you're not putting out these robust financial statements. You're not giving people an expected earnings-per-share, or expected revenue. So all people have to go on is our mission, our values and our long-term strategic plan. So its absolutely essential that we communicate that part with as much clarity and depth as we possibly can.

One surprising side benefit of all of this is that it made my job easier. Of course, I'm always happy to chat with potential investors. But it really helps if I'm not having to explain our mission to everyone I come across. I'm sure they appreciate not having to hunt down the information they need to do their due diligence.

 

You can follow MGC Diagnostics on Twitter @mgcdiagnostics.

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