Year: 2016

Learning: Tips for Conducting Informational Interviews

Informational interviews provide one avenue for learning about a business, developing professional relationships and sharing ideas.  We initiate informational interviews as job seekers, entrepreneurs and researchers to tap the experience and knowledge of others. As with job interviews, successful informational interviews rely on preparation and practice. How?

  1. Write an interview guide. This is the single most valuable way to prepare. Whether 30 minutes in person or 15 minutes by phone, know what you are going to ask to make the most of the time available. When developing your guide, ask yourself “What do I hope to learn in this interview from this person?” Defining the purpose of the interview helps you order and phrase the questions correctly.
  2. Start with general questions and move to specifics. Begin with general questions about the industry, for example, before getting specific about the person’s responsibilities or research.
  3. Learn about the interviewee prior to the interview. Know the person’s background and education. The interviewee is doing you a favor by setting aside time to meet with you; it is your job to be prepared.
  4. Do not exceed your requested time. However, be prepared to stay longer if the person is willing.
  5. Dress as if it were a job interview. First impressions always matter. Get to your appointment a few minutes early and be courteous to everyone.
  6. Ask open-ended questions which promote a discussion. Listen and guide.  And don’t interrupt; you will gather more information and stories.  Like I learned while counseling students in college, the greatest gift is often a sympathetic ear.  Work through the history, and the issues will come out.
  7. Avoid body language that indicates a lack of interest. This includes folding or crossing arms, slouching, or looking around the room. Turn off that cell phone and don’t check it. Take notes, and keep the pen moving.
  8. Share. Productive informational interviews often include active two-way exchanges and dialogues.
  9. Say “thank you.” Write a brief note which restates your appreciation for this person’s time.  State how the interview helped you move forward in your research or career development.

Finally, when planning informational interviews, consider talking to a range of individuals. Interesting and insightful information often comes from salesmen, administrative staff and customer service technicians. They have direct customer and product contact and may know where businesses struggle. And direct communication with those on the inside gives us insight and a feel for the real issues in a business or industry.

Analyst’s Creed

You are an Analyst, a warrior shrouded in mystery and feared for your ruthlessness with Excel. Your actions can throw Board meetings into chaos, and your existence will shape the company during this pivotal moment in history.

[Inspired by the Assassin’s Creed]

Finance is the language of managing resources as investments.  It addresses three questions.  First, the investment decision considers, “How do we screen, value and rank our investment alternatives?”  Second, the financing decision asks, “How do we pay for this investment?”  Third, the exit or sale decision asks, “How and when is the appropriate time – during good markets or bad – to reduce our position or sell the asset to maximize profits?”

Investment objectives matter.  Analysts use finance to compare projects and identify those that satisfy the predetermined criteria of clients or managers.  This facilitates the investment decision by screening out those that we can set aside, and those that we should consider further.  For example, for timberland investors, a preliminary screen may include geography, deal size, information quality, and basic financial metrics. If the potential investment satisfies the initial screen, then managers can allocate the human and financial resources required to investigate further.

When serving as analysts, we make investment recommendations.  It is our responsibility to be transparent and truthful in our assumptions and analysis, and practical and clear in communicating recommendations and ideas.  For me, this mean analytical and research professionals should also be able to differentiate and explain the pros and cons of alternate approaches to their work.

As analysts and researchers, how can we better support our firms and clients?  Over time, I have found few methods as effective for increasing analytic rigor and reducing errors as repeated application of financial tools in a range of cases to highlight the variety of unique questions and attributes associated with different assets. Through these trials, we develop the context and intuition to provide valued guidance.