Launching an IPO without employee commitment is akin to smashing champagne bottles on the helm of a ship without a crew. So when Standard Insurance Co. (now StanCorp Financial Group), one of Oregon's oldest private companies, received permission from the state's insurance regulators to demutualize, the first order of business was getting employees educated and on-deck.
"We needed to connect employees with a project that was very technical and complex in nature," says John Mangan, Standard's assistant vp of public affairs and communications. "Particularly long-term employees." While actuaries and financial-types focused on the numbers, the communications team assumed responsibility for showing employees of the nearly century-old firm how the IPO would affect them in terms of changes to the company's compensation structure, 401k plan, and soon-to-be-introduced stock options. One considerable order of business was assuaging fears about mergers, downsizing, and relocation of corporate headquarters. "People had been reading in the paper about Oregon companies being sold to out-of-state companies, and they were worried," Mangan says. "In Portland, we're the last and only financial services company of any size based here. So our goal was the alignment of employee interests with the company's profitability."
Standard received its IPO permission notification in January. To open communication lines quickly, Mangan's team set up phone extensions that employees could call with questions. Q&A interviews with company CEO Ron Timpe were then posted on Standard's intranet, along with profiles of the IPO plan. "It was usually a main topic of conversation at employee meetings," Mangan adds.
Once employee concerns had been addressed, the next step (the fun part) was getting people excited about the change. To further its commitment to employee participation in the IPO, Standard hired KVO Public Relations (also based in Portland) to stage a live Webcast on the day of the firm's announcement to go public from the floor of the New York Stock Exchange. The catch: by the time KVO was clued into the project, the announcement was two weeks away, scheduled for April 16.
KVO quickly finagled a permit to show the Webcast outdoors in the fountain plaza at Standard's Portland headquarters. "We also had to secure a special parking permit for the truck so that we could adequately 'see' the satellite," says Than Clevenger, a vice president at KVO who, in a former life, worked for H&K Washington and managed satellite feeds for the Kuwaiti government during the Persian Gulf War. This was no small task, he says, considering the number of tall buildings blocking the sky in the city's downtown district. The truck had to have a beeline view of just the right patch of sky. Otherwise, the Webcast wouldn't work.
Next, KVO reserved satellite transponder time for the day of the event, and contracted with the Manhattan-based Webcasting vendor Media on Demand to encode the satellite transmission in real-time on the day of the initial public offering.
On April 16, Clevenger was on-site in New York, scrambling to cut together a 7-minute VNR featuring footage from the stock exchange floor and other highlights. "It was a hard deadline because the tape had to be edited by the closing bell," he says, when Timpe would make his speech. The VNR was later sent to national news media and other key stakeholder groups.
Meanwhile, back in Portland, roughly 400 of Standard's 1,700 Portland-based employees spilled into a tented viewing area in fountain square, where they were greeted with cake, beverages, and chocolate coins embossed with the company's new ticker symbol (SFG) and IPO date. On giant screen TVs (IMAGs), they watched the ringing of the closing bell at the stock exchange, followed by Timpe's speech. Employees in Standard's satellite offices throughout the U.S. were able to view the event in real-time, although Standard restricted employees from viewing the event from their desktops to keep the Webcast from crashing.
"We had to limit the number of lines that were connected at any given time. So we asked each field office to have only one line and to tap in from outside the network," Mangan says. Those without Web access were able to listen to Timpe's speech via an 800-number linked to AT&T conference call services.
Holding the event in a public location proved a shrewd move. The fanfare of the event drew interest not only from Standard staffers, but also from passers-by and the media. The Oregonian newspaper later ran a close-up photo of Standard employees fixated on the big screen, with the headline, "Live from New York."
KVO's event budget for the whole shebang was $30,000, but they came under budget - around $25,000.
"I want to remind you that this is really just the beginning of a new chapter in our long history," Timpe told his audience as he spoke from the floor of the stock exchange. And so it begins.
(Mangan, 503/321-8541; Clevenger, 503/221-2374.)
Facts & Figures
- Founded in 1906, Standard insurance (now StanCorp Financial Group) operates nationwide, service nearly 29,000 employers groups representing more than 4 millions employees. The company provides product to fund retirement plans, as well as other insurance products.
- Standard was the 10th heaviest traded stock on the NYSE on the day of its IPO. Nearly half of Standard employees are now participating in the company's newly introduced stock purchase program (whereby they can purchase shares at a discount).