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I help listed companies communicate effectively.

Too often companies have multiple digital team members and digital service vendor companies, and believe this traditional hierarchical management structure is the way to go.

I bet they are not getting the efficiencies they were looking for.

Metcalfe’s Law can help explain why it’s so difficult managing a coherent integrated digital corporate communications team.

Negative issues are more pronounced in investor and corporate communications because much more is involved. Inputs are fragmented, diverse and outputs have to be verified by a number of parties.

Either way, teams must be kept small. This has to do with Metcalfe’s Law and the structure of the human mind.

What is Metcalfe’s Law?

Originally presented around 1980 by Robert Metcalfe, an Internet/Ethernet pioneer, his law captures many of the effects of such networks.
The effect of a network (in his case, telecommunications) is proportional to the square of the number of connected devices.
Simply, a network’s value increases exponentially with size. So the more people who use it, the more their participation is enhanced and the more powerful the network becomes. Just look at the Internet, for example. This exponential growth is generally considered a good thing. Especially in digital networks.


The converse applies in the negative sense. The more people involved in administration the more difficult communication becomes.
This is the problem affecting corporate and investor communications teams and is exacerbated by limited resources and budget.
Think too, not just of the digital connections, but also of the social interactions – dynamic connections at work between team members from the communications perspective:

  • Administrator
  • Content originators
  • Creative professionals
  • Content verifiers
  • Content publishers (website hosts and social media managers)
  • Engagement managers (customer and sales support)
  • Ultimate decision makers

The crux of the complexity issue can be progressively illustrated as follows:With two members in the team there’s only one line of communicationEven just a small increase in the team size can greatly expand the number of communication lines available.

Growing a team from three to just four (the addition of merely one member) doubles the lines of communication from three to six. With five members the communications lines increase to 10 and to 15 (below) when one additional member is added. It is not uncommon for communications teams to comprise 8 members.

Metcalfe’s Law in Organisations

But here lies the problem – The human mind is not good at handling a lot of relationships.

Scientists tell us that our social world is very small-scale. We can have strong relationships with about five people only and less intense relationships with about 15 people.

The same applies in investor relations and corporate communications teams. There are natural limits to the number of people we can communicate, cooperate and operate with. Companies struggling with this concept are incurring considerable hidden costs (aka transaction costs).
Here’s how our AfricanFinancials team deals with Metcalfe’s law (or most of it anyway).

Centralise, Integrate And Automate

We Keep Our Teams Small And Centralise, Integrate And Automate

We try to keep our client and IR and communications teams to not more than 4 members.
Accordingly their experience and skills and their ability to manage every element of the digital communications ecosystem needs to be first class.

Avoid Hierarchies – Keep It Simple

Inefficient organisations create hierarchies (ie the position of “middle manager”) to address challenges.

But this creates two problems.

  • Firstly, it affects the well-being of staff who dislike being stripped of responsibilities, such as communication and coordination. This isn’t particularly motivational for them.The parallel in communications teams is that team members are (or should) be empowered and motivated and shadowed by their peers.
  • Secondly, the advent of digital technologies lowering transaction costs for one-to-one and many-to-many interactions to essentially zero means everyone can communicate with anyone at any time. But, has to be managed. Messaging/communications tools such as Slack help a lot, but ar e not effective unless part of a structured communications framework involving SCRUM meetings. STAND-UP meetings with supporting SOPs, SLA, policies and checklists.

But, as Metcalfe’s Law demonstrates, when there are no managers, the size of a team must be kept small. And even then, teams are made up of humans, so companies must ensure that members don’t get overwhelmed with too much communication and too much information.

Is your company using the right team size in the management of its online investor relations?

The use of multiple agencies and staff members to engage your investor communities results in too scattered an approach. Messages become muddled and costs rise. Inefficiencies from having the wrong size corporate communications and IR teams will manifest themselves in:

  • Incomplete content
  • Out of date content
  • Insufficient visibility with/amongst stakeholders
  • Insufficient online engagement
  • No content, outreach or engagement at all

Crafting a strategy to tighten up and grow investor communications networking that a single, focused team can provide is essential to increasing productivity/efficiency/creating a system that can efficiently communicate a company’s corporate brand or brand messaging.

How I help companies structure efficient communications teams

I advise companies on how to optimise their presence online to ensure their content is up to date, accurate and complete. Consistently so.

⚫ My team assists with what’s needed
🔴 We then enable analyses of feedback to then influence strategy

Follow my hashtag #gIRaffe





Turnkey, communications solutions for every listed company in Africa

Speak to us about IR solutions for your company

Speak to us about IR solutions for your company

AfricanFinancials works with Boards, CEOs and companies who want to build sustainable businesses through better corporate and investor communications. Our focus is online investor relations to promote secure two-way communications with investors and stakeholders.