Confidence in Crisis
A crisis is any situation that disrupts a company’s operations, undermines the loyalty of its customer base or harms its financial performance. In short, a crisis – be it related to the underlying business, regulatory action or shareholder activism – represents a significant risk to an enterprise.
For the financial sector especially, rebuilding investor trust and value is a costly proposition. Never have managers been more compelled to address investors’ complaints over market losses than in such a time of economic uncertainty. However, the communication behaviour of most financial institutions has shown that strategic, crisis-oriented communication is simply not taking place in many companies.
Reputation can be a company’s biggest asset. Reputation management is first and foremost about building relationships with key stakeholders that includes communicating with employees, engaging with clients, reacting to investor concerns, collaborating with government, partnering with the media, and well, everything in between.
It is important for organizations to realize that different stakeholders make different assessments and not all stakeholders share the same view of what your business’ reputation is. The personal experiences, perceptions and expectations intrinsic in relationship building are what complicate the reputation management process. The values of these groups differ and change over time. What was important yesterday may not necessarily mean as much today, and can even be of little significance to some stakeholders. It is, therefore, important to keep your finger on the pulse of what aspect of the business is important to which stakeholder group, and to make sure that your actions and communications are geared towards addressing these needs.
Managers in today’s competitive market can no longer afford to be in the middle of a media firestorm without a plan of action. How well your company communicates in a crisis could be the difference between simply surviving, or thriving and strengthening the brand. Companies must strive for openness and above all, a willingness to accept responsibility in order to rebuild confidence.
In a crisis, the main focus of public relations is rebuilding corporate reputations and restoring confidence in the organizations. What should we keep in mind with regards to this? Here are some key attributes we’d like to share that should drive any crisis management plan – before, during and after the storm.
Crisis Management – Before
Build the right team: Prior to the crisis, put together a crisis communications team. The key players should include legal, public relations, compliance and investor relations professionals. Hold regular meetings to ensure that all the team members are on the same page.
Train the company’s spokesperson(s): It can be quite damaging, not to mention, challenging for an untrained spokesperson to speak to the media directly. Companies need to allocate adequate resources to ensure communications specialists have the ability to deliver accurate and timely information to investors and a public who demand quick answers.
Crisis Management – During
Determine key messages: Ensure that anyone who is telling the story is delivering an accurate message, both internally and externally. At a time of crisis, clarity, consistency and conviction are critical to effective communications.
Be authentic: Companies must take ownership for what’s happened. Do not deflect blame or fail to express the impact that the event has had on investors. A company’s ability to empathize with its investors’ needs, concerns and emotions will go a long way towards restoring investor confidence.
Full transparency: Provide investors with all of the information they need to help them understand what’s happened, and the implications for the company going forward. Being transparent requires courage but it may be the only way to rebuild corporate reputation.
Define the new order: Make sure the company clearly articulates what is changing as a result of the crisis (whether it’s product, people, process or organizational structure). Define the next steps, implications, and how you will keep investors informed.
Get the news out early: This is critical! Make sure your investors, their partners and any other intermediaries hear the story from the company first. You have to control the message.
Crisis Management – After
Debrief: Identify what worked and what didn’t. Use what the company has learnt to refine your process and protocol.
It is important to remember that the best preparation for a crisis is the long-term fostering of relationships with stakeholder groups. By doing this, companies can build up goodwill which they can draw on in times of crisis. And these days, when news cycles are measured in minutes rather than hours, rapid responses to crises are absolutely essential to winning any communications battles. Follow these simple steps to get in front of clients early and companies can survive the crisis – and emerge even stronger.
Posted by Irene Gomez, CIO, Corp Media