Merger mania continues to spread like wildfire with no signs of cooling off, and the trend-du-jour is for East Coast power brokers to acquire West Coast boutiques in an effort to round out their capabilities menus. Last week, financial giant Chase Manhattan announced plans to buy Hambrecht & Quist - an investment firm that carved its niche serving the financial needs of Silicon Valley start-ups - for a cool $1.35 billion.
While mergers may fuel bottom line returns and investor morale, merging corporations can get burned if they maintain a myopic focus on investors at the expense of other key stakeholders - namely, employees.
In the new book, Beyond Spin: The Power of Strategic Corporate Journalism, digital strategist Kim Daus teams with veteran journalist Markos Kounalakis and SGI communications guru Drew Banks to illustrate how a "newsroom" communications strategy can build credibility and trust among internal stakeholders. The key is to accept watercooler whispering and email gossip as an inevitable part of the merger equation, and to equip employees with facts they can discuss, so rumors won't fester.
The book, due out this week, argues that today's most successful companies are giving their PR teams license to act like reporters. This means a more objective approach to content development for corporate newsletters, intranets, video conferences and other internal communication vehicles. Companies now embracing the "free press" strategy include Boeing, Charles Schwab and PeopleSoft.
Here, the authors explain how traditional journalistic principles can help corporate communicators leverage their effectiveness:
Credibility. If there's bad news, don't try to spin an already disillusioned workforce. Credibility is the only currency a corporation has with its shareholders, customers, suppliers, partners and employees. The knowledge-based corporation may not be financially bankrupt if it does not follow these principles, but it can lose the intellectual capital that is necessary for innovating and maintaining a competitive edge.
Competition. The idea that an internal news organization should compete with the plethora of external and structurally independent information sources is sometimes difficult to accept. But the seamlessness and transparency of the information flow today does not label arriving information as internal or external - it only allows for the information to be assessed by its recipient as either more credible or less credible.
Timeliness. If your corporation has a major announcement, make sure employees hear it first. Staff especially don't want to hear about bad news from external sources. It is not acceptable for employees to hear about planned layoffs on the radio while driving to work, or in the morning paper as they sit down to breakfast.
Accuracy. Misinformation is worse than no information at all. The journalistic credo, "Get it first.but get it right," is even more critical in a competitive business context because it can make a difference in a corporation's survival.
Free Press. Journalistic objectivity may be a difficult precedent to set, but it's crucial to success. If your internal "publisher" is aligned with your company's overall goals, purpose, mission and value system, that person should be given the freedom and management acceptance to pursue necessary stories independently. If management is pushing the publisher to do a feel-good piece on something that is irrelevant to the purpose or contrary to the values of the corporation, the publisher should have the guts, authority, smarts and editorial clarity to counter the request.
Bylines. To encourage accurate reporting and staff accountability, include bylines on all published work - even on corporate Web sites. Without authorship, the corporate party line will be pasteurized and processed until all the flavor and nutrition has been extracted.
Multisourcing. Encourage corporate reporters to consult multiple sources. Cross checking the perspectives of engineering, finance and marketing, for example, will ensure greater accuracy of information.
Avoid Creating a Monster
There are two caveats to this model. First, the strategy will only work where there are strong partnerships between I/R, PR, internal communications, sales, legal and executive teams, according to co-author Drew Banks, director of employee communications and integrated performance support (deep breath) at SGI.
"You're essentially airing your dirty laundry," Banks says, "which means the communicator needs to understand the boundaries between what they can communicate and what they can't [legally]." This requires a tight flow of cross-functional information.
Second caveat: the free press model is based on democratic principles, and therefore won't work in the presence of a dictatorial CEO who insists on funneling all forms of communication through the executive suite. If this is the case, don't try these tactics at home.
Beyond Spin: The Power of Strategic Corporate Journalism is due out this week from Jossey-Bass Publishers. (Drew Banks, [email protected]; Kim Daus, [email protected]; Markos Kounalakis, [email protected])