Start Spreading the (Bad) News…  

5 Steps to Presenting Financial Crisis Communications 

Question: Is there ever a good way to relay bad news of this nature?  

Answer: Yes, and there are five key steps that need to be recalled in breaking the news.  

1.  Be in front of the story.  Take a proactive approach and show full transparency.  Do not let interested parties (particularly the media, but especially investors) chase after you for the facts.  

“Show that you are visible at all times,” says Leon Graham, principal with ICB Group, New York.  “Depending on the severity of the issue, get out all information you can initially.”  

2.  Keep everyone in the loop.  Everyone means everyone, from the Board of Directors to the janitorial staff.  Anyone with a professional stake in your corporate well being needs to be addressed of the situation.  

“It is important for management to keep employees informed before going to the media,” says Rich Klein, president of Riverside PR, White Plains, NY.  “This is important for morale and to control leaks.  My main concern is that if you announce layoffs before telling the staff, you will get disgruntled employees going to the media – and they may be telling stories that are not accurate.”  

This also includes both those who have their funds invested in the company.  “Don’t forget to get in touch with your institutional investors and your individual investors,” adds Graham.  

And, of course, make sure legal counsel is aware of what is being prepared (no further explanation required).  

3.  Do not take a one-size-fits-all approach in your external communications.  According to Steve Ellis, president of Ellis International, Darnestown, MD, the company will need to reach out to specific groups that will require individual attention and assurances.   

Depending on the crisis at hand, Ellis notes specific outreach will be required to labor unions (in relation to layoffs), suppliers and vendors (if product output is disrupted), Wall Street (if significant financial hiccups are going to occur), government officials (if the news will have repercussions in the local economy) and, of course, the media (who will certainly seek out commentary from the aforementioned parties).  

4.  Frame the news in a proper perspective.  Things don’t just happen inexplicably.  An explanation of the crisis needs to be addressed, and a mature but spin-free solution also needs to be presented to show the crisis will be contained and not repeated.  

Matthew Papertsian, North America marketing director for Cartesis, a business performance management software company in Norwalk, CT, advises a forward-thinking communications message that acknowledges the causes for the crisis while maintaining confidence that normalcy will be achieved.  “If XYZ Co. is going to restructure or adjust its plan to meet the company’s targets or vision, you could position this as: ‘We have to make adjustments in the current climate in order to continue to provide our internal and external clients with the level of success they are used to at XYZ,” he says.  “Make sure you show the plan for future growth".

5.   Maintain consistency from start to finish.  After a communications game plan is made, stick with it and do not deviate from its message and mission.   

“The messaging has to be consistent throughout the portfolio of documents we discussed, even though there are multiple documents to address each audience,” says Ellis.  
 

Worst-case scenario: A corporation has to announce distressing financial news.  It could be a significant loss, or a massive layoff, or the discontinuing of a major product line (which, in turn, spurs losses and layoffs).