Immediate and long term crisis management, are you experiencing loss of trust?

Thursday, April 16, 2009

In times of economic hardship communication is put under tremendous pressure. Many times it’s the world around us that sets the agenda. The past autumn and winter we have seen many companies and persons had their wings clipped and in some cases even lost their licence to operate. This is the result of the crisis taking such proportions that companies’ creditability has been put out of the running.

Communication strategies and the messages communicated are generally designed for the “good times”. Their goal is to raise awareness and interest from the media, investors and other stakeholders in areas such as booming markets, high profitability within a specific product area or a new and promising CEO.

In troubled times and recessions, the topics we talked about before may suddenly seem risky and insecure. The current financial crisis is a good example. Today many companies realise how investors mistrust growth or profitability goals, and are more interested in questions regarding remuneration, debt structure, bank relations and interest rates. Companies going through downsizing in their organisations are challenged to find a consistent message concerning layoffs and necessary cutbacks which holds its credibility with personnel, business partners, media and investors.

Some companies prefer to communicate as little as possible during bad times hoping to re-enter the scene when business is improving again.  This is a risky strategy for various reasons.

The media is not likely to accept this low profile strategy and will, on the contrary, increase its attentions towards the company. In addition, when the general circumstances finally improve, it might be even harder re-entering the scene and raising interest in what the company stands for. One must act when in a crisis and foremost act correctly, keeping ones head held high as well as showing compassion. This subsequently may offer opportunities in improving creditability and trust making companies more capable to manage critical and hard situations.

The safest strategy is to stand well prepared for those questions a recession raises. This includes having clear and consistent answers for all those difficult questions likely to be raised. Internal communication is of utmost importance in times like this, as productivity always suffers if internal gossip and information leaks are not handled with well formulated messages.

H&H has assisted clients in crisis management and financial communication during both upswings and recessions. If your communication needs to be revised in order to accommodate these tough times then you are more than welcome to discuss this with us.