We're steering through a frightening financial crisis that has devalued home prices, put thousands out of work and capsized the finance sector. Questions abound, far outpacing the answers. For your customers, your employees and shareholders - who face mortgage payments, rising costs of living, dwindling investments and fear of losing their jobs - these questions aren't rhetorical. They are looking to you, whether you are their boss, an important community figure or the steward of their investment, for leadership and answers. More than ever, the spotlight is on you.
And so these many questions prompt another one: What is the role of today's CEO as it relates to communication during turbulent times? Should he or she be out front, fielding these questions and providing the answers? Or are the risks too great - is a CEO, and the company, more likely to survive if he sits quietly in the safety of his corner office?
The impulse to be silent is understandable. Wall Street's "Fear Index" is at a five-year high. Managers, obviously, have significant fears of their own. Will today's statement be erroneous tomorrow when circumstances change? Will I make a bad situation worse? But the well-intentioned silence of some of our nation's leading companies is only feeding that fear. Confusion and apprehension breed mistrust. A September article in The New York Times, "Lessons From a Crisis: When Trust Vanishes, Worry," noted that the failure of industry leaders to publicly "connect the dots" helped spur the economic crisis. Absent that explanation, consumers viewed the prospective Wall Street bailout through a skeptical prism, essentially as a taxpayer-funded handout to the fat cats who'd caused the crisis in the first place. For CEOs to restore that trust, they need, essentially, to demonstrate why they've earned their position in the first place.
While it may seem counterintuitive, communicating now is an absolute imperative. It is less a choice than a duty. Now is the time to communicate more, not less. Companies that remain silent do so at their own peril, endangering the employees, shareholders and communities they are tasked with serving. They may even endanger their own future. While the present financial crisis has heightened the need to communicate, we can look to the not-so-distant past to see the dangers of leaving the information vacuum empty. Four years ago, Merck paid a steep price for its silence during the Vioxx crisis, when one the company's signature medications underwent intense medical scrutiny before being pulled from the market. Though the company had a solid, well-established reputation, and issued all required disclosures via news releases, the company's management elected to keep a low profile. The company's high-level communications during that period were reactive. Merck's reputation suffered immensely. Eventually, Merck's new CEO, Dick Clark, admitted that Merck was ill-prepared to handle a drug recall of that size and should have developed a sensitive system geared to detecting early rumblings before they became earthquakes.
Right now, the value of smart communications has simply never been higher. So, what should a company do during this time of unprecedented turmoil? Say nothing and wait for things to get better? Just the opposite needs to happen, and with lightning speed. At a time when all companies are being painted with the same brush, companies need to communicate more openly than ever before. Whether the news is good or bad, companies need to communicate to their key stakeholders to differentiate their strategy, to engender faith in management and to clearly articulate their corporate assets.
And, the critical value of internal communications has also risen in turn. The manner by which important information is shared with your employees is crucial to maintaining internal confidence and goodwill. In the most challenging environments, the ability to retain your best people is paramount - they own your customer relationships and serve as the face of your brand. You will need their support to weather the current storm, as well as in the future when the economy does eventually recover and the war for talent intensifies.
Equally critical is the fact that doing the right thing now serves a more important, longer-term imperative - positioning you for growth when conditions do improve. Good companies that remain silent now risk being swept away with the bad. Those companies that earn the trust of their stakeholders today via steadfast communication will be the ones who thrive when the environment normalizes. You don't need to have all the answers �� frankly, no one does. Certainly, some issues are so complex as to defy an easy solution. Trust can be earned, and confidence restored by simply acknowledging the issues and outlining your plan to find the answers. Strategic and thoughtful communications can inspire confidence in the plan and your ability to execute it well. High levels of stakeholder trust and confidence serve as valuable currency to carry you through the current climate.
When times tighten, new "building blocks" emerge that must be added to the foundation of reputation. Qualities such as authenticity, integrity, transparency and consistency become paramount. In an environment where suspicion and fear run rampant, constituents will judge CEOs not so much by the readiness of their answers but on their willingness to field questions in the first place. To engage in debate. To lay out the process by which answers will be reached. Today's CEO needs, in essence, to appreciate that the true test of leadership comes when the circumstances are challenging.
None of the above is to suggest that a CEO's worth should be measured in word counts. It is merely a matter of trust and confidence. Corporate reputations rely on trust - trust that the company's products or services will be of high quality, that the business will behave in a responsible manner, and that the CEO was out front, offering hands-on management and guidance.
When the inevitable questions are asked - by your employees, your communities, your customers or your shareholders - someone will respond. History has shown that people prefer any answer, even a wrong one, to no answer at all.
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Five Ways to Build Credibility and Trust in Uncertain Times |
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Communicate, communicate, communicate: In today's environment, no news is definitely not good news. Stakeholders want to hear from you more often, even if the content is shorter and excludes specific solutions to challenges.
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Define interim success: Set mini-benchmarks by which you can be judged and against which you can communicate progress. By defining interim milestones of what constitute small success, you satisfy shareholders and board members, while simultaneously building loyalty and enhancing productivity among employees.
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Reinforce key messages: There are statistics showing that people need to hear things three times before they actually believe it. Via multiple communications channels and through multiple voices, communicate your company's core messages to reinforce your mission. Once stakeholders hear the same messages time and again they begin to believe it and your reputation stays intact.
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Reputation is your friend: Your peers greatly impact how your company is perceived, so don't leave it up to anyone else but yourself to define who and what you are; and what you are NOT. Ensure your messaging and actions accurately address and respond to the perception of your external constituencies.
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Substance over form: Over-emphasizing form vs. substance can have the opposite effect in times like today. In fact, something that appears too slick or too expensive may actually impact the company's reputation negatively. And while it's important to maintain your brand standard-especially for customer-facing brands-for most other companies, substance over form is key. Customers want to know they can rely on your standards of quality and that you will still be in business next week, next month, next year. |
ABOUT MWW Group
MWW Group is one of the nation's top ten public relations agencies and is known for its results-driven approach to public relations and "Aim High. Deliver" commitment to client service. For four years in a row, MWW Group was honored with the #1 ranking in the Holmes Report agency client satisfaction survey. MWW Group achieved top rankings in the categories of account leadership, strength of account team, creativity, strategy and planning, and program execution. MWW Group is part of the Interpublic Group of Companies (NYSE: IPG).
ABOUT Michael W. Kempner Michael W. Kempner is the founder, president and chief executive officer of MWW Group. A nationally recognized authority on restructuring troubled businesses, crisis management, investor relations, public affairs, business to business, and consumer marketing and corporate social responsibility, Mr. Kempner has successfully guided corporate communications programs for hundreds of companies.
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