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Editor’s note: This article is the first in a three-part series about communicating during a downturn.
In recent months, communication to employees and shareholders about the economy has been rampant. From stomach-dropping headlines to indecipherable discussions of stimulus packages, both public and private media have tried to calm the hysteria but have often only added fuel to that fire.
Noted futurist Faith Popcorn issued a release saying that 2009 will be a year “marked by unprecedented fear, anxiety and uncertainty. It’s the end of the world as we know it.”
The current recession isn’t the first one in history. Popcorn’s doomsday statement could have been issued several times in the 1900s. After all, a recession is a financial phenomenon that can happen at any time, anywhere and for a host of reasons.
For corporate communicators—many of whom are experiencing their first recession—the challenges can be overwhelming, both personally and professionally. But this can be (and should be) a master’s-level learning experience on financial and employee communication.
There are three phases in this communication plan: before the bad news happens, while it’s happening, and after it’s happened and becomes yesterday’s news.
The challenge to you is that no one ever really knows when the bad news will happen so you have to assume—all the time—that it could happen tomorrow.
Phase One
All businesses operate in cycles. We want the healthy economy/high rate of return/happy investors cycle to last forever. But it doesn’t.
What does happen is change. There are two types of change: the slow change of day-to-day, ongoing adjustments, and the abrupt change of upheaval.
Slow change occurs daily in businesses and organizations. It may be a change to better software or a reorganization of senior staff or new parking rules or a different casual Friday dress code.
Slow, small changes may not always be welcome, but they’re like taking a bite of food you don’t like just to please the cook. The result: You don’t suffer ill effects from taking a bite, the cook is happy and it was a one-time occurrence.
Abrupt changes, however, can shake organizations—and employees—to the core. The unexpected departure of the CEO. A new owner. A free-falling economy. Rising oil prices. Harsher regulations. A devalued currency. Bankruptcy. Abrupt changes make your heart race and cause you to go into fight or flight mode. Most often, people take the route to flight.
Carol Kinsey Goman, Ph.D., says this type of change “confronts the entire organization with the possibility that the very roles, actions and attitudes that were most responsible for past success will be insufficient, and perhaps even detrimental, in the future.”
Communicators should see these shifts—slow changes or abrupt ones—as opportunities to educate, inform and secure their audiences. If employees, investors, retirees, customers, and other audiences are attuned to the dynamics and day-to-day cycles of change, they are less likely to overreact when substantial change comes along. If these audiences are well informed about your specific business—its challenges, plans, successes and failures—then they are less likely to overreact when things go awry. If these audiences trust the company, they are less likely to leave it.
Employees are, obviously, the most immediately affected by change, but other audiences need information, too.
Retirees, whose pensions are perilously close to being raided to help right the corporate ship, are a highly emotional but also a highly politically active audience. Changes within the pension provider threaten retirees’ very lifestyle and financial future. If given information in an ongoing manner, they are better prepared for the changes they might experience and can be a powerful advocate for their former company.
Customers, many of whom have created a preference relationship with the places where they shop because it’s convenient, has good prices and a variety of products. Or they may like to shop when a certain clerk is on duty or wait for a favorite teller at the bank. When the store is suddenly closed or the bank changes ownership, those customers are adrift and wary of building a new relationship with another institution. Customers need assurance that they will always be considered a top priority.
Investors are the first to flee when things go bad. Their financial movements and prognostications affect other audiences such as suppliers and potential employees. Ongoing, in-depth communication with investors can help this audience make smarter, more accurate decisions.
Nonprofit organizations live and die by the health of the business community. When businesses die, nonprofits are unable to fulfill their missions, and communities suffer. Nonprofits also can lose their volunteer leadership during recessions, putting them in the position of losing both a high-profile leader and substantial annual donations.
Treat your retirees, customers, nonprofit partners and investors like employees—talk to them and with them so that they understand what your challenges are. And treat your employees like investors, future retirees, customers and community volunteers, for that is what they are.
Never overestimate their knowledge but never underestimate their intelligence. Too much information isn’t too much.
Part two of this series will focus on communication during layoffs, restructuring and similar upheavals. Part Three will discuss lessons to be learned from “survivor syndrome.”
Wilma Mathews, ABC, IABC Fellow, has four decades of business communication experience, with an unfortunate amount of time spent on layoffs, plant closures and other unpleasant communication challenges. She now focuses on writing and editing for those clients who think that “redundancy elimination” announcements will ease the pain for employees who are “redundant” and “eliminated.” |
