When your company faces a crisis of any kind, from a lack of sufficient liquidity to supply chain disruptions, having the right kinds of communications with your stakeholders, including your board, investors, employees, vendors, lenders, customers, and the media, are critical to maintaining control and securing the support you need.
In the rush to fix the most pressing issues, organizations often neglect or mishandle communications, but this only compounds the problem. Taking your focus off deliberate, coordinated messaging can negatively affect your organization in many ways and likely hinder your recovery efforts. For example:
- Customers may become concerned about the organization’s viability and begin evaluating alternative suppliers to diversify their supplier base.
- Competitors will try to take advantage by stealing market share or poaching staff.
- Key team members may get frustrated or concerned and leave for a perceived better employer.
- Lenders will increase pressure on you for additional financial and operational information and then begin to wonder if their loans are at risk.
- Concerned suppliers may move to switch payment terms, demanding cash in advance or cash on delivery.
- Operations may suffer due to uncertainty with staff, lacking the right mix of raw materials and supplier distractions.
Five steps to engage stakeholders during crisis communication
Leading an organization through a crisis means changing its trajectory. This requires identifying the underlying reasons why your organization is struggling and working through those issues. It’s helpful to think of the process as a transformation story that needs to be written so everyone understands what happened and what needs to change. Follow these steps to write a positive change story.
1. Identify a communication leader.
First, designate an overall communications coordinator to manage the process. It’s best if that person is experienced — in other words, they’ve been in situations like this before and aren’t easily thrown off their game. If possible, don’t saddle executive management with the responsibility — in distressed situations, the executive team should focus on the turnaround. While their involvement will include approving the content of key messages and communicating with stakeholders, the coordination and content development should be delegated.
2. Build out a team.
Create a cross-functional communication team of senior-level staff who meet regularly to develop your communications plan and make decisions about what to communicate to whom and when. The composition of the team is important, and it can be helpful to engage external resources to round out the skill sets and expertise of your internal talent. Consider including an attorney, financial advisor, or restructuring consultant who can expand your perspective and assist in content creation.
3. Create a coordinated plan.
An effective crisis communication plan guides messaging, timing, delivery, and other factors that ensure consistency and credibility. In your plan, be sure to identify and address each key stakeholder group. When it comes to creating a coordinated plan, it’s important to stick to it and follow through, but also be ready to adapt and pivot if unforeseen circumstances arise.
4. Communicate early.
For stakeholders, the unknown is often worse than the reality of the situation; speculation fills the void in the absence of communication, while inconsistent messages fuel doubt and the rumor mill churns. In addition to needing liquidity, companies in a crisis or turnaround often need time to execute the plan — remember that prompt communications can lengthen the runway to execute your recovery strategy.
5. Keep promises and be courageous.
Assume all the facts eventually will be revealed. It’s best received directly rather than through a leak, social media, or the “rumor mill.” Benjamin Franklin got it right when he said, “Three can keep a secret, if two of them are dead.”
Still, don’t get forced into situations that you know won’t come true or commitments that can’t be kept. Credibility is your currency.
If you can’t divulge something, state that you’re unable to say at this time or that the issue hasn’t been decided yet. More often than not, the people who are invested in your organization understand that not everything can be decided immediately; they’ll prefer this message rather than be told something wishy-washy.
It’s important to spend time with your management team and promptly hold conversations with your board. Change makes most people uncomfortable; communicating a shared purpose and sense of urgency can help immensely. Outline your goals and action plan and share your vision for success. You need to get all stakeholders on the same page before you can move forward effectively.
Although sharing your organization’s struggles in times of transition or distress may feel like the last thing you want to do, force yourself. Use the recommendations above to get started down the communications path and leverage your turnaround to build a stronger organization moving forward.
