Page 105 - Crisis Communication Practical PR Strategies

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8 86 Crisis Communication
5. Periodic audit of financial audiences

Periodically, companies should conduct a formal communication audit
of their shareholders and analysts. These surveys should review areas
where the corporate strategy may be misunderstood, aim to reveal
how communication could be improved and seek to discover new and
preferred ways to reach out to these groups.

Conclusion

Financial crises have assumed new and wider dimensions that repre-
sent serious challenges for public companies. In the age of the internet
and the globalization of financial markets, financial crises are rarely
confined to narrow borders as in other types of crises. When a public
company based in Amsterdam faces a local food tampering issue, for
example, the stock valuation suffers and investors around the world sit
up and take notice. Because of the internet and the growing power of
blogs, declining financial performance is often circulated to and noted
by non-financial audiences as well. Companies often find themselves
fighting a war on two fronts. Financial markets today are also far less
complacent than in the past. Institutional investors, as we have seen,
face unprecedented performance pressures, and are increasingly
intolerant of sustained mediocre performance. In this case, they can
be active agents of change and precipitators of crises – financial and
otherwise.
How does a company respond to these trends? Obviously, strong,
sustained performance is the best antidote. But few companies are so
fortunate, and even then no one is immune to crisis. Communication
remains an important piece of the puzzle. It has to happen long before
a crisis hits. If financial audiences clearly understand a company’s
strategic focus, and if it is presented to them in a way that is persuasive,
they may show patience while the elements of that strategy fall into
place. If management speak regularly with investors and analysts; if
they are open to the financial media; if they habitually prepare
investors for disappointment; if they treat them with candour; then
each of these groups may give management a short-lived opportunity
to make their case before reacting in panicked selling.
The opening moves of any crisis are always critical. This is especially
true on the financial side, where shareholders are nervously watching
their investment lose value. Opinions form quickly. There is no ques-
tion that management can make a bad situation worse if they stumble
early – send mixed messages about what is going on, or seem unre-