Page 98 - Crisis Communication Practical PR Strategies

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The New Dynamics of Financial Crisis 79
other corporate stakeholders, notably employees whose morale suffers
during job cuts and local communities where the company has a
diminished presence. Again, we witness the ripple effect of financial
crisis.

Responding to financial crisis

Step 1: avoiding opening mistakes

Financial crises, then, have a thousand different faces. This is what
makes them demanding; no two are precisely alike. But all crises share
at least one thing: they compress time and force companies to act a lot
faster than they would like. This is why the crisis management experts
cited elsewhere in this book advocate that crisis materials – statements,
press releases, fact sheets and backgrounders – be prepared in
advance.
Unfortunately, many companies commit common errors in these
critical opening rounds of a crisis. The most important of them stem
from two basic factors: the failure of key crisis functions to mesh seam-
lessly (due to management and organizational flaws), and mistakes in
spokesperson performance. As such, they compromise the most
important goals of crisis communication: clear, credible and consistent
communication.
Let’s review these mistakes now.

A house divided (1): the IR/PR disconnect
Major corporations usually divide external communication duties
between an investor relations (IR) and public relations (PR) depart-
ment, each of which typically reports within the organization through
different channels – finance and marketing, respectively. Investor and
public relations are, of course, artificial divisions in the communica-
tions function, necessitated by the fact that it is hard to find the combi-
nation of strong financial and marketing skills in one individual. It is
never an ideal arrangement, especially these days when IR executives
often manage financial media enquiries. But in normal times, with a
strict delineation of responsibilities, companies make it work.
The intensity of a crisis, however, often awakens the latent conflicts
between two independent external communications functions co-
existing under one roof. During a crisis, many new and unfamiliar
journalists contact a company. Communication is intensified. It takes
place under tight deadlines and often with adversarial undertones.