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Articles

Communicating Well in a Turbulent Economy

Christopher M. Nahil,
Nahil Communications Group


(appeared in “Network” March 2001)

By the time most so-called economic experts and fiscal forecasters had mustered the courage to admit that the nation was in recession, the first signs of recovery had begun. Even in the wake of the horrific national and human tragedy that was September 11, 2001, the stirrings of recovery were seen in renewed optimism in the manufacturing sector, relatively healthy consumer confidence and continued strength in real estate values. Sure, the stock market continues its one-step-forward-two-steps-back foxtrot, but only the most hardened bear will refuse to concede that, at worst, the market has found the bottom and begun to slowly advance. Still, it pays to examine the role of communications in times of crisis as a blueprint for better communications when the gloom fully lifts.

In the late 1990s, the strides made in worker productivity, the limitless promise of the Internet and the faith many companies and individuals placed in the spiraling stock market brought about a juggernaut of economic growth. However, the boom-boom years also encouraged a slew of bad business habits nourished by oceans of easy money. Many of these bad habits found fertile soil in the fevered minds of marketing departments awash in venture capitalists’ cash. Well, as we now know, bubbles burst, rising tides fall, bears come out of hibernation and recession and crisis follow the halcyon days. Equally true is the tendency for companies to head in one communications direction during a crisis: directly into the “cone of silence”, preferring to stay mum and hide in the hope that they can ride out the looming crisis and wait for the downturn to eventually stomp off over the horizon. This “strategy” of non-communication when confronted with a downturn in economic fortunes is almost always the wrong avenue.

Think, Plan, Focus

In the earliest part of an economic downturn, there exists a window of opportunity for an organization to reflect on its communications mission. This can only be done effectively if the corporate communications mission is inexorably linked to the top-level corporate mission, vision and goals. Communications professionals and senior executive decision-makers within an organization must take the time to ensure that the communications program supports the achievement of business goals. Make sure your positioning and messages are properly aligned to help support the company’s overall short- and long-term objectives. In times of crisis, when focus is critical and everyone is being asked to do more with less, no other measurement should be considered. If a particular communications strategy, tool or audience does not support these objectives, discard it quickly. A thorough understanding by the communications organization of the ultimate goals of the corporation allows for simplified communications plan development and more efficient use of limited financial and staff resources.

With clear goals in mind, audience selection becomes the next most-critical aspect of communication during foul economic weather. If you take nothing away from this article but this, please remember to reach out to your internal audiences first. Too often, employees, families and close business partners are left most fully in the dark about a company’s intentions during crisis. While the company’s “internals” may not be the primary purchasers of goods and services, they are most certainly your largest and most vocal group of spokespeople. It is nothing but helpful to be open with them and enlist their aid en masse to carry forward the desired corporate message.

As for the other ultimate audiences – customers, influencers, competitors, government regulators – choose the lot carefully. When being asked to do more with less, you cannot effectively communicate (i.e., maintain control of your messages) with the same mass audience that was reachable back in the days of blank-check marketing budgets. Choose champions: a tight core constituency that represents the golden heart of your audience. Arrange tiers of audiences and apply outreach efforts that are appropriate to each tier.

It’s helpful to take a similar approach to selecting media conduits. Whether it’s direct PR outreach to media or advertising buys, focus is the key. There is neither money nor staff time available to cover all outlets effectively. As with ultimate audiences, select champions again and pour all your fire into making them and their media outlet “friends of the organization.” (New SEC rules for company disclosure makes this slightly more difficult in the case of publicly listed companies, but not impossible. The requirements of disclosure are fairly easily met, but care must be used in following up public announcement or pre-disclosures. It’s still easy to make your champions feel special without tipping your hand regarding future plans.)

So Talk, Already

When the thought, planning and audience selection is complete, the best thing companies can do to help themselves through tough times is to begin to communicate at an even pace. Fight with all your strength the corporation’s tendency to choose the instinct for silence and secretiveness when things get sour. Don’t hide anything (frankly, you can’t hide anything permanently anyway), but also do not resort to the dot.com era expectation in which the simple issuance of a news release often keyed a mindless stock bump. Deliver your news in person as often as possible. Lay out your roadmap and milestones for your audiences. Then never miss an opportunity to communicate once you’ve achieved a milestone. Understand and communicate your corporate objectives. Then prove your points and deliver on your promises. Be prepared to have your assumptions and strategies challenged – everyone’s a little touchy these days, especially in the well-burned media and financial communities.

“Transparency” is a word that was once limited to the in-house conference calls among Wall Street analysts. For them it used to mean an ability to see the whys and wherefores of future corporate earnings. Today, for the rest of us, it means, “don’t BS me or there’ll be hell to pay” (see also “opacity” or “Enron”). Not everything will go according to plan during your march through the milestones, but the impact of an occasional slip will be cushioned by the goodwill generated by your earned reputation as an honest broker of information.

Get on Your Cyclical

The good news is that an honest and focused communications program can help any fundamentally solid company work through an economic downturn. It’s worth remembering that these periods are called economic cycles for a reason. The habits and discipline developed during a downturn will serve you well once the business and economic indicators start to point north again.