No one likes bad news. You don’t like hearing it. You don’t like delivering it. Unfortunately, it’s a fact of life. Nothing ever good has come from bad news, right?
Today, most financial institutions face bad news every day. Whether it’s performance disappointments, sagging earnings, regulatory sanctions or, worse, criminal investigations, financial companies are bearing the brunt of the troubled economy. Unfortunately, rather than dealing with the issues immediately most companies go into bunker-mode or spin control. Too often boards and executive teams try to control the news by not saying anything or offering “no comment” when asked directly about the problem.
I see two problems with this tact. First, generally news gets out – especially if it’s related to poor performance, an enforcement action or improprieties of any kind. The world is filled with too many “cub reporters”. In addition to the usual local newspaper and the TV and radio stations, companies now have to worry about blogs, YouTube, Facebook, Twitter and dozens of other media sources. Chances are these new media will break a story or spread a rumor faster than you can say, “Call the attorneys.”
Secondly, if you don’t stand up and tell your story, someone else will. If they do, you have lost control of your story and whoever is reporting it might not get it right. The last thing you want on top of the bad news getting out is erroneous information filling the airwaves. That’s like pouring salt into an open wound.
Next time you’re facing bad news or a brewing PR storm, remember these simple tips:
- Tell the truth. Amazingly simple advice that is so often ignored.
- Contact key constituents first. Employees, shareholders, key clients and vendor partners deserve a call from your company before it hits the paper or Internet. They undoubtedly will be affected by this, too. Show them that they’re important to you and tell them yourself first.
- Develop a central message. This is your script from which all answers to questions reside. Make sure to avoid phrases like never, won’t or can’t. Negative imperatives like that simply are untrue. Rephrase your point in a positive way. (Example: Instead of saying, “We never could have envisioned this type of economic collapse,” try something less negative like, “The economic collapse was more significant than we had planned or envisioned.”)
- One spokesman/woman. Control your outgoing messaging. Appoint someone who can control the various avenues of communications, including internally to employees, an often forgotten but important constituency.
- Act quickly. The sooner you address the news the better. Misinformation and swirling rumors will not subside until you take control with the truth.
Remember, bad news is bad for business. But not reacting to bad news could be fatal. Limit your damage and get out in front of the news by proactively tackling it head on.