Lessons from Wall Street

Sifting through the news on Wall Street this month, there are plenty of “if only” scenarios to explore. We’ll stick to what we know: communicating effectively. As The Wall Street Journal (subscription required) points out, corporate boards often have weak or nonexistent crisis communications plans. Here’s a clip from the article:

“This month's meltdown of several financial giants exposed a serious flaw in corporate governance: Many U.S. boards don't cope well with a crisis. But some directors are now ratcheting up efforts to anticipate, and avert, trouble. Too many boards are stocked with poorly prepared directors, who fail to ask enough tough questions or adequately scrutinize management, governance specialists say.”

Communicating effectively in a crisis usually means more than talking to reporters. Whether an organization is large or small, it often means communicating with management, board members, employees, customers, reporters, and if applicable, shareholders, regulators, and elected officials, to name a few. This is no easy task, but the more effectively we communicate with each stakeholder the more likely we are to eliminate confusion and weather the storm.

We are big believers in having a communications plan in place before a crisis. A good plan generally identifies an organization’s stakeholders, who will communicate with them, and what means they will use to communicate. It will also identify who is responsible for developing the message. Some companies even stage a "live fire" mock crisis that puts its plan and management team to the test. At the end of the exercise, management can identify what aspects of the plan worked, what didn’t, and how to improve it.

If you have additional questions about how to develop a crisis communications plan, give us a call or send us an e-mail.