Newsletter - February 2009
Corporate Communications: Its Importance During an Economic Crisis
February 12, 2009 - Meena Rani K.
Corporate communications have evolved over years and so have their potential and objective. The primary goal remains the same – communicating information to their employees, stockholders, media and customers. Nowadays it is used as a public relations tool to project a positive corporate image, to form strong relationships with stockholders, to inform the public about new products and achievements and to handle crisis in a responsible manner. Communication is getting easier day-by-day, with web portals, blogs, emails, RSS feeds and podcasts, in addition to old-fashioned company publications and press releases becoming the order of the day.
In this scenario of so many choices for corporate communication, choosing the appropriate medium or mediums for the occasion requires a good understanding of the people and circumstances involved. This choice is very critical during a crisis situation. Handling a crisis in an organization involves elaborate planning and a good team. A team comprised of the top executives and the concerned managers is essential for managing the crisis confidently and skillfully.
Any crisis in an organization is difficult to handle – an economic crisis being the worst. The reason being, that financial worries have the ability to leave a mark on all aspects of the life of the affected person. Each person associated with the company will be anxious for information and reassurance. For the senior executives of the company, this is an acid test, as they have to control the crisis without panicking as well as inform the public, uphold the company image and gain back the lost goodwill. The media will be ready with the usual barrage of questions – how, when, why did it happen and how is it being resolved?
Lack of information leads to speculation, rumor, and misinformation, which contribute to the eroding of company image and panic among staff and stockholders. Even media is not far behind giving out false information, in the absence of timely press releases. By the time the crisis is over and all concerned get to know the details, irreparable damage will be done to the company image and reputation.
In the absence of clarification and information from the company, employees and stockholders may desert, customers may switch loyalty, media will have a field day airing false stories and government may enforce stringent rules, making it difficult for the organization. Sometimes, those who desert the company are wary of coming back and in future, the public will think twice before dealing with the organization.
During an economic crisis, the most affected are the employees and stockholders. Employees are concerned about their job safety and their perquisites. If not assured on time, it can develop into low morale, high attrition and less productivity. At the same time, with timely communication, these same employees have the potential to become the strength of the organization by standing by the company and spreading a positive message among the public.
Equally damaging can be the reaction of stockholders due to lack of reassurance through proper communication. They can sell off their stock and, if done in large numbers, can affect the future of the company.
Communication channels must be kept open with government to ensure their support to survive the crisis. Especially in the case of an economic crisis, government, in order to pacify the public and media, may impose strict laws curbing the facilities enjoyed by the organization.
Last, but not least is the media. They have the sway to topple the most powerful. Media can make the adage “pen is mightier than the sword” come true. Keeping them informed about the crisis and disaster control will send a positive signal to the public about the company's transparency and adeptness at handling difficult situations.
Anticipating the uproar and acting accordingly is the key to managing an economic crisis well. With a proper crisis management framework in place, it will be easier for an organization to respond to the media queries in a positive manner and be ready with press releases. By doing this, an organization can turn the crisis into an advantage. The public will be impressed by the way the crisis was handled and this will go a long way in overcoming future crises.
Mode of communication is just as important as the need for communication itself. To employees and stockholders, personal methods like face-to-face interaction and emails are the best. Instead of the company spokesperson reading out a statement to the media, if the CEO of the company addresses them by explaining the position, it will definitely make a better impression on all concerned.
Most organizations give least importance to communication during an economic crisis, with more efforts going into managing the crisis. They fail to appreciate that communication is an integral part of crisis management. The reason for this is rooted in the fact that many companies don't have experts managing public relations. When there is a gap in communication between the top brass and public relations department of a company, the result is poor show during a crisis.
With the economic slowdown and recession looming large over the corporate world, it is high time organizations wake up to the importance of communication and act fast to successfully handle the crisis if it strikes them.
Meena Rani is an emerging freelance writer who writes on a wide range of topics of current interest. You may contact her at kmeenarani@yahoo.com
Article Source: http://EzineArticles.com/?expert=Meena_Rani_K