When Audacia Strategies CEO, Katy Herr, originally taped this interview with Dan Doran, CEO of Quantive, for his podcast The Deal—Unscripted, we had no idea just how relevant it would be now during the current crisis. A year later, we are living a case study in crisis communication and thought it was a good time to revisit some of the takeaways about best communications practices from that conversation.
1. Don’t Wait to Create a Strategy for Best Communications Practices
This recommendation applies as much to a wide-spread crisis situation like the Coronavirus pandemic as it does to a big company transition like a merger or acquisition. It never pays to procrastinate on creating a communications strategy.
If you find yourself without a clear strategy, you’re likely feeling the pain acutely in this moment. As far as we know, no one has invented a time machine, but there are some things you can do to develop a stop gap strategy:
- Stay calm and present as you weigh your options.
- Figure out who needs to hear from you, when.
- Develop straightforward messaging that doesn’t promise more than you can deliver.
- Make sure you have a designated team with assigned roles to streamline communications.
For more ideas, check out 5 Lessons from our Crisis Communications Playbook.
Many of our clients contact us when they’re facing one of two situations: times of crisis or times of transformation—hence our unofficial tagline: “chaos is our brand.” This makes a lot of sense, but too often what we find is that if an organization hesitates to develop best communications practices and a communications strategy early enough, things can go off the rails quickly.
At the risk of sounding too sales-y and mindful of the many hardships experienced during this time, here are a few of the benefits of using an outside communications firm:
- An outside set of eyes gives you transaction experience, critical perspective, and unbiased advice when communicating your message to the outside world.
- An outside firm is in a good position to place your organization in a broader context (i.e., the competitive set, the market, and your financial stakeholders), while you focus on running day-to-day internal operations.
- An outside firm isn’t influenced by the “groupthink” or silo-ed communications that can be an obstacle to projecting the strongest public image.
Whether or not your organization ultimately decides to enlist the help of a firm like Audacia Strategies during this crisis or the next one, the most important thing you can do is start strategizing ASAP.
2. Think About Who Your Stakeholders Are
In this moment of uncertainty, you are right to worry about accidentally leaving stakeholders off of your list of communications. One of the first rules of communications is to control the narrative. But if you hesitate to reach out to stakeholders or skimp on the stakeholder analysis, this is precisely the risk you take.
Remember that at its core communications is about storytelling. What is the best story you can tell to a particular set of stakeholders? Suppose the governor in your state has decided your industry is among those allowed to reopen, but you disagree with the reopen policy for your business. Your best bet is to be honest with your employees, customers, and investors. State your case and speak your truth.
Depending on whether you are a publicly or privately held company, stakeholders could include any or all of the following sets:
- Financial stakeholders:
- Public debt holders and ratings agencies
- Private equity companies and banks
- Investors or shareholders
- Community partners
- Contributors (for non-profit organizations)
- Business partners and service providers
- Strategic partners
- Government regulators and political community (local, state and federal)
- Media and industry influencers
3. Understand the Difference Between Marketing and Communications
This is especially important now when best communications practices may require a very light touch. If you think you can “get by” using your internal marketing department to craft crisis communications, you may want to reconsider.
Marketing and strategic communications are different tools. Whereas marketing primarily focuses on telling the story of how your product or service will help your target customers, strategic communications partners can knit together the entirety of the business story to give investors and other stakeholders a comprehensive picture. As the experts in helping clients weather chaos, we have developed best practices over many transactions, crises, and change events.
Now is the time to ask big picture questions about how your market may respond to this crisis, how resources should be optimally redirected, and how investors, customers and employees should be engaged throughout. This is a great time to consider what has changed for your customers and employees and what you can offer as we begin to feel our way through life post-lockdown.
4. M&A Tips and Tricks
As we hopefully begin to see COVID-19 infection rates peak over the next several weeks and markets start to stabilize, many predict that M&A (mergers and acquisitions) will start to pick up in certain industries. This is, of course, assuming lawmakers on Capitol Hill don’t place a moratorium on big mergers—a conversation we’ll be monitoring closely.
There are still a lot of unknowns here, but if a merger is in your future, we work with corporate development teams, in-house financial teams, lawyers, and investment bankers helping them think through the market and storytelling from an M&A perspective. At its core, M&A is about risk, the ability to manage risk, and telling the story of how the acquisition fits into your broader business strategy and culture.
For example, if you’ve been working on a deal that has been in the preparation stages for months, should you call it off or push forward to completion? One thing is for sure: for companies that have built a healthy balance sheet during the economic boom of the past ten years, declining valuations create opportunities to pursue deals that create long-term value. While we can’t help you decide whether to hold or fold, we can help you communicate your decision.
Finally, we’ll leave you with some pitfalls and opportunities to consider when it comes to best communications practices during a merger or acquisition:
- Companies that overpay: We have another blog post dedicated to this topic. Suffice it to say, if you overpay for an acquisition, it can create credibility issues with your investors, your Board of Directors, your employees…the list goes on. Negotiations can get emotional quickly but consider that the business strategy will have to support the valuation.
- Cultural fit failure: We’ve seen it happen: a small start-up firm develops an amazing technology and gets bought by a huge firm looking to prove it’s innovative and “hip.” Then, within a year, all the original start up employees are gone. Avoid this kind of cultural disconnect by having an air-tight integration strategy from the beginning. Make sure you are walking your walk, so you can deliver on what you’re promising. (Pssst! Hot tip: Audacia Strategies has a new service rolling out to help avoid just this problem. Make sure you’re signed up to be among the first to get the details!)
- Integration is key: The best M&A success stories are those where the merging leadership teams think about integration all the way along. When companies have a successful communications strategy that includes communicating the big vision well for both internal and external audiences, the proof is in the stakeholders’ response.
- Customers see opportunities: Ideally, when two companies merge, customers say “this is exactly what I needed.” Rather than seeking out two solutions, for example, the customer gets one-stop-shopping from the new hybrid. It’s your job to help communicate this feeling across your stakeholder groups.
- Employees see opportunities: And if you can also pull off a merger where employees in both companies see the transformation as good for their own careers, you’ve developed a winning communications strategy. Often employees of the smaller firm may feel anxious about being acquired. But if you can honestly demonstrate opportunities for career mobility, earnings potential, and other benefits of working for a larger company, it will go a long way toward easing transition tensions.
The above is only a sampling of the insights and best communications practices gained from Dan and Katy’s conversation. You can watch and listen to the 30-minute interview in its entirety, here.
As everyone keeps saying, this crisis is unprecedented. Still, there is something to be said for working with a team that faces down chaos and keeps walking through the fire. We are here to help you figure out your next step and keep you moving forward. If you want to talk, we’re ready to strategize about your best next steps.
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