M&A trends 2022

Considering an M&A Deal in 2022? Keep an Eye on These Trends

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With 2021 firmly in the rearview mirror, now is a good time to explore the merger and acquisition (M&A) outlook for 2022. After an historic year, fueled by a backlog of deals from 2020, soaring global markets, plenty of access to capital, advantageous changes to tax rates, and attractive valuations, investment professionals expect a still active but cooler market in 2022.

While many of the factors that contributed to global M&A volumes topping $5 trillion for the first time remain in play, they are less pronounced. And dealmakers agree that deal volume peaked in August of 2021. This coupled with the likely rise of interest rates this year, which will increase the cost of debt, could impact valuations and slow deal volume.

Despite these potential headwinds, if you’re considering launching an M&A deal on either the buy or sell side in Q1 or Q2 of 2022, you’ll likely find a busy dealmaking environment. So let’s discuss the M&A outlook and what to watch as you prepare your materials.

Takeaways from 2021 M&A Activity

During a panel discussion at the end of last year, my fellow panelists and I discussed strategic M&A opportunities for investors and the M&A outlook for 2022. To watch the full panel discussion, click here.

As we kept an eye on deals playing out at the end of 2021, here are our biggest takeaways:

  • Private equity will continue to play a huge role: Private equity firms played a huge role in M&A deals in 2021 and will continue to do so. According to one report, private equity now accounts for 30% of M&A activity. This makes sense because with the market surge, private investors have a record amount of dry powder (capital) available.
  • Valuation/multiples have been climbing but will likely level out: Most M&A professionals believe that valuations in several sectors have reached their peak — or are borderline frothy. It’s hard to envision a scenario where valuations would be significantly higher a year from now and likewise, few see valuations dropping significantly. Experts expect valuations to settle at a sustainable level in the next few months.
  • More selective deal strategies are on the horizon: While few practitioners expect a slowdown of the M&A market, many see more selective deal strategies on the horizon. We’ll likely see megadeals playing a transformational role and smaller, tuck-in acquisitions playing an increasingly important role for small- and medium-sized companies looking to build and scale capacity quickly with less integration risk.

Key Differentiators Remain

Looking at the big picture, key differentiators remain. Whether you are on the buy side or the sell side, you and your team will want to keep the following in mind:

1. Integration matters.

If you aren’t looking past the deal to the future, then you will be at a distinct disadvantage when negotiating. On the buyside, you’ll want to be ready to share your integration plan. Show your awareness of everything from projected revenues to cultural implications to talent management. Changes to the labor market, for example, could complicate your deal. Be ready to prove that you’re aware of these details.

On the sellside, you’ll want to make integration easy to whatever extent is possible. Identify and mitigate key risks early both in the external competitive market and in the internal workings of the company. In addition to risk mitigation, look for opportunities to create value. Be prepared to talk about how you can add value and the quickest path to increased profits as you see it.

2. Keep non-financial due diligence on your radar.

The M&A outlook also reminds us that there are a lot of factors that can affect deal success and financial performance, but which are non-financial in nature. In fact, 70-90% of M&A deals fail due to non-financial aspects. 

Show your deal partners that you know where the non-financial risks and opportunities lie for your brand. Dig deep into factors such as executive reputation, employee sentiment, culture, and communication style.

Management’s credibility is also important to convey. Develop your story connecting your managers and executives to the company’s mission, vision, and values. The more you can show leadership as standing strong together, the better your prospects for closing a great deal.

3. Pay attention to middle management.

More often than not, middle management — as opposed to the C-suite — controls the narrative for employees and customers. Because managers are often more accessible and work more closely with these stakeholders, they are trusted. So, you’ll want to give middle managers the same attention you give to executives.

According to Sarah Gershman, Executive Speech Coach, CEO of Green Room Speakers, and one of Audacia’s partners, it’s important for middle managers to feel prepared to communicate appropriately throughout the deal process. “Middle managers spend most of their time interfacing with customers and doing the work,” says Sarah. “And telling the story of the merger doesn’t come naturally when you’re in the weeds. So it’s a smart idea to find an expert who can help middle management understand and empathize with their audience.”

Beyond prepared remarks, there will be questions and plenty of uncertainty. Managers are the first line of defense in helping to stabilize nerves, and they are your best line of offense in sharing enthusiasm for the next step of this transformative event. That said, the key when answering questions is to show that you understand the question. “Deep listening is a critical skill here,” says Sarah. “You want to listen not only to hear the question, but also to understand what’s behind the question and what’s at stake.”

What if someone asks a question and you don’t know the answer? According to Sarah, as long as you have demonstrated that you have really heard the question, you can feel empowered to say the magic words, “I don’t know. Let me check on that and get back to you.” Remember, it is always better to share authentic and accurate information than incorrect information or speculation.

4. Clearly articulate the narrative.

For both the buyer and seller, it is essential to be able to articulate the narrative around why this deal, why now, and why this property is best in XYZ hands. “Keep in mind,” says Sarah, “people have spoken and unspoken needs.” Unspoken needs are usually driven by emotions, like fear. To clearly articulate your narrative, you need to drill down and find the precise emotion you’re after. “If you want to inspire your audience, that’s different from motivating them or energizing them.” 

With an M&A deal, addressing the other side’s unspoken needs goes far beyond explaining your unique capabilities and differentiated IP. You must also be able to demonstrate an understanding of your company’s markets, customers, opportunities, and competitive pressures. And telling the story of your company’s value within the context of the deal is key.

The bottom line: Despite the headwinds identified, the M&A outlook for 2022 is very good.

If you’re ready to ride the M&A wave this year, you need the right partners by your side. At Audacia Strategies, we’re prepared to work with you and your team as you navigate the next big deal. Contact us to discuss your M&A strategy.

Photo credit: Modern Businesspeople Having A Video Conference In A Boardroom by Jacob Lund Photography from NounProject.com

underlying messages

More Than Words: What Underlying Messages Are You Sending?

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It’s 2021. And I, for one, cannot remember a time when our words — all of our words — carried more weight or were more carefully scrutinized. It’s no longer an overstatement to say that the Internet has the power to make or break your brand. Welcome to the communications pressure chamber where anything you say has the potential to be found and amplified.

As leaders and communicators, our job is to shape conversations. But with the speed of information dissemination, the time to strategize is before — not after — a narrative is trending online. Anticipating all the facets of how your narrative might be perceived, however, can feel like an impossible task.

It’s no wonder we are hearing from many, if not all, of our executive clients asking how they can be more aware in their communications (look for a post about humanizing communications coming soon!). So let’s talk about strategies for making sure our underlying messages are consistent with how we want to represent our brands to the world.

The Challenge

If you’re a leader worried about the underlying messages you’re sending with your content, you are likely facing one of the following challenges:

  • The fear of saying the wrong thing is paralyzing, so you put out watered-down, over-wrought messages that end up effectively saying…nothing.
  • The fear of saying the wrong thing is paralyzing, so your communications have stopped altogether. But saying nothing at all says so much more.
  • You’re ready to walk the talk and you want to communicate directly, but you fear reputational harm if you “don’t get it 100% right.”

These fears are understandable, but the answer is not to get defensive or hide behind jargon. Former President Barack Obama, speaking at the Obama Foundation summit in 2019, told his audience: 

“The cancel culture is predicated on this idea of purity; the illusion that you’re never compromised and you’re always politically ‘woke’ and all that stuff…You should get over that quickly. The world is messy, there are ambiguities. People who do really good stuff have flaws. People who you are fighting may love their kids. And share certain things with you.” 

Rather than tip-toeing around your communications, maybe it’s time to embrace the messiness and welcome conversations around what our underlying messages are saying both to those within our circles and to those on the outside looking in.

Embracing the Messiness  

Cancel culture aside, this heightened state of awareness creates challenges for leaders and communicators, but we can also choose to see these challenges as opportunities for change. 

I’m in a heightened state of awareness too. Not only am I hyper aware of the words organizations use (including Audacia Strategies!), but also I’m aware of their actions. This past summer, for instance, I received a message from an M&A consultancy announcing its recent merger and its partnership with several large universities to bring on new team members. 

I heard the surface-level message loud and clear: Growth! Scaling! Excitement! 

The problem was with the underlying message. The email included their full new leadership team — with photos. All 9 were white, male, and all appeared to be over the age of 50. And this was the message they chose to use as a recruitment tool directed at new graduates. I was stunned. It felt completely tone-deaf. 

When I opened that email so many questions flooded my mind: 

  • What does this say about the priorities of this firm? 
  • What does this say about the structures of higher education? 
  • What does this say about those completing business valuations? About opportunities to acquire, sell, or engage in M&A processes? And about the finance and banking industry more broadly?

The underlying message being sent—not only by emails like this, but by the lack of equity, inclusivity, and diversity across corporate America—to women and BIPOC is “you are not welcome here.” So what can we as leaders of the business community do to bring about change? Here are some ideas to get you thinking.

1. Take a stand as anti-racist

Now, there’s no doubt that the M&A consultancy was unaware of the underlying message their email was sending. They were firmly focused on the “Growth! Scaling! Excitement!” 

And this is precisely why it’s important for organizations to take an anti-racist stand. It’s not enough to say you’re non-racist or inclusive. The public needs to hear your personal and professional commitment to anti-racist action. Why not make this a regular focus of your content?

Too often when the national narrative gets uncomfortable, corporate leaders go silent, at least until they’ve completed their focus group testing and run it by Legal. As a leader in this moment when the country is engaged in discussions about institutional injustice, it’s essential to state your anti-racism clearly and announce the actions you’re taking to support those words. 

Communicate this in official statements, through updated company policies, and in your daily workplace interactions. Beyond these direct statements, partnering with a communications expert who specializes in diversity, equity, and inclusion can help you become more aware of the subtle non-inclusive messages you may be inadvertently sending.

2. Examine and address systemic racism in your organization.

If your response to my description of the email I received made you bristle, that’s because of systemic racism. Remember, and this is crucial, systemic racism harms all of us. Systemic racism makes members of “dominant groups” blind to their own racism and bias. Being blind to racism and bias makes us write company policies and procedures that are also biased. 

The only way to fight systemic racism is to face it head on:

  • Examine all company policies and procedures
  • Create a committee to examine and weed out or flag problem areas
  • Ask: Are paths to advancement within your organization structured to disenfranchise people of color?
  • Consider what efforts you are making to hire people of color as well as how you’re ensuring these employees thrive
  • Make visible changes to support a truly diverse, inclusive, and anti-racist culture

3. Use your power to change corporate norms.

Leaders have the power to use their resources and privilege to drive change. Perhaps the most important thing you can do is to look beyond what you mean to say and consider how others might interpret your content. Then get to work improving corporate culture.

As leaders, we are uniquely positioned to move the needle on changing social norms. We need to recognize the position we’re in and commit to taking meaningful action. There’s much to be done. There’s much you can do to infuse your company with anti-racist values and create an anti-racist culture.

In this spirit, here’s what we’re doing:

  • We’re actively examining our recruiting, partnering, and networking processes to engage a diverse network of partners.
  • We’re committed to bringing a broader set of values and bigger, more audacious, thinking to clients and to our community.
  • We’re listening, learning, trying and failing, trying and advancing, and pushing ourselves to learn more, get uncomfortable and bring more awareness to our communications and our actions.

Becoming more aware of our communications is about more than rooting out racism, though. We’ve been seeing increasing calls for companies to take a clear stand on environmental issues, for example. So another change you can consider is to make sure you have a clear set of values and that you stick by them.

Ask yourself and your team:

  • Do our messages amplify our company values?
  • What messages do the images we use in advertising send?
  • What social change movement would you like your brand to lead? What are you doing to move the needle?

All of this can feel overwhelming, which is why it’s so important to have a diverse team. Considering perspectives and voices that are different from your own will make you more aware of the underlying messages you’re sending.

I’m not suggesting that I have all the answers or that we at Audacia Strategies have it all figured out. Audacia has a long way to go. I have a long way to go. We aren’t going to get this right the first time and we will make mistakes. 

As CEO, though, I’m committed to taking action to increase true diversity and inclusivity. With this focus, the underlying messages will fall into place. We have to start, fail, learn, and improve. 

So, what are you doing?

Photo credit: Jacob Lund from the Noun Project

strategic narrative

Where Are You Going? 3 Critical Questions for Nailing Your Strategic Narrative

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Who are you? 

What have you done? 

Where are you going? 

Equal parts old perspiration and aspiration, the answers to each of these questions form the core of your firm’s strategic narrative. Having worked with several firms to define and articulate their narrative, we focus on aligning their vision and values with a narrative about taking that vision and those values into the future. 

For example, we recently worked with a firm that wants to apply their services to a different and more challenging set of problems. In other words, they are ready to expand their product and service offerings to bring additional value to their clients’ organizations. 

They knew that the strategic narrative was the place to start even before working on marketing, messaging, and communications. 

We facilitated a series of discussions with their leadership team to distill their areas of focus, figure out their core competencies, and get specific about their aspiration for the future. To ensure the strategic narrative aligned with what their customers truly wanted, we also conducted a Voice of the Customer assessment. The VOC delivered insight into customer trust, awareness, and loyalty.

What we’ve found in working with these clients is that companies are pretty clear on where they’ve been and what they’ve done. It’s where they’re going that is a challenge to articulate. In other words, the aspiration trips people up. 

So, let’s dig into the what, the why, and the how of strategic narrative, then we’ll be able to see the aspirational piece more clearly. 

What is a strategic narrative?

Before we answer this question, let’s talk about what a strategic narrative is NOT. When most marketers and leaders hear “strategic narrative,” they think, “we need a story that defines our organization’s vision and communicates our strategy.” 

They think, “we have a mission statement and a vision statement, so why can’t we just pull in language from those to create a strategic narrative?” But creating a strategic narrative is about so much more than creating the next piece of marketing collateral or writing that P.R. puff piece. 

Your strategic narrative should discuss your firm’s values and how you create value for your customers or clients. It’s the comprehensive, guiding narrative that draws a line in the sand for you. You can think of it as your organization’s North Star. 

Your strategic narrative:

  • Shows employees and leaders their roles and purpose.
  • Drives change when it’s time for a pivot or transformation.
  • Guides all of your communications in times of celebration or crisis.

You can revisit the key steps for developing your strategic narrative in this previous article.

Do we really need a strategic narrative?

Great question! 

I could answer by referring to the history of storytelling. I could tell you, for example, that stories have helped human beings figure out who to trust, establish community, and connect with each other for thousands of years. 

Or I could answer by referring to the psychology of storytelling. I could tell you, for example, that fancy cells in our brains called mirror neurons allow us to not just follow a story as it’s being told, but “live” out the action in our brains. This is why you jump along with the actor in your favorite thriller flick.

Bringing this closer to home, I could also remind you that putting thought and intention into your strategic narrative is more important now than ever before. We are all consumers. We are all clients. And we are all looking for connection. We want to align ourselves and our organizations with the people, organizations, and firms that share our values, understand our goals, and can contribute to our desired legacy. 

But beyond the benefits of connecting and captivating your customers, you need a strategic narrative to inspire employees, excite partners, and engage influencers. These are the reasons the aspirational aspect of the narrative is so critical.

How do we nail the aspirational aspect?

Creating a narrative that inspires, excites, and engages is tough, as anyone who has tried to strategize a social media campaign for “going viral” can attest. Add to that creating an aspirational strategic narrative that also aligns with your values and your value proposition and it’s clear how easy it can be to get lost in the weeds.

Nailing the aspirational aspect of a strategic narrative takes equal parts insight into your organization and reflection on how your organization is perceived. 

Insight into your organization

Your narrative—the story, the language, the tone—must be authentic and true to your organization. This is why input from leadership is key. It should also ring true to those who interact with your organization. 

Integrating the internal pulse that drives your team and the external perception you project out into the world is where the magic happens in messaging that is authentic, accurate, and persuasive. 

  • To gain internal insight, ask the following questions: What are the values we currently espouse? Do they still hold true? Do they need an update or clarification? Does the tone of our organization represent those values? Who do we want to be? How do we want to impact the world? What change do we hope to bring about in the world? Are our values clear to our employees? If answers to these questions are in any way fuzzy, take a pause and schedule a town hall meeting.
  • To gain external insight, ask the following questions: Can stakeholders identify our values based on the tone of our messaging? Are our values clear to our customers? Is it clear to our customers that our organization walks the talk? Do they view our aspirations as aligned with their needs? If answers to these questions are in any way fuzzy, consider whether a Voice of the Customer assessment makes sense.

Reflection on how your organization is perceived

Once you have taken the time to answer the above questions, it’s time to build your aspirational strategic narrative. Reflection on the insights gained through the process described here should reveal your path forward. If you find the answers misaligned with how you want to be perceived, figure out what data to track to get to the bottom of the issue and build up from there.

In addition, if your aspirational goals include expanding your services to reach a new market or solve a different set of challenges for your clients. Reflect on what those answers are telling you in light of your vision for the future.

Together, these pieces of the strategic narrative come together to deliver a narrative that is true to your organization today and a North Star for your future.

If your firm is unsure of where you’re going or how to communicate your aspirations internally or externally, a strategic narrative might be the missing link. Our team at Audacia Strategies is ready to sit down with your leadership team and find your North Star. Let’s find some time to connect!

Photo credit: https://www.canva.com/p/gettyimagespro/

strategic narrative

Stuck on Your Messaging? Start With Your Strategic Narrative

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You’ve probably heard that a brand is not a logo. A brand is also not a website. It’s not even the unique value proposition (please forgive the “marketing geek” lingo) of your primary product or service. Rather, your brand is a strategic narrative communicated through your marketing message.

Successful companies focus on figuring out their strategic narrative—that big-picture story that grounds the work they do—and then look for innovative ways to express their message. Beyond this, they weave crucial talking points throughout their internal communications so that authentic messaging becomes embedded in the culture.

In other words, successful companies see marketing as more than a department occupying office space somewhere. Marketing done right expresses the heart and soul of what makes your business unique. What this means, though, is this strategic narrative actually precedes your marketing message.

So, let’s talk about that strategic narrative, shall we?

Developing Your Strategic Narrative

If your head is spinning a bit right now, don’t panic! Your marketing department can help you develop your strategic narrative. I simply want you to consider the difference between a strategic narrative and a marketing message.

Your strategic narrative is your company’s story:

  • It has a beginning (your company’s “origin story”),
  • A middle (where we are and what we stand for now), and
  • A vision for the future (where we’re headed and how we’ll get there).

The narrative also explains what matters to the company. Your company values propel the story forward together with what’s unique about the organization and how those values support to customers, employees, and other stakeholders.

When employees and leaders understand each other, they unite around this common strategic narrative. Ideally, at every level, everyone involved should want to be a part of the story and help to write chapters through their experiences.

For example, here’s part of the strategic narrative for Audacia Strategies: we help firms take bold (and audacious!) steps to transform their businesses. And because we know that asking our clients to come up with bold communications often means stepping outside of their comfort zones, we promise to be there every step of the way. We want to be known as the team that isn’t afraid to roll up our sleeves and jump into the ring with you.

In addition, the narrative represents more than one particular version of the story. A robust corporate narrative helps employees and managers understand their roles. When changes are necessary, the narrative explains those changes. When faced with a crisis, the narrative should guide the response.

So how do you develop a strategic narrative?

Start with key questions.

You have to be able to answer these or…well, maybe this isn’t the right business for you:

  • What customer or market problem do we solve? And why?
  • What customer or market pain do we alleviate?
  • How is our solution or service better than anyone else’s at addressing #1, #2?
  • No really. Be honest. What makes you truly different from your competitors?
    • Note: If your answer here sounds at all like what your competitors say (check out their website, talk to them at events, do other kinds of reconnaissance), start again.
  • Gut check: If your ideal customer heard your message and your closest competitor’s message side-by-side could she tell the difference?
    • Note: We’ve slipped into discussing the marketing message here because that’s how you communicate your narrative. But here’s precisely where the narrative is useful. When you have a clear corporate story to tell, it is an excellent resource for developing your unique value proposition and messaging.

Bonus round: What do you stand for? Why are you in business? What motivates or drives your organization? Remember, your narrative doesn’t have to involve “motherhood and apple pie” to be significant, but it should speak to a more profound answer to why you are in business.

Exercise: What are the one or two words or simple phrases (no more than three words) that you want to define your organization? Think about what you would want happy clients to tell others about your business. Keep it simple.

Keep your audience in mind.

It’s natural when working on a marketing message to consider our target audience and ideal customer personas. But it’s easy, especially in the early stages of developing your strategic narrative, to forget about the audience and just tell your story. Even though you will want your story to be able to be shared from different perspectives, those perspectives all should speak to your primary audience, the client (AKA the hero of your narrative).  

Who is your target market? Get super clear here. Divide your audience into as many different segments as makes sense based on their unique problems, challenges, and pains. Think about brands you respect and their corporate stories. Do you deliver a lower price and greater convenience (e.g., Walmart)? Do you offer high quality and luxury (e.g., Aston-Martin)?

When you’ve figured out who you want your narrative to engage with, make your ideal client the star of the show. It doesn’t hurt to literally tell your story like a fairy tale. Seriously. Don’t spare the “Once upon a time’s” or “Happily ever after’s.” These can be left out of marketing copy.

Once you have your narrative—you need an elevator pitch.

To get into character here, imagine this scenario: you have 30 seconds in an elevator with your dream client—what do you say?

Start with a generic version of your elevator pitch, but then plan to tailor your message to different audiences (think of this like your LinkedIn Summary or a cover letter for your resume—is that even a thing anymore?).

The basics:

  • Introduce yourself (your name and title, if appropriate).
  • Introduce your business and why it’s unique.
  • Give one quick, meaningful statistic (e.g., we save our customers over 10% per year on average), bonus points for putting that key statistic in context.
  • Make an ask (offer your business card, suggest a follow-up meeting, etc.).

Make sure your elevator pitch aligns with your strategic narrative. Think of the story as inspiration or a jumping-off point. This works for online introductions as well!

Final Thoughts

Companies sometimes make the mistake of tasking the marketing and communications department with messaging before coming up with a strategic narrative. The result?—An inauthentic marketing message with a disjointed company culture.

Successful companies understand that messaging grows out of the narrative. If your organization keeps returning to this question: What’s our message? It may be time to think harder about your strategic narrative. The loveable marketing geeks at Audacia Strategies are happy to discuss the art of the corporate narrative. Are you in?

Photo credit: tsyhun / 123RF Stock Photo

Reg FD

5 Ways to Prevent Unintended Disclosure From Ruining Your Firm’s Holiday Season

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As we head into the busy holiday season, it’s a good time for your annual reminder about Reg FD (i.e., the SEC’s Fair Disclosure Act). Take it from your friends at Audacia Strategies: You don’t want an offhand comment to your niece’s boyfriend over pumpkin pie to lead to a six-month cleanup for the legal team at your firm. Read on to understand smart preventive measures you can take.

Reg FD: Potential Liabilities

fair disclosureIf you’re reading this article and you work for or with a publicly traded company, you’re probably already aware of Reg FD, but you may not be aware of all the potential liabilities that could result from violations of the rule. Here are some basic points to keep in mind:

  • Regulation FD is a fair disclosure rule, not an anti-fraud rule. This means that only conduct that is intentional or reckless can be considered a violation.
  • Both companies and individual personnel can be held responsible and be subject to SEC enforcement actions.
  • Such enforcement actions can include injunctions, fines, and obligations to disclose the violation.

For more information about Reg FD and the SEC’s enforcement of the law, check out this list of frequently asked questions. But always remember that nothing you read online, including this article, is a substitute for qualified legal counsel.

To avoid liabilities resulting from an executive or other individual acting on behalf of your firm, there are some preventive measures you can take.

1. Understand the Federal Rules and Regulations.

Simply speaking, Reg FD prohibits companies from selectively disclosing material information to analysts, institutional investors, and others without at the same time making the information widely available to the public. This rule reflects the idea that all investors should have fair and equal access to information that could influence their investment choices.

For example, when the story broke in September about the cybersecurity breach at Equifax, there was a question about whether senior executives had unfairly traded away shares in the company because of insider information. The executives have since been exonerated. A special committee found that the executives pre-cleared their trades making them without prior knowledge of the security breach announcement.

It is important for executives and all employees to be aware of Reg FD as well how it applies to your industry, your company, and their specific positions within your organization. Even if employees are required to go through HR training around SEC rules and regulations, they may not truly understand their responsibilities under the law.

Given the influx of holiday mixers this time of year bringing together a variety of stakeholders (i.e., CEOs and other executives, brokers, analysts, and investors), the risk of a violation increases. Does it make sense to ask Legal to present some do’s and don’t’s during a company-wide meeting coming up? Think of the headaches it could save going into 2018.

2. Review Current Disclosure Policies.

Now is also a good time to review your firm’s current disclosure policy and write a policy if you don’t yet have one. What is your process for disclosing information to analysts, institutional investors, other shareholders, and the public?

Evaluate that policy in light of Reg FD. Are there any gaps? Do you see any potential issues? Does this assessment suggest any obvious changes?

Once you have identified any potential issues, prepare and start following a comprehensive disclosure policy. Make sure to emphasize the severity and potential consequences of Regulation FD violations. This policy should be made internally available to senior officials, investor relations personnel, and anyone else responsible for speaking with analysts or investors.

3. Make the Written Policy Publicly Available on Your Website.

Reg FD requires that companies make material disclosures available to the public. When the SEC first enacted the law, they had a more narrow view of what qualified as “public disclosure.” However, in 2008, the SEC stated that putting information on a company website could satisfy Reg FD under certain circumstances. We encourage you or your legal team to check into whether your firm falls under these circumstances.

But regardless of whether your firm uses a website to make public material disclosures, your company’s own disclosure policies ought to appear on your website. Transparency increases credibility with investors and other stakeholders. Making your policies available demonstrates an institutional commitment to keeping all interactions on the “up-and-up.”

4. Better Safe Than Sorry.

As for what counts as “material nonpublic information,” there is some disagreement among industry experts. But our advice when it comes to the SEC is always err on the side of caution. If you are tempted to talk about potentially material company gossip during the corporate dinner party, maybe find some juicy celebrity gossip to discuss instead.

If you want to really play it safe, take a “chaperone” with you whenever speaking to an analyst. This should be someone familiar with making determinations about materiality, who can listen for any unintentional disclosures that might trigger the need to prepare a Regulation FD disclosure and serve as a witness (for example, your Investor Relations Officer). Private meetings with analysts or institutional investors are particularly risky.

5. When in Doubt, Contact Finance and Legal.

If all else fails and you or someone on your team ends up disclosing something questionable, the next best action you can take is to talk to someone in finance and legal. The law itself is complex, so it’s wise to go over all possible violations with a lawyer specializing in SEC regulations.

Still, in many cases, the fix is simply to make the information in question publicly available within 24 hours or before the next opening of the market. Where you can get into more trouble is when someone tries to cover up a leak of information and it isn’t discovered until too late. This makes it especially important to ensure that your employees know the next best action to take if they happen to slip.

Now that you know the top 5 things you can do to prevent a Reg FD crisis at your next holiday party or Friendsgiving, you are free to enjoy the season! Want to know more about Regulation FD and how to speak your investors’ language? Schedule a consultation, contact us at info@audaciastrategies.com, or call us at 202-521-7917. We love to trade secrets over a mug of peppermint tea.

Photo credit: vadmary / 123RF Stock Photo

crisis communications

Damaged Goods: Don’t Let a Crisis Turn Into a PR Nightmare. Assess the Damage First.

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Getting crisis communications right requires coordinating several moving parts. And because managing a firm through a crisis is no small feat, we thought it would be beneficial to break down the major elements in a series of blog posts. What follows are our top recommendations for dealing with “damaged goods.”

In this post, we kick off our series by discussing how to assess the damage. Next, we’ll look at controlling the damage (or at least containing it). And finally, we’ll talk about the long-term damage that comes from overpromising. Of course, during any phase of a crisis, it’s always smart to consult lawyers and PR experts as needed, who can help steer you through the chaos. Very often that external perspective provides invaluable guidance for crisis communications. Let’s dig in.

damaged goodsFirst, Follow Your Plan: Don’t shoot first and ask questions later.

Remember that assessing the damage during the crisis is the first step in crisis communications that you can’t take in advance. This means that in a perfect world, you would already have a plan in place for managing a crisis…well, okay, in a perfect world, you wouldn’t need the plan because you wouldn’t be in a crisis situation at all. But if we’re assessing the damage, we’re already in crisis mode.

At this point, you need to work your crisis management plan. The most important reason to follow your plan is that you want to avoid reacting without having the right information. Your plan should give you a roadmap to ensure that your crisis management team gets the relevant information to assess the actual damage and come up with a response that addresses its causes.

So, once you have your crisis management team, spokespeople, and holding statements at the ready, it’s time to go through the process of assessing the damage.

What does the assessment process look like?

Get to the truth (or something close to the truth)—ASAP!

Your #1 goal in the assessment phase should be getting to the bottom of the crisis as quickly as possible so that you can respond and show the public that you are in control.

PR experience and theory both suggest that a successful crisis response can be summed up by the following: be quick, be accurate, and be consistent. While proper assessment is crucial for accuracy and consistency, if you don’t take action quickly enough, accuracy and consistency won’t matter.

The ultimate goal of crisis communications is to control the narrative during a crisis. So don’t let perfection be the enemy of a speedy response. You should be ready with a statement within an hour after the crisis occurs. That said, DO NOT SPECULATE. Your response should be informed by the what you know, but don’t wait to respond until you have absolutely all of the facts in front of you. Ask the following questions:

1. What kind of damage are we dealing with?

  • Public Safety Compromise: When the crisis is about public safety, the public needs to know what to do to protect themselves. Write a press release and post on social media to get the information out quickly. Make sure to acknowledge people’s concerns and questions. And rather than arguing in public, engage in a measured and meaningful way with those who are affected.
  • Brand Reputation Damage: Figure out how much of the brand is affected by the crisis. It’s important not to over or underestimate the damage. Hearing a CEO say, “I’ll look into it” doesn’t do anything to start the process of repairing the damage. But hearing her say, “I’m deeply saddened by what occurred and I’m committed to doing whatever it takes to ensure this never happens again” can go a long way toward regaining public trust.
  • Missed Numbers: Most of the time, stakeholders and the general public will forgive honest mistakes or unanticipated dips in earnings. This is not to say they will be happy about missteps that cost money. However, what they can’t often forgive are financial mistakes that end up looking like intentional deceptions. Be transparent about the circumstances and explain policy changes or business model changes that will help to avoid future financial missteps.
  • Executive Credibility Damage: This type of damage can be the most complicated to assess and can throw the firm into chaos. It’s important to acknowledge the accusations, allow any legal processes to proceed, and identify and explain cultural changes that will result.

Have templates and holding statements ready for each type of damage that is relevant for your firm. While your company’s initial response may not have much “new” information because it’s clear that a full investigation is needed to get to the real truth, your early response will help position you as a credible source of information and give you the opportunity to begin to tell your side of the story.

2. What relationship bonus points can you cash in?

Make a list of every resource you can think of that could help you assess and control the damage. Then make it a priority to contact anyone with whom you can cash in those hard-earned relationship bonus points. Keep an eye out for these sometimes overlooked beneficial relationships:

  • Traditional media can be your friend: While you may be tempted to avoid the traditional media and control the narrative by relying exclusively on your social channels, if you have contacts in the news media, don’t hesitate to contact them. Traditional media still matters and they will cover the story. Better to be up front and accessible than appear to be dodging questions and hiding.
  • Listen to your team first: It can also be tempting to be reactive, especially when your firm’s brand and reputation are on the line. But rather than firing off a tweet storm, talk to your PR team. They’ve been monitoring the situation too and are likely ready with language that you can use immediately. Strong internal communications are key during a crisis.
  • Seek legal counsel: Having strong relationships with people who understand the relevant laws that govern your industry can be a lifesaver in crisis situations. If you have a Chief Legal Officer or General Counsel, make it a point to engage with them. If you have external counsel, start building those relationships now.
  • Consider key stakeholders: Is your firm publicly traded? Make sure that you have a message for analysts and shareholders that is consistent with your media messages. Consider proactively reaching out to key shareholders and analysts to make sure that they have the appropriate public information. Could this event lead to regulatory or legislative inquiries? Make sure that your Government Relations team is engaged.

Every business, at some point, will have to deal with a crisis. Assessing the damage and using proven principles of crisis communications will determine the difference between a response that demonstrates your firm’s credibility or further damages your brand. Ultimately, when you know what went wrong, you can start the process of repairing the damage.

If you’re deep in the throes of crisis mode now, we wish you good fortune and hope to see you on the other side. Ideally though, if you see your firm on a collision course with a crisis, schedule a consultation with our team and let’s go to work to help you lessen or avoid the damage altogether. At Audacia Strategies, we use bold moves to conquer any crisis!

This is the first in a series of posts on crisis communications. Be sure to return to check out the rest of the series.

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mid-year earnings reports

Breaking Down Mid-Year Earnings Reports—What Investors and Analysts Expect

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We have just crossed the mid-year point in the world of stocks, bonds, and financial markets. Q2 is officially in the bag! That means most firms are busily preparing and reporting their mid-year earnings reports (10-Qs), while many investors are anxiously waiting with bated breath.

Because 71% of publicly traded companies follow a calendar fiscal year (outliers include Apple and the US Federal Government (YE Sept 30), FedEx (YE May 31), and Microsoft (YE June 30)), investors and analysts look extra closely at earnings reports this time of year. And for good reason—mid-year earnings reports can be the key to assessing a company’s full year outlook.

So, let’s talk about what you should keep in mind as you check out your peers’ mid-year earnings reports and prepare your own.

Mid-year Earnings Reports and Expectations

Earnings reports have everything to do with expectations—measuring a firm’s performance against past expectations, setting expectations for a firm’s future performance, and most importantly, defining a firm’s position relative to market expectations.

The skill with which you communicate these specifics can affect analysts’ valuation of a firm, which in turn affects investor perceptions.

As Gerald Loeb (founding partner of E.F. Hutton & Co., a Wall Street trader and brokerage firm) put it so well, “stocks are bought on expectations, not facts.” This is true. But, as we also know, expectations depend on facts. So let’s look at the facts that are most relevant.

(Not) Just the Facts

What’s essential to communicating mid-year earnings reports is to paint the best possible picture, given the available facts. But what does painting the best possible picture mean in this context? It means evaluating Q1 and Q2 against the major milestones laid out in your 2016 strategic plan and making the best case, true to your numbers, for seeing continued momentum in Q3, Q4, and beyond.

At midyear, generally speaking, analysts and investors are looking at three main indicators:

1. Is the company on track to make full-year guidance?

Often at mid-year companies will have enough insight into their full year outlook to raise or lower guidance (projections for future earnings). Although companies are not required to provide guidance, it is common practice and can be a powerful tool for setting expectations. But the decision about whether to give guidance and how much is an individual one.

Factors to consider when it comes to guidance:

  • Primary Liability: Several provisions in the federal securities laws can create liability for forward-looking statements. For example, Section 11 and 12 of the Securities Act of 1933 impose liability on issuers, their officers and directors, and underwriters for misstatements or omissions of material facts. Because of the potential legal issues here, it’s important for those giving guidance to speak carefully, completely, and deliberately.
  • Safe Harbors: The Private Securities Litigation Reform Act (PSLRA) of 1995 enacted safe harbor provisions for forward-looking statements that are identified as such and accompanied by “meaningful cautionary statements” that could cause actual earnings to differ from guidance. However, PSLRA safe harbor provisions do not apply to IPOs or enforcement proceedings brought by the SEC.
  • Regulation FD: The prohibition on selective disclosure of material nonpublic information should also be taken into account in any discussion about whether to provide or update guidance. Guiding analysts about future earnings is permissible under Regulation FD, as long as the general public is informed at the same time.

This article from a Harvard Law School forum offers a more detailed overview of what public companies should know about giving guidance. Keep in mind, though, that there’s no substitute for consulting the pros when it comes to navigating the choppy waters of when to provide guidance and when to raise or lower these expectations.

2. What progress has the firm made against strategic initiatives?

If you are presenting mid-year earnings reports during a call with investors, it’s always a good idea to start with an overview of past strategic initiatives and whatever progress you have made toward your goals, e.g., entering a new market, cost takeout, R&D, integration of a recent acquisition, etc.

In going over the details of your progress, be as specific and transparent as possible. Analysts and investors like to hear specific examples backing-up statistical claims. So if you claim, for instance, that revenues for a certain sector grew 6% in Q2, be sure to talk about what exactly impacted earnings. Did a new licensing deal pan out? Was a particular marketing approach successful? Did you hire a fresh, young whiz kid who is setting the world on fire?

Point out opportunities for capitalizing on the momentum you’re building and places where it would be prudent to pull back temporarily or long-term. Be candid about any milestones or strategic initiatives that were less than successful too. As a favorite former boss used to say, “Don’t take it on the chin.” Rather, put the challenges in context and talk about what you’re doing to correct course or why you expect industry trends to shift. Not every initiative works. Real talk from your executives can go a long way in building trust over time.

Don’t forget to include non-financial achievements here as well. If you landed any new business deals, signed any new clients, launched a new R&D initiative, made progress on building your management team or on other recruitment efforts, this is all relevant information for assessing your firm’s progress. Remember to drive your points home by reiterating your key takeaways at the end of this section.

3. Is this company’s narrative consistent with what we know about the industry and the company’s strategy?

Industry commentary is one of the most complicated pieces of any mid-year earnings report. Any inconsistency between your comments about industry trends, e.g., predictions about shortages and surpluses of raw materials, and your peer companies’ comments are instant red flags for analysts and investors.

Outlier comments will be pressed during Q&A. This could be a good thing, if used strategically. Taking a novel view of your market or industry could indicate a key differentiator in market approach, which could be indicative of future earnings outperforming guidance (investors are always looking to capture alpha!). So, it literally pays to be prepared.

However, if your commentary goes against conventional wisdom or contradicts previously discussed strategic goals (i.e., your investment case), it will get more questions and be met with skepticism—guaranteed. When you know you are saying something that analysts and investors will find surprising, make sure you can succinctly lay out your case. Companies that can carve out a unique perspective (aligned to overall strategy) and back it up with data and performance, will generally see the the market appreciate those moves.

All the above barely scratches the surface and there is a lot more that could be said about each of these indicators. But, of course, the most valuable recommendations for preparing mid-year earnings reports are those specific to your firm’s needs and your industry’s trends.

So, if your investor relations strategy is in need of a touch-up, the experts at Audacia would love to help you paint the best possible picture. Contact us today to set up a consultation.

Photo Credit: Dmitriy Shironosov

 

authentic leadership

Authentic Leadership: Save the “Game Face” for the Squash Court

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One of the best-kept secrets in the corporate communications world is that you can’t teach great leadership—not really. But you can coach leaders to be more authentic and authentic leadership is one of the hallmarks of being great.

Part of the reason you can’t teach leaders to be great, is that there is a big difference between communicating and “messaging.” Yes, I can help a new CEO walk her company through a complicated reorg with beautifully timed and carefully worded messages. But it’s not all about the message.  

It’s the way you deliver the message that makes the difference between communicating and “messaging.” And delivery falls into the category of authentic leadership. So, let’s get real.

Authenticity: The Magic

Authentic. Authenticity. Such an important part of communicating and it pains me to see it recently hijacked to become one of the most overused “woo woo” terms. It’s right up there next to “organic” (and no, I’m not talking about the organic tomato variety).  

What does authentic even mean? Quick. Take 15 seconds to think about what it looks, sounds, and feels like when you engage in an “authentic” conversation. Step outside of the corporate context for a moment. Maybe you see yourself chatting casually with friends; watching a captivating TV or political or entertainment personality; reading a really inspiring OpEd; or listening to someone tell an important story. What makes that discussion—regardless of the venue or channel—feel “authentic?”

Off the top of my head (no thesaurus.com today!)—when I think of authentic leadership, I think: Real. Genuine. Not fake. True. Natural. Honest. Direct. Candid. Connected.

Authenticity: Unlocking the Magic

That feeling that we just identified? The “realness” that makes you sit up and engage? That’s the magic in true communication—the kind that builds relationships, awareness, and interest. It can’t be created or manufactured, but it can be uncovered, enabled, and encouraged.

If authentic leadership is what we’re after, let’s discuss how to encourage and enable real, engaging conversations in the boardroom, on earnings calls, and even in blog posts.

1. Who is your executive, really? Unlocking authenticity requires a bit of soul searching and a lot of honesty. What is your executive’s style? Introverted? Extroverted? Detail-oriented? Big-picture? Funny? Sarcastic? Dry? Often the tone of the organization takes on a bit of the personality of its key spokesperson or executive. (See: Apple and Steve Jobs).

Rather than asking your executive what tone she prefers, do a bit of homework here. As you observe your executive interacting with investors in meetings, pay close attention to her tone of voice and watch how she engages with the discussion. Often, smaller-group discussions and meetings provide keen insight into how an executive prefers to interact.

2. Encourage your executive to be “real.” You’ve done the research and you have a good sense for how your executives prefer to engage. Now take that style and use it to your advantage. Often we feel like we have to put on our “game face.” While getting psyched for an event is great, putting up a facade or a false persona isn’t.We can all tell when someone is faking it, right? (See: Founder and former Lululemon Chair, Chip Wilson’s infamous apology).

Got a detail-oriented executive? Make sure that your quarterly earnings call script reflects her passion for the details of your firm’s technology or business model. Got a wisecracking executive? Embrace it and give her a few opportunities to release some (appropriate!) humor in their public engagements. Which leads us to…

3. Know your bumpers. One plea for caution here: Keeping it real doesn’t mean anything goes. You will want to give guidance on where the boundaries are. Discuss how many details are too many. Offer concrete examples as a guide to using humor effectively. Consider what challenging questions might come up and where the law requires a more matter-of-fact approach.

This is where professional media training can be really helpful. I strongly recommend that ANYONE who communicates externally (or heck, even internally) goes through media training and has the experience of presenting—both formally and informally—on-camera. Then sit down together to watch the replay and debrief. This is critical to understanding how our communications “quirks” and nervous habits can interrupt the connection with our audience and interfere with communication.

4. Give as good as you get. Keep in mind that communicating is a two-way street. It’s just as important to listen as it is to speak. And, it sounds simple because it is. Everyone wants to be heard. I remember watching in horror during a meeting with one of our largest investors when my CEO couldn’t stop “messaging” and just listen to the investor’s feedback. No amount of redirection could help. We lost that large investor within the month.

We can’t simply be in “outbound” mode all the time. We have to receive information to learn. You know those executives who have an innate pulse of their organization? And those who build teams that will follow them to the end of the earth? It doesn’t happen by accident. These authentic leaders demonstrate respect through listening and meaningful engagement.

So, if you want to help your executives give as good as they get, encourage active listening, i.e., fully concentrating and engaging. You’ll be amazed at how much this can help. The Center for Creative Leadership provides some excellent tips for building these skills in executives too.

5. Be consistent. It’s tempting for all of us to fall into the trap of “putting on our game face” for a big meeting, presentation, or conversation. However, if our “game face” is not consistent with our personality and the characteristics discussed above, it can come across as confusingly inconsistent at best and downright untrustworthy at worst.

Again, your observations of your executive come into play here. If you notice that your executive has certain triggers where she tends to put up walls or get a little defensive, point it out and train her to anticipate those triggers. Authentic leadership is as much about knowing yourself as it is about listening and reading others.

Authenticity: Back to Basics

We all interact with people in corporate jobs who put up walls (and I don’t mean along the border) and treat their work interactions as completely foreign from their non-work interactions. Let this post be a little reminder to get back to the core of all communications: connecting, engaging, and building relationships.

At its foundation, authentic leadership is all about finding subtle ways to be ourselves within the boundaries of our industries. Not sure what that looks like for your c-suite? Contact Audacia and we’ll help you figure how to keep it real!

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communications strategy

100 Days: Time to Take a Hard Look at Your Communications Strategy

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There is always a lot of discussion in the media and around office water coolers about the first 100 days of a president’s term. What’s been accomplished? What’s on deck? Truly, a lot can be accomplished in 100 days whether you are starting a new job, launching a new campaign, building a business, or leading the free world.

The president is the CEO of the nation, so it makes sense to evaluate the leadership landscape at this point. While it’s unrealistic to think that the first 100 days hold the key to an executive’s tenure…it certainly sets the tone.

For any executive, the 100-day mark is a good opportunity to come up for air and assess how focused tactics are addressing your broader communications strategy. It’s also a good time to (re)address how you talk about your strategy publicly.

As you look back on the first 100 days of 2017, consider where your organization is headed, what is working, and where you might need a course adjustment.

The Big Picture

It’s important in business (and in life) to take a step back to think about the big picture from time to time. Understandably, a long term communications strategy can get lost dealing with the day-to-day challenges and adjusting tactics to fulfill immediate expectations. So, be sure to remind yourself to take a step back, re-evaluate, assess metrics, and relaunch.

When it comes to your larger communications strategy, considering these big picture items will help you manage expectations both with your team and your stakeholders. Consider how you talk about your goals, expectations, and the steps to success. If you feel out of your depth, it may make sense to find a corporate communications partner to walk you through this process.

Recognize When it’s Time to Pull Up

Recently, I met with the executives of a newly launched business. The experience was a great reminder of the importance of keeping the big picture on the radar. We spent the first 30 minutes of the meeting discussing business challenges; how they were addressing those challenges; and how to grow revenue while maintaining—or growing—profit margins.

It was a good tactical conversation. But it wasn’t why I had been invited there. This company was concerned that they were under-valued compared to their peer set. And while all of the tactics to improve operations and financial results were absolutely critical components to addressing the valuation challenge, the team’s strategic goal had gotten lost in their tactical focus.

It was time to pull up. I took them through a process designed to help them assess progress to date; revisit their broader challenge; and address market changes, competitive shifts, and investor perception.

Now was also the right time to take a look at how they had communicated their strategy to investors. Did they know what we were working toward and why? Had we shared critical milestones, success metrics, and off-ramps?

In the first days, months, and even years figuring out what business model to follow and what broad communications strategy will propel an organization forward most effectively is difficult. Sometimes you are so focused on growth and getting the right systems in place that communications takes a backseat.

But having a communications strategy in place, even one that is not perfect, will help you avoid headaches down the road. Suppose you know that you will need to ease back on production during the Q3 or Q4 next year. It will be a lot easier to explain a slow quarter next year if you keep investors in the loop as to your broader strategy starting now.

Keep in mind that strategy shouldn’t be a secret. Secrets = surprises. And surprises are interpreted as risk by investors.

So, as we look back at the last 100 days of 2017. Ask yourself and your team some difficult questions:

1. Have you clearly and publicly articulated your strategy and goals? If the answer is “hmmm… maybe not,” chances are good that your team’s hard work on all those tactical concerns will go unnoticed or unappreciated or unvalued. Or, what’s even worse, the hard work will be viewed as “noise” without an anchor to a broader goal.

2. Have you shared the key success metrics that accompany your strategy? Remember that you have some control over your own evaluation. If there are metrics or milestones that you have accomplished, but which are likely to be overlooked by external analysts, highlight them yourself.

3. How about some of the key tactics that you’ll employ to achieve those goals? Once you have articulated your goals, strategies, and key metrics, anchor the tactics in those goals. Point to, for example, cost reductions, research and development, implementation of new inventory tracking software, etc.

4. How does your broader strategy fit the operating environment? As you execute the tactics of your strategy, your market, and your competitors, your business also changes. Take a moment to pick your head up to assess your operating environment. The strategy you chose to govern the organization when you first launched may not hold up today.

5. What is your strategy to communicate progress against your plan? A steady drumbeat of updates (small and large) lets investors know that you’re chipping away at your strategy. So designate someone to play the role of chief communications officer who will decide when and how to communicate with investors.

Developing a communications strategy can be quite a challenge, especially for new businesses. Our experts have helped teams like yours take a step back, find the right strategy, and execute the plan. Let’s talk about how how we can help you!

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holding statement

Controlling a Crisis is Hard. The Right Holding Statement Can Help.

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When an incident or crisis occurs, the public has a right to know what happened and what steps are being taken to resolve the issue. Keep in mind, though, that there are better and worse ways to communicate during a crisis. Too often companies make the mistake of throwing together a holding statement only to further damage their credibility.

With everyone’s first instinct being to shoot video with their smartphones and immediately post to social media, the need to respond quickly during a crisis is apparent. For this reason alone, it’s important to have a crisis management plan in place that you can immediately activate in the event that something goes wrong.

The Holding Statement: Critical to Maintaining Credibility

One crucial, but often overlooked piece of any sound crisis management plan is the holding statement. Having this short statement on hand helps you avoid the dreaded “no comment” statement, which the public perceives as a disavowal of responsibility.

It also prevents the media from writing speculative stories about the organization and the situation. While you may not have the ability to control the crisis, you do have the ability to control the narrative. In other words, a skillfully written holding statement maintains credibility in the face of a crisis.

Crisis Communications is a Delicate Business

During a crisis, communications can have one of two effects: the statements released can mitigate the damage or make a bad situation worse. So, what can your organization do to ensure that your communications calm the storm instead of churning up more trouble?

1. Create Pre-Crisis Holding Statements

What holds true on the basketball court, holds true for crisis management—there is nothing worse than being caught flat-footed. Just as champions on the court run drills to prepare their defense for game day, champions in crisis management run drills to prepare their responses for an emergency.

But before you can prepare those responses, you need to have a good crisis management plan in place. Start by anticipating possible risks and vulnerabilities; then put together holding statements for each one. Remember to think broadly about the types of crises that might impact your company. This could be anything from safety issues to natural or manmade disasters to social media frenzies.

The good news here is that if you take the time to identify potential crises and think through the right statements ahead of time, while heads are cool, you set yourself up for saving your credibility should the worst happen.

2. Consider Distribution

Holding statements can be issued via traditional distribution methods, such as press conferences, but given the current pace of communications and multiplicity of channels, including social media, having multiple distribution methods makes sense.

This means that you actually need several variations of each holding statement you create. Create channel-appropriate statements for each of the following: traditional media distribution, social media video messaging, talking points for key spokespersons, social media posts, customer messages, website updates, and whatever other channels make sense for your organization.

3. Strike the Right Tone

Tone is very important. In the event of a crisis, you will want your holding statement to acknowledge that your company recognizes the need to cooperate with media and to inform the public without sounding authoritative.

If your communications team isn’t careful, the desire to show that you are in control of the situation can come off as arrogance or indifference to the injury that others are experiencing.

Holding Statement Keys: Simple, Informative, Timely

Once you have thought through your crisis strategy with an eye toward maintaining your credibility, keep a few more details in mind as you prepare your actual holding statements.

Keep It Simple: No speculation.

The holding statement is a confirmation of known facts, expression of awareness, and—depending on the situation—expression of appropriate and authentic empathy. Organizations are most often judged on the authenticity of their response in times of crisis.

A cold, legalese message during an emergency (particularly one with physical, financial, or environmental harms) can be a turn off and result in questions about credibility and brand promise.

Informative: Stick to the facts—Who, What, Where, When, How, Now What?

Talk about the actions your organization is taking and the priorities you will address. As with all communications, make sure that your holding statement aligns with key corporate values (e.g., prescription drug safety is our number one priority). Do NOT address rumors, speculation, or unconfirmed reports.

Make sure that key spokespeople are identified and that all inquires are routed through these people. If you skip this step, contradictory statements could end up adding to the chaos, which is the last thing you need. Collaborate with your legal team ahead of time (ideally as part of your crisis response planning), to have agreed upon language and an approval process in place.

Timely: As in, within an hour.

The initial response should be released within an hour of the occurrence of the issue or incident and should state, at a minimum, when the next update is anticipated. You can’t afford to let the rumor mill get ahead of your official statements, so make sure a clear chain of command is in place.

Time is your biggest enemy when it comes to dealing with a crisis. To be ready to spring into action, update your plan and role play scenarios with relevant team members at least twice each year.

At Audacia Strategies, we understand that dealing with a crisis is stressful. That’s why we have systems in place to guide you through. Let our team do what we do best so that you can get back to what you do best. Schedule your consultation and let’s get started.

Do you have your holding statements together?
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