The news media is not the only group with whom you need to communicate. You also need to keep employees and investors informed and in the loop. And, perhaps the most important thing to remember is that employees and investors should always be informed of decisions and announcements prior to the news media whenever possible. Nothing destroys a company’s credibility more quickly than when employees or investors, or even customers, learn about company news from an outside source.

Although many of the same concepts utilized when working with the media apply when communicating with employees and investors, such as being honest and sincere, creating strong relationships, demonstrating mutual respect, understanding the other’s point of view and time constraints, and not being afraid to admit you do not know something, there are some differences that exist.

One difference is the way in which you communicate the message and the vehicle you use to share information. While the media primarily depends on interviews, employees and investors usually expect written forms of communication, and on a more frequent basis. For employees, this means you can use your company’s internal publication/employee newsletter, intranet or internal email system, employee paychecks or even special home mailings to communicate information and company policies. In the case of investors, who may often be the last to believe that change is necessary, quarterly earnings statements, annual reports and specialized mailings may be used. Just remember that whatever you publish may find its way into the media’s hands.

Additional ways to communicate with your employees and investors include through specially designed videos, town meetings with a question and answer format and open forums. But no matter which way you choose to communicate, the most important things to do are keep employees and investors informed, be fully honest to combat the creation of rumors, do not make promises you cannot keep and do your best to outline the positives that will result from your company’s decisions. Your audiences may be skeptical or hostile, so it is imperative you remain poised and create an atmosphere of cooperation with a sincere intent to be helpful.

In general, your employees and investors are crucial audiences and you must communicate with them just as vigorously as you do with the media, if not more so. Employees and investors who respect management, take pride in the company’s products or services, and believe they are being treated with dignity and respect are imperative to a company’s success.

An Example of the Effects of New Global Realities and Poor Communication

A company well known for its high quality products provides an example that demonstrates the changing face of globalization and the importance of good media and employee communications.

The company in question, referred to here as Company X, dominated its industry for decades. Early in the 20th century, it had factories in New York State, England and Australia. Toward the end of the century, even though it controlled a major share of the North American market, competitors in the Pacific Rim and Europe were growing stronger. To maintain its marketshare, Company X was forced to match its competitors’ pricing. But by the 1980s, it could no longer sustain this strategy.

Company X’s manufacturing process, which even today does not lend itself to high levels of automation, faced competition from Pacific Rim producers performing assembly in the Philippines and Europeans assembling in Turkey. As a result, the company could not improve productivity enough to erase the wage gap. In an op-ed, Company X’s CEO said the firm had a choice: sell out to off-shore interests or move lower-skilled jobs to Mexico. He chose to locate lower-skilled work in Texas and perform assembly in Mexico. He believed this would reduce manufacturing costs and retain well-paid skilled jobs in New York State.

In turn, the manufacturer built world class plants in Texas and Mexico. Consequently, several hundred good jobs were created in a depressed region of Texas, while approximately 1,500 new jobs shifted to desperately poor workers in Mexico—jobs which provided excellent working conditions and paid well above the average Mexican wage. Very important to the company chairman, the manufacturer saved about 1,000 well paying jobs in New York, his home state.

By establishing a plant in Mexico, the firm saved good jobs in the United States that likely would have been lost to Asia. However, according to Bill McKibben, a communications consultant and former communications counsel to the manufacturer, many of the company’s New York workers did not see it that way. As a result, morale fell and productivity plunged. Had Company X’s workforce accepted the global realities and difficult choices the firm faced, employee rumors may not have become accepted as fact and bad press may have been minimized, McKibben says. When retained by Company X, McKibben was advised not to waste time with the local media. The company’s management believed the local media would not fairly represent the manufacturer’s efforts. However, after meeting with the media, McKibben was able to put the global realities in context. Thereafter, he continued to keep the media informed and on a factual course. Nevertheless, damage, which played a part in the closing of the New York plant a decade later, had been done.

The manufacturer eventually regained its competitive position and was sold to a larger U.S. firm. Today, the company’s headquarters is no longer in New York, and it maintains various facilities both in the United States and around the world. The manufacturer continues to dominate its product category in North America.

This story involved a company scrambling to adapt to its changing business environment while trying to keep good jobs in New York State. Unfortunately, its intentions were not effectively communicated to the media or employees, and this factor played a large role in the eventual closing of its New York factory.

McKibben’s Four Media Rules

Bill McKibben offers the following four simple—but not easy to follow—rules to successful public relations:

Do the right thing

Consider more than profit and personal gain. Long term corporate health is based on a happy workforce. In turn, happy employees will make your customers happy, and that combination will make your investors happy.

When you are forced to make tough decisions, be proactive

Consult all involved and see if they have a way to lessen the downside. Be sure everyone knows the choices. Let everyone affected—employees, investors, the community and your customers—know what is being considered and your ultimate or final decision.

Make the media your partner

Connect with them early on. Tell them everything as soon as those closest to the issues are on board. Candor and openness will be rewarded. If there are factors that will help the media understand an issue but would be better not published, ask if you can go off the record. If you establish an atmosphere of trust, you can work with the media and they will work with you.

If something bad happens, communicate it immediately

This is always the hardest part of dealing with the media. If you attempt to hide anything or hold back, the media will speculate and rumor will become accepted as fact. Instead of a day or week of bad press, the media will keep probing while the bad press continues on and on. The classic case is the 1982 Tylenol poisoning tragedy. Faced with seven deaths, Johnson & Johnson never hesitated. The company halted sales and recalled the product. It initiated an internal investigation that indicated the poison could not have been added in its facilities. Johnson & Johnson offered a reward for the capture of the perpetrator and came to the aid of grieving families of the victims. By quickly aligning itself with the victims, Johnson & Johnson also was seen as a victim. Its response to this crime was successful and the company soon regained lost marketshare.

This section appeared in Part II: Tips and Strategies for Communicating Responses of the book Grasping Globalization: Its Impact and Your Corporate Response, 2005.

John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.

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