In order to gain a greater understanding of corporate actions, most American companies agree they need to more effectively communicate today’s economic realities and, in that context, their response. To an increasing degree, foreign companies need to do the same in their home markets, as well as in the non-domestic markets where they do business. Unfortunately, due to a poor understanding of globalization and the fear and anxiety caused by the Great Recession, communicating the right corporate messages is more difficult than ever.

Why Communication Is Key

Over the past decade, the pace of technological, financial, economic and political change has continued to accelerate. This has caused much tension. In addition, the financial, economic and emotional pain incurred by the Great Recession has added considerably more angst to an already very stressed public. Combine this with the fact that few policymakers, reporters and members of the general public in the U.S. and abroad are familiar with today’s economic realities, and it’s easy to understand why the hunt for corporate scapegoats will continue.

As a result, corporations must better explain the economic forces at work and their corporate actions in this context. Importantly, to retain credibility, they also must proactively craft messages that honestly explain the short-term downside of their actions, if any, in the context of the greater upside. If not, more companies could become the target of those looking for an enemy. And as we all know, free market capitalism—which has raised the living standards of the world’s poor and generated tremendous social wealth—has repeatedly come under attack. If this is any indication of what’s ahead, we can expect more anger to be directed at American companies.

How To Frame Issues

To truly achieve understanding, it is important to frame or position an issue in a context the target audience can easily grasp. For example, when discussing a particular effect of the recession, it is important to explain it in terms we all value (i.e., our homes and family, career opportunities, wage potential and quality of life). Attempting to discuss issues solely in economic, theoretical or non-emotional terms is likely to result in a lack of understanding or limited engagement on the part of the target audience.

Just as important, it is essential to keep the message simple. To do so narrowly focuses on the goal. Yet, when complex issues are discussed, or responses to questions are provided to the media, policymakers, employees or investors, the communicator often attempts to convey too much information—creating confusion and new objections. In the end, the audience may not have the background, possess the necessary level of detail, or connect all the dots. And even if the audience is fully up to speed, they may only retain 20 percent of what is expressed. Consequently, it’s important to stay “on message” and prioritize your answers with the most concise and compelling data available.

And remember, credibility is key! Manage expectations and do not oversell what is realistically anticipated to occur based on a corporate decision or response to the recession.

How To Get the Best Coverage

When dealing with the media, it is imperative to understand two key things: there are fewer reporters working at major news outlets, and those who remain are bombarded with an overwhelming amount of information daily. So what makes the media select some stories over others? Simply put, reporters like unique, interesting and especially controversial stories that relate to their readers’ lives. Unfortunately, all too often the media is quick to decide that any announcement or action regarding a company’s global business decision in response to the recession is bad news for the public. As a result, when communicating your company’s sensitive decisions, be sure to let reporters know exactly how they will impact your employees and local community.

To ensure the best possible coverage of your company and its position, it is imperative to establish a relationship with the media before any potentially negative information is released. Make sure you are familiar with reporters covering your industry so you can gain their confidence by knowing their news beat. Then try providing them with stories and positive information about your company and business. This will pay dividends in the event of a crisis because the reporter will understand your business and have familiarity with your operations.

Put Your Answers in Context

Since the beginning of the recession, the media, policymakers, employees and investors have asked and will continue to ask about the recession’s impact on your company, how you have adapted and how you will continue to adapt. Answers provided by business executives, as well as those in corporate communications departments, likely will continue to result in more, and even sometimes hostile questions. Why? Those communicating the answers often do not put them in the appropriate context or do not have a sound understanding of today’s economic issues. As such, the answers usually create new objections, are muddled, complex or confusing, or sometimes appear to be purposefully evasive. This quickly creates an atmosphere of distrust. The result: negative publicity that in some cases has destroyed businesses.

Understand the Economic and Global Forces at Work

In order to effectively respond to sensitive issues that could affect the interests of a company or organization, it is essential to have an adequate understanding of the subject, its leverage points, emotional hot buttons, likely objections and talking points to successfully overcome those objections. But to do this, it’s essential to understand today’s economic realities, the impact on your company, and what you plan to do about it. In the end, manage the issue before it manages you.

This article appeared in Impact Analysis, March-April 2010.

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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