SUPPORT VALUE THROUGH EFFECTIVE COMMUNICATIONS
Nathan Lane, managing director for Golley Slater PR in Birmingham, explains why structured communication is the best way forward during the insolvency process or organisational restructure.
It’s a scenario that’s happening time and time again. The phone rings and it’s a journalist from the local evening paper asking for details on the number of redundancies planned for a local business. This is the first time the PR team has heard of the issue and therefore has to call the client for more information. The call confirms the worst – there will be job losses and a buyer is being sought for the firm.
This tale is a classic example of worst practise but is too often the case when communications experts are called in to support the insolvency process. PR professionals are called in as an after thought to manage the inevitable call from the press and are left with opportunity to do more than react to media enquiries.
There is another way. Insolvency practitioners are tasked to maximise the value in the business on behalf of the creditors. They will explore a number of options from sale, as an on-going concern or assets, to restructure or refinance. Communications is a vital part of managing the value in a business from staff retention to managing suppliers or the customer base. An effective corporate communications programme will also position a business well for sale and support wider activity.
With this in mind it is important that communications be placed within the planning process rather than tagged on later.
Some simple steps can ensure that structured communications plays its part:
- Internal communications – retaining experienced staff within the company is a key part of maintaining a viable business. A structured internal communications plan should be developed with the HR team. This will include management of information flows from team briefings to intranets and the preparation of managed messages for the senior management to ensure consistency of communication.
- Managing suppliers and customers – regular and structured communication will be vital to ensure suppliers and customers don’t walk away. A clear communication of the future plans for the business and the current activity to secure that future is essential.
- Managing the press – a company in trouble is a great story for local and trade press. They will demand regular updates and revisit the story until a conclusion is reached. It may be tempting to offer no comment, but this is a missed opportunity. With any crisis communication it is important to minimise the negative and maximise the positive. The choice is clear – to manage the media relations to your advantage or let it run wild.
- Embrace the digital age – all stakeholders will start a search for information via the web. Ensure that the company’s website is seen as an efficient and cost effective way to get your message out in real time and with no editorial bias. In a crisis situation key search terms can be purchased to drive traffic to the website. Ensure that it is kept updated and a senior member of staff has responsibility for managing this process.
- Get the experts in early – most communications professionals are used to working under Non Disclosure Agreements (NDAs). The earlier they are involved in the process the more value they can add to internal and external communications.
It is important to find trusted counsel in these situations. A number of sources are available by asking your local professional services community or visiting the Public Relations Consultants Association’s website at www.prca.org.uk.
A large print company decided to consolidate its operations into areas of specialist print. This meant that two of its sites faced closure unless a buyer could be found for the operations. As a communications agency we were called in to manage the process both internally and externally.
A planning meeting was held with senior management to agree messages and timelines for communications to staff, unions and external stakeholders. The plan was implemented internally through the HR department and existing line management structures. It was made clear that a buyer would be sought and the business would be run as a going concern for an indeterminate period. Although this was unsettling for staff there was no significant increase in numbers leaving.
External audiences were engaged directly through company contacts, the corporate website and the media to ensure that all parties understood the business was a going concern, profitable and seeking a buyer. A number of briefings were held with key press to ensure that the message was clearly understood and not a ‘management smokescreen’.
The process took four months and ultimately a trade buyer was found for one of the sites. The sale resulted in a small number of redundancies in administrative functions. Unfortunately a buyer for the second site was not found and it closed with the loss of 150 jobs. Professional communications supported this process by keeping key stakeholders engaged with the business and supporting the sale process. By dealing with the media through a well briefed agency the management team was able to focus on the job in hand.