Corporate Communications in Crisis
By Professor Colin Coulson-Thomas

Modern corporations are essentially networks of relationships based upon trust. When a reputation for fair dealing and accurate reporting is compromised the consequences can be dramatic. Worldcom imploded.

Executives at Enron went to great lengths to conceal the true state of their companies’ affairs. As a consequence, customers have lost a supplier and suppliers a customer. Employees have forfeited their jobs and investors their savings. Association with misrepresentation sealed the fate of Arthur Andersen.

Are recent high profile scandals isolated instances of deception? Or is there a wider crisis in corporate communications? Looking ahead what should we look out for to predict or prevent future meltdowns?

Corporate value statements advocate openness. Professional codes of practice champion integrity. Managers are expected to have ‘communication skills’. Substantial investments have been made in communications technologies. A distinctive vision, stretching goals and clear objectives can inspire, excite and energise people. However, many companies fall short of these ideals.

Looking at what communicators actually do rather than what they say reveals a wide gulf between corporate rhetoric and commercial reality. People are drowning in irrelevant information. They are overloaded, overworked and insecure. With little time to think many do not see the wood for the trees. Some suspect that corporate communications are all smoke and mirrors.

The Centre for Competitiveness has examined the communications practices of a wide range of companies in key areas such as winning business, building relationships and managing change. Research teams compare the approaches of ‘winners’, companies that cope with changing circumstances, with ‘losers’, businesses that struggle or fail. Fundamental differences of attitudes and behaviour emerge.

Lets start with vulnerable companies and practices that should trigger alarm bells. Communications are largely top down and one-way. Communicators simply pass on whatever messages their bosses wish to communicate. They don’t question a brief or ask whether information they are handed is accurate or fair.

Losers only communicate when they feel they need to. They become preoccupied with messages they would like to put across. Recipients are just targets. Smart communicators in floundering companies pride themselves on their ability to distract, exaggerate or keep a situation under wraps. They avoid speaking to people directly and hide behind technology. Sanitised summaries are posted on corporate Intranets.

The communications of struggling companies are often bland and non-committal. They give little away. Bad news is hidden under the carpet. Slick packaging encourages passive acceptance. Communicators mouth generalisations and repeat slogans. Their work is often of a high technical standard. But the focus is upon form and style rather than relevance and impact.

Communicators in stagnant and dying companies are emotionally detached. They display little personal commitment to corporate messages. Their communications are cold, clinical and bland. Many are sophists and cynics. Communications is a game to be played. Scoring points is more important than helping others to understand.

In ailing companies corporate communications is a distinct activity undertaken by dedicated specialists. They do the CEO’s bidding, work mechanically and struggle to highlight what is different, special or unique about their employer. Not surprisingly they fail to connect with key stakeholder groups and spend much of their time rationalising failure. When they stumble few help. People who have been tricked or feel duped look the other way.

Communicators in successful businesses are more confident and have less to hide. They behave very differently. They share information, knowledge and understanding with people whose cooperation is needed to achieve corporate aspirations. They engage in two-way communication. They encourage, welcome and react to feedback.

Good communicators are not pre-occupied with themselves. They focus on the people they would like to establish, build and sustain relationships with. They try to understand, empathise with and reflect their aspirations, hopes and fears. They make direct and personal contact. They feel. They may stumble over the words, but they demonstrate they care.

Communicators in winning companies consciously build mutually beneficial relationships. They forge longer-term partnerships. They are both sensitive and flexible. They listen. They monitor reactions and are alert to changing requirements. Communications activities evolve, as changes are made to ensure greater relevance.

Effective communicators identify unmet needs, analyse communications barriers and address problems. They recognise the importance of symbols and are visibly committed. They understand they and their colleagues will be judged by what their actions and conduct. They endeavour to match words with deeds.

In companies with prospects communication is an integral element of management. It is built into work processes and the roles of managers. Communicators think for themselves. They question motivations, probe sources and assess likely implications. They take steps to ensure the veracity of corporate messages. They assume responsibility for what they communicate.

Winners explain with conviction the essence of what they are about. Their communications celebrate and sustain success. They engender allegiance and foster relationships that withstand market shocks and survive the traumas of economic downturn. People trust them and will put themselves out for them.

Investors, employees, customers, suppliers and independent directors should never take corporate communications for granted. The intelligence, standing and bravado of corporate leaders and their professional advisers are no guarantee the full story is being told. Be alert to tell tale signs of whether communication approaches and practices indicate likely failure or herald future success.

Prof. Colin Coulson-Thomas, Author of 'Transforming the Company: manage change, compete and win' (Kogan Page, 2002).

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