Monday, January 1

Managing Bad News

Happy New Year!

Last week, I offered to provide some basics in managing bad news when faced with a situation like Jobster as part of a living case study in communication. (Spoiler: If you're looking for dirt, I am sorry to disappoint. You can find plenty of nastiness on Jobster's own blog.)

Perhaps James E. Lukaszewski, APR, of The Lukaszewski Group (one of the most quoted crisis communication management consultants and prolific authors in the field), said it best during his speech to the Canadian Investor Relations Institute in 2001: In the era of instant communication, people will likely bet against you when trouble comes. "Your ability to understand and communicate with confidence in real time with constituents will be the key to winning the perception struggle that crisis always creates," he said.

He is spot on of course. With the exception of crime, malfeasance, or environmental catastrophe, most crisis communication situations are all about perception, and this seems to be the area where Jobster has struggled the most.

You see, downsizing, unfortunately, is part of business when companies are not performing as expected. There is nothing wrong with it, other than the unfortunate impact it has on people. Most people understand this and most CEOs lament the decision, which means companies are generally judged solely on management's handling of layoffs. This is also why I suspect Jason Goldberg's decision to blog about upcoming changes before clearly communicating all the details to employees (just prior to the holidays) was met with such widespread criticism.

Why? First and foremost, he didn't seem to understand he was in a crisis communication situation. Usually, crisis communication situations are identified by one of the following: a dramatic drop in stock prices, a member of management is indicted, outside activists attack the company, acquisitions/mergers/takeovers, anti-corporate government action, and the one that is hardest to identify but best applies here — founded and unfounded rumor.

It doesn't make a difference whether a rumor is founded or unfounded, both can have equal impact on a company's reputation and it is up to a CEO to manage them, with or without the advice of communication specialists (not necessarily public relations practitioners). If they do not, they run the risk of demonstrating that they are not leaders, but simply managers. The difference is that managers generally run an organization by the numbers (try to make the forecast or exceed it at all costs) whereas leaders lead through inspiration, motivation, strategic vision, and people management.

When faced with bad news or a crisis, assuming management recognizes it as such, the best leaders will always consider the following (a sliver from my playbook) once the founded or unfounded rumor surfaces:

• Talk about it as soon as possible.
• Tell the whole truth, even if it means bad news, negligence, or wrongdoing.
• Be clear and concise, addressing details without obscuring the situation.
• Offer full disclosure of all relevant facts, history, and related information.
• Demonstrate empathy or remorse as appropriate to the situation.

By all counts, it seems to me that Jobster did none of these things. They did not seem to consider that, in today's world, communication has an impact on ALL company publics very quickly (employees, shareholders, media members, customers, etc.) and each of these publics will react to information differently. They did not seem to consider most people have gut reactions before listening to the facts and background or waiting for post-holiday explanations. They did not seem to consider that all information, no matter how contained it seems, will eventually be released by someone. And they did not seem to consider that the media, people like the Seattle Times, will frequently turn to additional sources for opinions and comments when management avoids an issue, which could further erode the reputation of the company.

Suffice to say, even if Jobster finds a way to keep every employee (I hope they do, and am sorry if they don't), how the rumor and supporting evidence was managed will still have a negative impact on the company, especially on employee relations. Sure, they don't teach most of this in many MBA programs, but the most experienced leaders in today's business world learn it anyway, either the easy way from "handlers" as they are called by Goldberg, or the hard way.

Given that reputation damage most often occurs from the inside out, I sincerely hope others learn from this living case study. History does not have to repeat, even though it almost always does. Companies are fragile things. Treat them wisely.

In conclusion, I would like to mention that there has been much criticism over whether people should be discussing Jobster at all. Sorry, but I have to disagree. Jobster executives and team leaders have to appreciate that no one but no one gets to choose what others find newsworthy or interesting. On the contrary, you invited bloggers and members of the media to take an interest in the company from day one. You cannot "uninvite" them.

That, in essence, is what public relations (just one aspect of strategic communication) is all about. It's about managing communication, perception, and reputation in good times and in bad. Never should a company expect one without the other. That would be silly.

5 comments:

Amitai Givertz on 1/1/07, 3:31 PM said...

Great blog, Rich, and an excellent post. Very good.

Shannon on 1/1/07, 3:49 PM said...

Your last 2 posts on this subject summed up perfectly my thinking on this situation. I wish I was so eloquent. Great post!

Rich on 1/1/07, 5:08 PM said...

Thank you both very much, many times over.

Your respective blogs are great reads, certainly part of my decision to take up the topic (along with Cook). Thank you for that, and for introducing me to recruiting.com

I guess all that's left to be said will be in the coming days from Jobster. I remain interested, especially because one has to wonder if their own chronic searching might have driven the search numbers up on Technorati and other search sites, drawing even more attention to their crisis.

Hmmm... now there is a topic most communicators, myself included, have rarely considered. Happy New Year to you both.

Rich on 1/2/07, 5:18 PM said...

Famous Last Words:

"anonymous blogs. love them? hate them? many blogs don't allow anonymous comments at all." — Jason Goldberg's most pressing question as John Cook
reports that the employees at Jobster will learn their fates tomorrow.

Rich on 1/22/07, 1:24 PM said...

Remember when I said that if you are not careful with communication, you might make The New York TImes for all the wrong reasons?

Well, Jason Goldberg made The New York Times and it was for the wrong reason.

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