When it All Goes Wrong

16 January 2009

If it hasn’t already, a corporate crisis will hit your company and therefore it will hit your IR department.  Like it or not, the quality of a CEO, a CFO, a management team, an IR department, or an IR guy/girl is often judged by how well (or how poorly) a crisis situation is handled.

The financial crisis has produced many incidences of corporate crisis.  Bankruptcies, lowering expectations, missing projections, liquidity issues, or cutting staff – we’ve pretty much seen it all over the past 5 months.

While the press release that announces any bad news is important, it is the post-release interactions with investors, media, employees, partners, and other stakeholders that really count.  That post-release activity is what defines how good you are (or how good you are perceived to be).

2 Responses to “When it All Goes Wrong”

  1. Laura De Sanctis

    In the case of Maple Leaf Foods and the listeriosis tragedy, how do you feel President and Chief Executive Officer Michael McCain handled the crisis situation?  

    You mention that post-release interactions with investors, media, employees, partners and other stake holders really count.  How do you feel Maple Leaf Foods has dealt with post-release interactions?

    Can you suggest any major strategies to use in post-release activity and in what kinds of situations these strategies can be used?

  2. Anil Dilawri

    One only needs to look at the rebound in the stock price of Maple Leaf Foods to see the impact of effective crisis management.

    It is important to remember that every situtation/crisis is different. Because of the variety of impacts that at crisis can have on various stakeholders, a company needs to prioritize its post-release activities.

    In some cases, it’s communicating with the Street (formely) every two weeks, in other cases it’s producing reputation-building ads on TV that target your customers. Some companies need to focus their efforts internally with employees, and others need to focus on making sure the media gets the facts right.

    The key is that your company is prepared (and has the system) to recognize and adapt to an individual situation. This is not easy, but it is a necessity for successful companies.

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