The new reality for RIAs is that every day feels like a crisis. As markets swing wildly and moods shift from glee to gloom and back again, clients are scared – you might even say terrified – and their fear is infectious. How do you position yourself well in the face of so much chaos? Bullish or bearish, how do you walk the tightrope?
You need to choose your words carefully, and most of you do. But sometimes, mistakes are made. Sometimes the wrong thing is said, or done. Even innocent, explainable errors can quickly turn into PR monsters of nightmarish proportions. So how do you gauge your particular “crisis,” and what can you do about it when it rears its gruesome head?
Most of you who go before the media are practicing PR in times of crisis. It is important to make the distinction between this and “Crisis PR.”
Depending on one’s perspective and personal experiences, crisis can have many meanings. I spent some time in the U.S. Navy, where crisis meant our aircraft carrier had run over an F-18 that had been improperly launched from the flight deck. The pilot was fine, but wet and a half-inch shorter on getting back to the ship (I’m speaking literally – pilots get only three ejections in their career, max, due to spinal compression). He may have used strong language when referring to the situation. Recently I’ve experienced what I would define as a family crisis that makes a lot of what I worry and stress about on a daily basis seem ridiculous. So I try to keep all of this in perspective when considering whether something is truly worthy of the “crisis” label.
The fact is that is that all crises are relative. If you are getting spit-fire roasted by a journalist who seems to despise you, you’ve got yourself one sort of crisis. If you contributed money to Occupy Wall Street following Goldman’s withdrawal only to find yourself speaking for your B-D against their wishes – and Goldman managed your B-D’s IPO, then that’s a crisis of a different color – particularly if the reporter loved your quote about how the protesters are “just as inarticulate as my clients,” and it was highlighted it in the headline.
To respond or not to respond?
My definition of a crisis is anything that, once out for public viewing, could cause any sort of damage to your business. So what’s the right way to approach a crisis? First, assess the damage. It is easy to panic, to overreact and assume the sky is falling but often things aren’t as bad as you think. More often than not, particularly if you are misquoted or quoted out of context, or it just comes off horribly, the resulting storm will blow over quickly. The current news cycle, in which we are unceasingly inundated with newsfeeds day and night, works to your advantage. Twenty-four hour news means that no sooner do most news items see daylight than they are buried under an avalanche of other news. Chances are, if it is a single quote in a story, it will not garner much attention unless you work to promote it with clients and prospects using social media, putting it on your website, e-mailing it, etc.
If you or your firm are the story, however, you have several options. If the story in question relates to a legal issue, consult with your attorney, but the best course of action is most likely to keep your comments out of the media. Opposing lawyers will almost always find a way to spin your words to their advantage. Fight it out in court, not the press.
Don’t try this at home
If, however, we’re not talking about a legal issue but just a negative piece of press coverage, you might attempt to speak to the reporter, using a combination of candor and sound arguments to explain your side of the story. This is risky, as you may indeed say additional wrong things and come off looking worse. Do not attempt a response without professional PR representation.
But take the case of Schwab’s reaction to a blunder it made this summer – contacting clients without properly communicating to advisors. See: Schwab’s rapid response to letter snafu seems to be smoothing ruffled feathers. What did Schwab’s RIA chief, Bernie Clark, do? Bury his head in the sand? Hide out? No, he addressed the issue head-on and admitted a mistake was made. Very smart move.
How to deal with a potential PR crisis
1. Assess the damage Have you been receiving worried comments from your staff, friends and family about the negative piece of coverage? Is this something that if widely read will cause damage to your business? Or is it frustrating, perhaps embarrassing, but not something that will negatively affect your company? Get a PR consultant to do a free analysis if you are not sure.
2. Decide if you can, or should, respond If it is a legal issue, consult your lawyer. But in general it’s probably best to refrain from comment to the media. If there’s misquote, how harmful is the mistake? Is it worth doing battle over? Is the offending coverage just embarrassing, or a real potential threat to your business? A reporter seems to hate you – is it real, or perceived?
3. Accentuate the positive, eliminate the negative Being aggressive with reporters or publications is counterproductive. Focus on what you are doing that is good and interesting. Get the attention of journalists who will talk to you about those things. Focus on getting the message right next time out and amplify the resulting good coverage with social media, your website and e-mail to create a positive online footprint.
Now that I’ve scared the daylights out of you – feel better
Here’s the good news: Even gale-force PR disasters are survivable. Whatever your current crisis, be happy you are not UBS or Netflix. There’s a book waiting to be written on the Netflix’s PR missteps, yet the firm’s chief executive, Reed Hastings, is still in there pitching. “You have to keep trying, you can’t be afraid to make mistakes. Every entrepreneur is about creating change,” he is reported as saying in a Mashable.com article last week. Even Hastings has not given up, and this man has endured one of the worst runaway PR and marketing debacles I’ve ever seen.
As we say to all of our clients, if you choose to do PR, there will be some bumps and bruises along the way. But if you follow a process-driven approach and prepare properly, putting out positive news regularly and contributing meaningfully to the discussion, good things will happen. No one is out to get you – even if it sometimes feels that way. When you choose to publicize yourself, you do need to be careful.
But in the long run, if you are doing some good and have something valuable to talk about with the outside world, PR isn’t scary at all.
Jason Lahita is the Managing Partner at FiComm Partners, LLC, a specialist communications firm that works with advisers and advisory oriented B2B firms to raise their profile, put forth their messages and market their hard-fought credibility. www.ficommpartners.com