10th anniversary: financial roundtable

Tonya Garcia held a virtual roundtable in September where she discussed with various financial experts the trends affecting the industry


Participants:
Cara O'Brien, MD, FD
Nina Devlin, partner, Brunswick Group
Jen Prosek, managing partner, CJP Communications
Kristi Rawlinson, director of corporate communications, Sun Microsystems
Paul Hartwick, SVP, director of business affairs, Chase Card Services


Tonya Garcia (PRWeek): We're in the midst of a huge Wall Street crisis. What near or long-term impact will this have on your work? How do you see this shaping or shifting your communications efforts or approach?


Kristi Rawlinson (Sun Microsystems):
With the financial markets crisis, I think communications will play an even bigger role in ensuring shareholders, customers, partners, and employees are provided with as much information about a company's progress (and prospects) as possible.


Nina Devlin (Brunswick Group):
There will certainly be a need for increased communications by companies impacted by this crisis: to their shareholders, customers, and employees. That said, the uncertainty of the current environment and the rapid pace of change is making communications incredibly challenging. PR professionals need to ensure that we are given a seat at the table during these difficult times.


Jennifer Prosek (CJP Communications):
Clearly there will be consolidation in the banking industry, and Wall Street will see sweeping changes. It's a time where leadership in the banking industry will need to be more visible and transparent, but unfortunately I think we will see many of our clients resistant to take the stage.


Paul Hartwick (Chase Card Services):
In times like these, you have to communicate often and in a credible way. For those organizations that do not have a history of that, that's a challenge. You can't "become credible." Just like a reputation, it's something you earn over time.


Cara O'Brien (FD):
Companies have been under fire for some time so this has been gathering steam in the last several months. But the heightened crisis-type environment is showing companies that it is critical to be careful, thoughtful, and very strategic with their communications efforts. I believe this will continue well into the future.


Hartwick (Chase Card Services):
I agree with Nina about the importance of having that seat at the table. Communication professionals need to exercise influence during times like these -- giving executives insights and information that they're not otherwise getting.

Garcia (PRWeek): Is there anything that communications professionals can do to help the executives they work with become more comfortable with the need for transparency and thought leadership?


Hartwick (Chase Card Services):
You have to appeal to their logic and business sense. Play out scenarios for them. Show them what others are doing right or wrong.


Rawlinson (Sun Microsystems):
I agree as well. Also, the importance of the coordination among public relations, investor relations, and employee communications will be more important than ever.

Prosek (CJP Communications): I think they know transparency is critical. When leadership is not even sure about what is unfolding next in their own organizations (and in the broader world), executives are finding it difficult to find a comfort zone.


Devlin (Brunswick Group):
Highlighting the risks of not communicating is important. Executives are wary of putting their credibility on the line when the future is uncertain and they themselves are not sure what the next day will bring. However, the risks of staying silent in terms of shareholder fears, employee attrition, and customer losses, are very real.


Rawlinson (Sun Microsystems):
There will be a need for more careful consideration as to when to dial-down CEO exposure.


O'Brien (FD):
The need for transparency used to be a tougher sell than it is in this environment - many executives instinctively understand it's needed now more than ever. But for those that still want to hide, it is the communications professional's job to remind executives that this will probably make things worse. You have to take charge of your own message so you don't just get lumped in with everyone else. And if there are clear misunderstandings about how our business is being impacted by the market slowdown you have to correct those quickly and clearly.


Hartwick (Chase Card Services):
Great point, Cara. It's important to monitor all forms of media right now -- from rumors and message boards to mainstream stories.

The internal side of things is always critical, but when difficult times hit, its importance is even more obvious. It's important for internal communicators to help their leaders talk with employees in a relevant way. Don't ignore what's going on -- put it into context for people.


Prosek (CJP Communications):
I could not agree more regarding internal communications. In uncertain times employee productivity can plummet when there is a lack of communication. The ROI for internal communication is very clear right now.

Garcia (PRWeek): The financial media has covered this situation around the clock. What does the future of business media and media relations look like?


Hartwick (Chase Card Services):
Lots of long hours ... But it also means communication professionals have to be aggressive consumers of all sources of information.


Devlin (Brunswick Group):
While the need and desire for financial news is very strong, and perhaps stronger than ever before, the fundamentals of the media landscape will not change because of this crisis. It is harder to make money in the news business and outlets are still figuring out how to capitalize on new media. In the meantime, staffs are leaner and reporters often inexperienced. This presents challenges for media relations -- in terms of getting your story heard and understood.


Prosek (CJP Communications):
On the future of business media and media relations I would say that "Sunday is the New Monday" in financial PR. All of the major stories (Bear etc.) have been weekend stories breaking on wires, TV, and digitally. By Monday morning the print media is doing analysis, not breaking news.


O'Brien (FD):
Yes, internal communications is definitely becoming a more important part of what executives should be doing every day. For instance, if a business is suffering and needs to improve, you need employees to help make that happen. Employees are reading terrible things in the paper every day, so management teams must be out in front of staff to mitigate panic, tell them how the financial crisis is or isn't impacting their business, and get employees focused on how to help drive their company forward.


Rawlinson (Sun Microsystems):
The circle is expanding and being able to monitor, manage, and create real relationships with a broader set of media will be even more important. In addition, we have begun to see the business and financial media take a bigger role in the blogging community -- which with message boards can lead to more critical comms management.


Hartwick (Chase Card Services):
I think one aspect that often gets overlooked is the need to understand who the third parties are who are speaking about your business: analysts, pundits, whomever. Communications pros need to know who those people are and have a relationship with them. Quite frankly, they might be talking about your business or industry more than you.


Devlin (Brunswick Group):
I agree with Paul. And it is too late to try to line up friends in the moment of crisis. You need to develop these relationships on an ongoing basis.


O'Brien (FD):
Agree regarding the round the clock issue being a key factor right now. The 24-7 news cycle has both helped and hurt different situations - it's a double-edged sword. And I do believe communications is forever changed because of it.


Rawlinson (Sun Microsystems):
Good point Cara. It is important for management to communicate internally regarding the opportunities that lie ahead for the company/industry. Employees can be your biggest communications resource (or hindrance) in down times, so pointing out where the opportunities are is important.


Hartwick (Chase Card Services):
Agree, Cara. I've heard people say that the best thing a leader can do is give people an honest sense of reality with a dose of hope for the future. That's the key to good internal communication any time, but even more important in times like this.


O'Brien (FD):
Totally agree about the third parties. Executives need to be courting them consistently and making sure there are supporters out there to point towards - this should be a key focus right now for all companies.

Garcia (PRWeek): Are the audiences that financial communicators are talking to expanding? Is the list of stakeholders getting longer?


Hartwick (Chase Card Services):
I think it is, at least for those doing it well. You need to think very broadly about your audiences.


Prosek (CJP Communications):
The list of stakeholders is getting longer in general for certain. I would also say that the stakeholder groups are taking on new roles and personalities. The media - for example - has changed substantially. We are seeing this play out in the reporting on the financial crisis. Reporters and bloggers are more apt to take sides or report their opinions in today's world. They are very much "me" focused. This is a very different media landscape from years ago when reporters did not express opinion and didn't even vote in elections.


Rawlinson (Sun Microsystems):
I don't know that the audiences are expanding dramatically, but the lines traditionally separating audiences is definitely blurring.


Devlin (Brunswick Group):
The list of stakeholders in financial communications extends well beyond shareholders, analysts, and the financial media. It includes government and community officials, employees, customers, non-financial media, and bloggers, etc


O'Brien (FD):
Agree on the blurring of audiences point - and that ties directly back to how communications is changing. The 24-7 cycle, the Internet, etc. are making it tougher to distinguish between audiences or keep them separate. This makes it important to have one good corporate message that starts at the top and is filtered out to various audiences - you can't really isolate messages for different audiences anymore.


Garcia (PRWeek):
You've all touched upon the impact of blogging. In what ways [is] technology being increasingly incorporated in your work?


Prosek (CJP Communications):
The impact of technology goes way beyond the blogger. When you think again about "Sunday being the new Monday" – that's because news is now breaking over people's Blackberries and iPhones minute by minute. People on planes and trains are receiving real time news. It's speeding up the need for rapid response.


Devlin (Brunswick Group):
We have found that using video/podcasts for CEOs around critical announcements is very helpful in terms of getting the message out to audiences that he/she might not be able to see face-to-face on day one. Dedicated Web sites where all constituents can find information in times of crisis/change are now standard and should be ready to go as soon as a situation goes live. We have also had clients venture into more interesting territory, for instance doing a virtual Reuters interview on Second Life.


O'Brien (FD):
Jennifer is exactly right. Blackberries have changed the world...


Garcia (PRWeek):
So there's a definite word-of-mouth impact on financial communications?


Hartwick (Chase Card Services):
Jennifer makes a great point. Many times you have to respond quickly and you have to do so in a thoughtful way that's appropriate for the medium. A press release or three-paragraph statement won't work.


Rawlinson (Sun Microsystems):
Real-time communication is critical, and there has been an overwhelming amount of interest around using the Internet as a means to more openly communicate material corporate information. That in-and-of-itself is changing the way we traditionally communicate to the investment community (and the way they expect to receive information from us).


Prosek (CJP Communications):
If you were on a train or airplane over the weekend (as I was) when the news broke, you would find that the entire group was in broad discussion about it. It's an interesting new dynamic that is related to immediate news delivery


Devlin (Brunswick Group):
Being able to address rumors head on with arbs/hedge funds [ARBS?] and immediately providing background context to the media to give credibility to public statements is very important in getting ahead of news.


Prosek (CJP Communications):
Speaking of getting ahead, I've been noticing that more institutions are announcing results ahead - to try and manage the message. I'm pretty sure Morgan Stanley did this last quarter. I think we may be seeing more of this.


Garcia (PRWeek): Which brings me to the question of regulation and disclosure. What does the future look like there?

Hartwick (Chase Card Services): For communication professionals, dealing with things in real-time is daunting because it's hard to move things that quickly. That's why it is important that communicators need to have credibility with their executive teams. You can only respond quickly when you have a reputation for having good judgment.


Devlin (Brunswick Group):
There will be more regulation. With what will most likely be continued Democratic control of Congress, we will see more regulation across the financial sector and in areas like anti-trust. While regulations like [Regulation FD] have been questioned in terms of actually achieving their stated aims, it seems highly unlikely that there will be any rollback given the environment.


Rawlinson (Sun Microsystems):
I agree, and with the vehicles and methods you can now use to disclose material information expanding, it will most likely drive the need for more regulation (in cases where companies abuse it). That being said, the SEC is becoming more open to change, allowing companies to leverage their Web sites and blogs to meet the public disclosure requirements under Regulation FD (according to new guidance approved over the summer).

Yes, and we have been pushing the envelope on this one for a few years now, and have definitely seen progress.


O'Brien (FD):
In terms of disclosure specifically, I'm not sure things will change dramatically except for probably having more ways to meet public disclosure requirements as Kristi just pointed out. In some ways, the rationale behind Reg FD actually jibes with the new speed of communications. One of the intents of Reg FD was to make sure [everyone] hears all things at once. And as we're discussing, that's clearly happening and faster than ever before.

Garcia (PRWeek): I want to pose a final question for today: Communications and business is being conducted on an increasingly global scale. Besides the Internet and the media, there are international markets, proposed international accounting standards, cross-border conduct of business, etc. Moving forward, how will this impact your work?

Devlin (Brunswick Group): Today, a crisis in let's say Germany is no longer just a crisis in Germany. This requires communicators to have relationships -- with their international management teams, communications colleagues, and global press -- to ensure that they are able to react quickly to manage the response across markets.

Prosek (CJP Communications): So many of our clients are looking to foreign markets for growth so it is critical for us to think about standards and procedures internationally, when conducting work. Everything we do in one country could impact our ability to sell, partner, hire, or successfully communicate in another. Because communications also "lives forever" (on the Internet etc) mistakes are no longer easily forgotten. In sum, communicators need to think globally about everything we do.

Rawlinson (Sun Microsystems): The importance of a truly global communications team is more important than ever, along with having international experts that understand how to communicate within newer emerging markets. Understanding the governments and influencers in these markets will be critical for communication.

Hartwick (Chase Card Services): It's important for communicators to have an understanding of how a global economy works -- and how to communicate in it. It's new to many of us, so it's important that we seek out ways to educate ourselves.

O'Brien (FD): Agree with all. The world is obviously completely interconnected and management and communications teams have to be thinking well beyond their local domain.

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