Temporary store closures, nearly zero travel demand, lockdowns throughout the country, and a seismic shift to online shopping created the perfect bankruptcy storm for retailers, restaurants, hotels and other businesses in 2020. However, a Chapter 11 filing often does not mean the end of the company; rather, it is a path forward for a struggling business.
As a company facing bankruptcy, your turnaround story is critical to your survival. Failing to communicate effectively throughout the process can cost you customers, employees, money, and ultimately, your reputation.
Communicating to your employees (the company’s most important brand ambassadors), investors/shareholders, customers, vendors and the media is as important as ever during this time. During bankruptcy proceedings, a sound communications strategy can help control the message and the flow of information to bolster your chances of emerging successfully from Chapter 11 and preserving corporate value.
Here are a few things to consider about your communications plan as you enter bankruptcy proceedings:
Craft your key messages. Be honest and stick to the facts. Don’t spin or speculate; be clear about how you plan to navigate the path forward. Explain the steps you are taking and why. Tell a compelling turnaround story to share with all your constituencies.
Anticipate possible scenarios. Will there be layoffs? What is the impact on your customer or client? How will your competitors respond? How will the media likely cover your story? By anticipating what could happen, you can better prepare your messaging and processes for handling events as they unfold.
Have a plan. Know who your spokespersons are. Consider media and presentation skills training for your key executives so they can communicate the message most effectively, confidently and consistently. Have your media list ready to go and create a timeline for communications outreach. Have a policy in place that precludes anyone from talking to the press except your designated spokespersons.
Tell your employees first. If you want to maintain their loyalty and make sure the facts are clear, tell your employees about your plans directly; they should never hear it from “the street.” By being transparent and sharing insight into the plan forward, you can stem mass departures, build their support, and provide vetted talking points for these brand ambassadors to work with when speaking with customers or vendors.
Be the first to tell your story. You need to be the one to tell your story. You don’t want some uninformed or ill-intentioned source breaking the news. And once you do share the news, make a concerted effort to provide updates, strategically and often.
Correct misinformation or risk it being perpetuated. Be vigilant about monitoring the news. Address and correct negative stories or misinformation in the press as soon as possible or risk building negative public perception. With the news media accessible online, incorrect information can live forever on the web unless you take purposeful steps to correct it. Don’t hide from the press; work WITH the media to manage bad news and highlight good news.
Evaluate all your communications portals and content. Your press releases, website, social media, emails, vendor and customer scripts, correspondence, and communiques to referral sources and other centers of influence all need to be populated with consistent and clear messaging. Create and distribute corporate communications, including core messages, press releases, FAQs, media backgrounders, or other materials that assist in the communications strategy.
Work with a communications specialist who not only understands communications best practices, but also understands how bankruptcy proceedings work and has extensive crisis communications experience.
If you are planning to file for Chapter 11 and want to discuss a strategic communications plan, contact us at nina@ninadietrich.com.