Credit Crunch Crisis Communications
– Beating the bad news bear
Rob Briggs
Chairman and Regional Director
IABC Europe and Middle East
Agenda
• IABC Europe and Middle East
– regional and international member benefits
• Cracking the crunch
– where did it all go wrong?
• Beating the bad news bear
– communicating through the crisis
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International Association of Business
Communicators (IABC)
• Approx. 16,000 members in 70 countries worldwide
• Professional networking association
• Offers professional development opportunities and
global contacts
• Allows you to gain fresh ideas and insights
• Leadership development opportunities
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IABC Europe and Middle East Region
• Approx. 700 members
• 9 Chapters:
– Belgium , France, Ireland, Netherlands, Russia, Scandinavia, Slovenia,
Switzerland, United Kingdom, 250+ Members at Large
• EME Board:
– Represents Region to International Board
– Provides leadership development opportunities
– Provides regional professional development opportunities
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IABC offers…
• Networking opportunities
• Learning and development resources
• Job-searching assistance
• Professional status and recognition
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Networking opportunities –
Face to Face
• Local chapter meetings
• Contacts with communicators
both internationally and in your
community
• Opportunity to share specific
local information (e.g., about
freelancers, suppliers, clients…)
(Above, left to right) Rob Briggs, Chairman ,
IABC Europe and Middle East Region;
Aleksander Salkic, Consultant to the Mng
Board Chairman, Petrol at IABC’s European
Leadership Institute, June 2007, Ljubljana
(Right) Rok Klancnik, Manager,
Communications, Slovenian Tourist Board,
Belgium at IABC’s European Leadership
Institute, June 2007, Ljubljana
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Networking opportunities –
The IABC eXchange
•
Expand your network or share ideas, opinions and best practices online
•
Create your personalized profile
•
•
Develop your own blog
Form private work groups and post documents
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Marketing opportunities –
The IABC Marketplace
•
An exclusive service connecting consultants with prospective customers
•
Searchable database of IABC member consultants of all types
•
•
Create a profile that highlights your expertise
Find the right communication expert for your project
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Job searching assistance
•
•
On the IABC web site
•
Jobs added every day
Communication jobs from entry level to senior
•
•
From all over the world
Customized search capability
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Professional stature
• Respected professional accreditation
(Accredited Business Communicator qualification)
•
Global awards recognising excellence in communication (Gold Quill)
•
Demonstrates commitment to your profession
•
•
Grants credibility to the profession
(Over 16,000 members worldwide)
Puts you in the position to give something back to your profession and your colleagues
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Who belongs to IABC?
People in…
•
PR
•
Community relations
•
Corporate communications
•
Writing and editing
•
Public affairs
•
Training
•
Investor relations
•
Video and graphic production
•
Marketing communications, advertising
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Cracking the crunch
- Where did it all go wrong?
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How the crisis began
•Re-marriage of retail and investment banks
•Light touch regulation and short term
incentives
•Unregulated US mortgage market
•Creating money from thin air – CDOs
(collaterised debt obligations)
•Cutting the CDOs with prime quality debt
•Re-packaging and re-selling
•Borrowing from wholesale money markets
(big chunks of money)
How the crisis began
•US mortgages start to default
•Banks unable to quantify debt
•Wholesale credit markets seize up
•Banks unwilling to lend to each other
•Nasty game of pass the parcel
•Big operations dependant on debt for day to
day running
•Bear Sterns the first to go
How the crisis began
•Merrill Lynch, Citigroup, Wachovia, Fannie
Mae and Freddie Mac, Lehman Brothers,
HBOS, Northern Rock, RBS – all heavily
exposed to toxic debt
•Banks asked to pull both ways – shore up
capital reserves and start lending again
•With no trust between banks, LIBOR
(London Interbank Offered Rate) spread
above base rate is very costly
•Retail banks unable to access wholesale
money on reasonable terms
•Lending to both businesses and personal
customers dries up
The credit crunch explained
Banks
Lend
Less
Economy
Slows
Property
Prices
Fall
Mark-to-Market
Reduced Value
of Assets
Increased
Unemployment
Increased
Defaults
Vicious Spiral  Cuts in interest rates don’t work!
The credit crunch explained
Capital Injections
Banks
Lend
Less
Economy
Slows
Property
Prices
Fall
Mark-to-Market
Reduced Value
of Assets
Bad Bank?
Tax Cuts
Increased
Unemployment
Increased
Defaults
Vicious Spiral  Cuts in interest rates don’t work!
Tricky Balancing Act
• The fall in property prices is causing a contraction in
credit (i.e. lower velocity of money)
• Central Banks are finally filling the hole created by the
credit crunch with printed money
• But if prices stabilise, velocity might bottom and broad
money explode
• Bottom line: Central Banks have got a tricky balancing
act
How the executives reacted
•Denial – Dick Fuld, Lehman Brothers
•Unshakeable self belief in the face of adversity
•Lack of contrition
•Executives isolated and out of touch (in general)
•Motor company executives on Capitol Hill
•‘Hands up who out of you flew here commercial?’
•Some forced out; some fell on their swords
•Some got massive payoffs and pensions
•Heads I win, tails you lose
Beating the bad news bear
- Communicating through the crisis
The role of the communicator
Use and review existing channels
• What’s currently in use?
– Staff magazine?
– Email culture?
– Team meetings?
• What are the minimum table stakes?
• What are the common factors?
• Who do you trust?
• Where do you get your information from?
Engage with the business
• Design the journey
–
–
–
–
–
Agree need, value and options
Identify key stakeholders
Articulate approach
Align with existing strategies and activities
Obtain executive sponsorship
• Business outcomes
– Identify the business benefits
• Definitions and metrics
– Shared vision
– Clear approach to measurement
– Gap analysis
Keep the story straight
Your Story
Thought-Leading Messages
Key Commitments
Key Commitment A
Key Commitment B
Key Commitment C
Audience Segmented Messages
Audience
Key Message
Supporting
Messages
Supporting Proof
Points
Tone
Political Engagement
• Power
– Who has the influence to get the job
done?
– How do you influence the people that
influence them?
– The goodwill reservoir
• Perspective
– How do you perceive the end result?
– How do they perceive the end result?
– Outcome = Resources x Time x Money
• Personality
– Likes / dislikes
– Communication style
Finding common ground
• Power
– Do we know what drives the
stakeholder regardless of the
agenda?
– Have we identified and
articulated the common
ground between our
constituency and the
stakeholder?
– Have we identified genuine
mutual benefit or is our case
one sided?
Excerpt from ‘Power, Perspective, Personality’ pamphlet,
copyright 2008 The Company Agency
Where’s the vision?
• Perspective
– Are we saying something the
stakeholder won’t know?
– Are we saying something new that is
interesting, topical and fact based?
– Are we telling any specific ‘sticky’
stories to illustrate our perspective?
– Are we saying anything the stakeholder
will find valuable currency to remember
and use?
– Are we taking the opportunity to open
up a wide and longer term relationship?
Excerpt from ‘Power, Perspective, Personality’ pamphlet, copyright 2008 The Company Agency
People buy people
• Personality
– Have we prepared the business leader
to not merely be an authoritative but a
passionate advocate?
– Is there a danger of over-familiarity or
assumed friendliness?
– Have the sherpas done their long-term,
multilateral relationship building to
ensure that the personal encounter
takes place in the correct climate?
– Have we prepared the business leader
for open dialogue?
Excerpt from ‘Power, Perspective, Personality’ pamphlet, copyright 2008 The Company Agency
Selling communication counsel
to the CEO
Banks: Market Capitalisation
255
Market Value as of January
20th
2009, $Bn
Market Value as of Q2 2007, $Bn
120
91
80
76
93
67
75
49
4.6
7.4
RBS
Barclays
10.3
Deutsche
Bank
16
Morgan
Stanley
17
19
26
26
27
Credit
Agricole
Citigroup
Societe
Generale
Unicredit
Credit
Suisse
215
165
108
100
116
116
68
32.5
35
35
BNP Paribas
Goldman Sachs
UBS
43
RBC
64
85
97
Santander
JP Morgan
HSBC
Source: Bloomberg, Jan 20th 2009
These sizes are not directly scalable.
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Authority..
This document has been carefully prepared based on information that is believed to be accurate at the time of writing and unl ess stated specifically otherwise, is intended for general information only. It is not intended as taxation, legal, investment, banking
or other professional advice. This document does not constitute an invitation to buy or the solicitation of an offer to sell securities in any jurisdiction to any person to whom it is unlawful to make such a solicitation in such jurisdiction.
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What can a communicator do?
• Regularly updated fact sheet
• Stress market fundamentals
(regulatory system, political stability)
• Stress business fundamentals and financial strength
• RBC – 10th safest bank in the world (Global Finance)
• Canada – world’s soundest banking system (World
Economic Forum)
What can a communicator do?
• Co-ordinate internal and external communications
• Use to face-to-face where possible
• Leaders should be visible
• Don’t cut goodwill (no taxis, no biscuits, no travel)
• Invest in strategic communication
• Keep close to your clients and your stakeholders
Further information
Website: http://europe.iabc.com
Contacts
Rob Briggs
Chairman and Regional Director
IABC Europe and Middle East
Email: robertgray70@hotmail.com
Phone: +44 7771 961 055
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