Public Relations Prevention Better than Cure
Almost any bank may experience a public relations crisis, even if it is not linked to a savings and loan insolvency or other financial disaster.
Occurences such as mergers, with subsequent layoffs, can often turn into crises if the banks involved are not prepared - well in advance - to deal constructively with the media.
Management, particularly in larger companies, must constantly evaluate arising situations to prevent - or, at least, minimize - the potential for negative publicity.
Preventive public relations is the key to controlling outsiders' reactions to the business of banking. Before any crisis occurs, a bank should prepare for effective responses to the press.
The management committee should designate a spokesperson to deal with the media both in crises and on general issues pertaining to the company. All phone calls should be referred to this individual, who should be available on a daily basis.
This spokesperson needs to communicate effectively with journalists. Lacking a history of press relations, he or she might consider getting educated by a public relations specialist.
Role for Specialist
By consulting with a specialist, the spokesperson can develop and implement strategies suitable for specific circumstances.
Good communication and solid working relationships with the media can encourage journalists to place financial news stories in a larger context. Banks are probably well aware that a negative story - taken out of context - can easily be magnified out of proportion.
Company members can build relationships with the press by becoming available as "sources" of information, opinion, and analysis. Background luncheons or informal meetings are an effective way to introduce key spokespersons to journalists.
Lawyers should also initiate contact with writers and be available for comment on trend stories or breaking news. Activities of this type create long-term relationships with the media and are invaluable when negative situations arise.
With a public relations program in place, the reaction to business developments becomes more manageable. When the press amplifies a bank's problems, it becomes obvious that the crisis was not expected to hit the newsstand.
Preventive public relations allows the bank to anticipate negative - and potentially damaging responses - from the media situation. Waiting to react until a crisis occurs is often too late for effective damage control.
On the other hand, choosing not to react - by responding to journalists with "no comment" or "unavailable for comment" can be just as detrimental to the bank's image.
Such approaches can turn what could be a minor setback into a major crisis. Dealing with the truth is crucial to any preventive public relations program.
Honesty is an important component of a campaign's strategy. A bank that makes a mistake should deal candidly and straightforwardly with the media, assuring the press that corrective action will be taken.
A bank accused of inappropriate hiring practices, for example, might implement an aggressive new hiring policy.
When journalists call, the company should be prepared to discuss its strategy for rectifying the situation. Although reporting may discuss the incorrect practices, it can be offset by the bank's action steps.
An astute forecast may allow the company to create change before problems occur. When planning is not a possibility, a bank should tell its own version of the story to the media before some other source leaks the information.
In some cases, information leaked to the press may be inaccurate or reflect only an outside individual's narrow point of view. For example, several banks have received negative publicity when their mergers caused employees to lose their jobs.
To minimize the impact, the banks could create a program to assist departing employees in securing other jobs. Management could decide how to position the company to minimize the effects of bad press. Agreeing to work as a team can be helpful to both parties in a merger.
It may also make sense to prepare a press release that can be held until the journalists call. Or, if there is a chance of a leak, the release can be sent out immediately - an opportunity for the bank to explain the situation first.
Contacting the media proactively, rather than reactively, can make a significant difference.
It is as important not to overreact to a business problem as it is to react. Choosing an effective action or response to a given situation will help determine its effect on the bank.
Ms. Blattel is president of Blattel/-Associates Public Relations Inc., San Francisco.