The Vital Need to Consider All Stakeholders in COVID-19 Communication 

April 6, 2020

For many years now, experienced CCOs and agency counselors have appreciated that issuing segmented and conflicting messages to different stakeholders doesn’t work anymore. Fueled by the transparency of social media, what you say to employees had better be consistent with what you say to Wall Street and your customers, and vice versa. Everyone sees everything.

The COVID-19 crisis is guaranteed to provide us with countless examples of companies forgetting this lesson. Companies are under unprecedented pressure to protect the liquidity, viability and survival of their organization. Like the escalating health crisis numbers, the communication coming out of companies is like nothing we’ve ever seen.

Companies are offering public assurances to investors (cash flow, cost-cutting) to reassure them that their investment is safe. Some companies are making commitments to employees (no layoffs) to reassure them their jobs are secure. Many are making commitments to customers (supply lines will remain open) to keep them from looking elsewhere. Many more, thankfully, are making extraordinary efforts to help their communities.

One issue with these pronouncements is that they probably need to be issued with an expiration date. No one knows how long this will last, so this week’s commitment may be next month’s broken promise.

But an equally dangerous dynamic that requires sensitivity and consideration is the likely conflict between a message meant to reassure one stakeholder that has the opposite effect on another stakeholder. Bold announcements about cost-cutting to protect the balance sheet might help you with investors but terrify your employees. Commitments to employees might unnerve investors. Well-intentioned commitments to customers to keep your business running may be greeted with resentment among employees who feel they are being sacrificed to make sure the company continues to make a lot of money. Similarly, commitments to remain open might strike some in the community as putting commerce over safety.

Yet another area of potential conflict is sending mixed messages to the same stakeholder group. Smart companies are sending genuinely heartfelt messages to employees about how much they care about them. However, the juxtaposition could be painful if that is followed by layoffs.

There are no easy solutions to resolve these conflicts, but neither should there be any excuse to communicate in the coming weeks without at least candidly discussing the potential impact of an announcement on all stakeholders. Attempts to reconcile the interests of all stakeholders in any announcement should be made. Timing and juxtaposition of announcements should be considered.

A few questions to ask:

  1. How will this communication aimed at stakeholder W be perceived by stakeholders X, Y and  Z?
  2. Should we directly address the potential concerns of other stakeholders in this message?
  3. Is there a way to explain why a decision that may look to be against the interests of a stakeholder group may be in their interest in the longer-term?

On the last point, one example is that laying off or furloughing employees now is obviously against their short-term interest, but maintaining the relative financial strength of a company so that it can rehire people in the future is in their longer-term interest. Expressing this tough reality with empathy, compassion, even regret, is better than not attempting to explain it at all.

Alignment and sensitivity to all stakeholders may not be possible in some cases, but every effort should be made for the sake of the stakeholders and your company’s reputation.

Rob Flaherty is Chairman of Ketchum, the global communications consultancy with 130 offices and affiliates worldwide. He is on the board of the Arthur W. Page Society, the Institute for Public Relations and the advisory board of Room to Read, which focuses on literacy and girls education in developing nations. Follow Rob on Twitter at @flahertyrob.