Rick leads SHIFT Communications, a performance communications firm helping clients shift paradigms, categories and company trajectories
As we sit on the brink of yet another recession, I’ve been reflecting on what it means for both my own business and our clients. One of the benefits of age is that I have already lived through four of these cycles: the early ’80s, the early ’90s, the dot-com bust and the 2008 market implosion. I have taken away individual lessons from each and common lessons from across all of them.
One such common lesson is that recessions often rip the business dynamics we take for granted right out from under us. Even though we anticipate change, the proverbial turning of the tide tends to happen a lot faster than we’ve planned for.
There are two commodities that stand out to me most as tending to become scarce. The first is a no-brainer: Capital starts to dry up from both customers and investors. Y Combinator (which is behind many a tech company’s success story) recently warned its portfolio of this, stating that chances of success in fundraising are extremely low—“even if your company is doing well.”
The second is confidence. In a downturn economy, doubt and uncertainty can overtake confidence and trust in short order. I am not just referring to the economy and spending, but rather doubt in a company specifically. When doubt sets in, it often has a snowball effect. A few pessimistic viewpoints morph into the “at-large” market perception.
Businesses and their leaders need to fiercely protect and project confidence in times like these.
Preserving Confidence During Downturns
Protecting confidence hinges on making smart business moves. But what I want to stress is that how you communicate those smart moves is every bit as important as the moves themselves. Despite many longstanding arguments to the contrary, PR and communications are intrinsically tied to business performance, and that’s even more true during a soft economy.
There are a few specific lines of messaging to focus on in a downturn. In no particular order, they are:
• Your Vision For The Company
Remind all stakeholders that you will continue to deliver on your commitments. Put together an effort to reestablish belief in your vision, your long-term plan and your sustainability as a business.
• Business Changes, Good And Bad
Agility and innovation can drive growth, especially during soft economies. Companies pivoting around market shifts have a strong story to tell that can strengthen confidence and build momentum. On the flip side, complacency and defensiveness can kill momentum, reputation and valuation. Cost-cutting initiatives often backfire. Getting out ahead of potentially negative news such as layoffs, as well as adding context and empathy to the story, can mitigate risk, managing credibility and minimizing negative public reactions.
• Your Humanity
People are still shellshocked from the pandemic, social injustices, war, natural disasters and myriad other issues that have befallen our world and dominated the headlines these past few years. Keep in mind that this is the first recession that junior members of the workforce will have encountered in their careers. We have a very fragile society and need to lead and speak with that in mind. Humanity comes across in the actions you deliver on, the tone and words you use and (for better or worse) the speed at which you respond.
Consistent and proactive communications can help carry through all three of these lines of messaging. When you prioritize that as an organization and as a business leader, it may not only serve to maintain the confidence that becomes such a scarce commodity during downturns—it may even help you gain ground on it.
Challenging The Continued Relevance Of Your Narrative
A lot has changed over the past 30 months. And while one of those things is likely not the DNA of your brand and business, it’s more than likely that the story you were telling pre-Covid is outdated, out-of-touch and potentially even offensive to some. Challenge your team to ask your stakeholders, inside and out, for their honest feedback about what you’re saying and how you’re saying it—what’s working and what’s not.
People are looking for reasons to stay loyal to or switch brands based on how closely aligned they feel with each of them. You want your story to be a catalyst for positive change, not negative. Don’t let your narrative or a quieted voice amid downturn uncertainty drive them away.
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