The euphemism about Too Big to Fail, the idea that some financial institutions are too consequential to succumb to market forces, that their collapse would spark an economic catastrophe and a ruinous state of unrivaled panic, is now part of our lexicon. But there is a corollary to this phenomenon, one I call Too Stubborn to Listen.
For those organizations suffering from this problem, for investment fund managers with an acute refusal to acknowledge the power of media and its mighty ability to sow fear and efface the telling of history, to these individuals I say, “Adapt or reap the whirlwind of negative publicity that may very well destroy everything you have built.”
Those words are neither excessive nor alarmist because I know, from professional experience as a public relations (PR) and investor relations (IR) adviser, that silence is not an option.
For every fund manager who believes he or she is immune from criticism, that the public's current attitude towards Wall Street, which is one of mild contempt (on a good day), will not strike these Masters of the Universe, so-called; to every financial executive who thinks intelligence alone bests the competition, to every member of the One Percent who can only calculate one set of paper (money) and lay waste to another (newspapers, trade journals and tip sheets), put these words on the record: “Media can distort your brilliance into arrogance, twist your success into a swindle and bleed your profits into massive losses.”
There is, however, another side to this issue – a good one. Channeled properly, and overseen with respect and diligence, engagement with the media can strengthen a firm's credibility, highlight its achievements, legitimize its rules and secure its deserved status for innovation. And yes, there are many easy ways to measure the efficacy of these efforts.
First, take a look, madam or sir, at what you do not see: Unanswered, unsubstantiated attacks against your company. Gone, too, are the erroneous reports about this or that topic of innuendo, conjecture, gossip and speculation. Rather, there is no more passivity in the face of these attempts (by competitors or insiders) to malign the value of a fund, the worth of specific investments or the judgment of the managers overseeing vast sums of money.
Value Investing with Effective Communications: Strategy and Tactics
The second most important effect of embracing PR or IR is access. Which is to say, creating a conversation with the very reporters who cover your industry is both a sign of respect (towards these journalists) and a symbol of intent (on your behalf, for the good of your shareholders and prospective investors). And, true to the nature of a conversation and its organic sense of pacing, in honor of the improvisational rhythm and the intellectual digressions that make speaking well an art form, a conversation is not a spin zone.
That is, a conversation is about context and the exchange of information. For example: By speaking to the media in general and individual reporters in particular, your job is not to “massage” the truth, nor is it to have a surrogate (myself included) take the flack for potentially damaging news. Indeed, no journalist of integrity will act as a stenographer for a fund, firm, business or organization.
But if that same journalist only has half the story, and if you decline to initiate a conversation with or respond to inquiries from that reporter, the subsequent article – written in good faith, and fact-checked based on available information – may be everything from benign and insignificant to malignant and uncontainable: A “meme” that invades social media, rapidly gains momentum, dominates search rankings (for the effected party) and converts an otherwise non-story into a permanent blight on a company's record.
To reiterate, the only way to convey the fullness of your work, the rationale for your decisions, the purpose of your investments and the strength of your leadership – the sole outlet for accomplishing these goals, period – is with communications. You, or the adviser seasoned in this specialized form of outreach, must tell your story – repeatedly.
Repetition influences everything, particularly within the realm of social media where a single post or tweet can inaugurate a trend that quickly becomes a worldwide phenomenon of comments, counter-statements, ad hominem responses and eventual chaos. The best way to neutralize these forces – the chief means to lower the volume of all this cyber shouting – is (surprise!) with a civil and prolonged conversation about facts, not falsehoods and inexplicable nonsense.
PR and IR are assets. Their use can enhance the value of an investment, improve the worth of a brand and restore confidence to the marketplace. With the right advisers, who have the wisdom to offer the right advice, success is real.
Patricia Baronowski-Schneider is Founder and President of Pristine Advisers, a marketing and communications professional with over 23 years experience in the financial communications and media relations industry.