Off message: When PR goes gonzo
If a communications team is faced with the challenge of spinning the closure of a business line, it can get weird.
The late, great American gonzo journalist Hunter S Thompson once said: “When the going gets weird, the weird turn pro.”
To my knowledge Thompson never did any investment bank PR work but his quote is eminently applicable to a phenomenon we’re seeing more and more of these days – the closing of desks and product areas.
At the risk of being too honest, the shuttering of a business presents a real challenge to PR people – one that I’m embarrassed to say can take them into the disingenuous zone.
To appreciate how weird things can get, let’s take a look at a hypothetical, but reality-based, example.
It’s a quiet Wednesday afternoon when you get a call from the head of capital markets asking you to see him right away. The trading floor has been full of gossip of the closing of the left-handed asset-backed business so you figure this is going to confirm the rumours.
On your way to his office, you hope that it’s either a one-to-one meeting, or if anyone else is there, they’re from the business rather than investor relations or human resources. You’ll ultimately have to deal with both those support groups but it’s better for everyone if you can go about this sequentially and not as a clusterfuck.
You’re in luck. It’s just the capital markets head and he gives you the confirmation that 400 jobs in the left-handed asset-backed business are going. He asks for a press release and press plan by mid-day tomorrow.
So far, everything is straightforward. But not for long.
The HR department is immediately in your ear with all sorts of talk about doing things the right way, being sensitive, adhering to the letter of various labour laws. Fair enough, but since the rationale for this move was to impress investors that you could implement necessary cost savings, the HR sensibilities will be seen very much as secondary.
And then you get the call from your contact in IR. If you have any sense about yourself as a PR person, you stay close to the IR people. For as much as you think you know investment banking, they always know more.
He suggests a cup of coffee at the café across the street. When you sit down, he makes it clear that they intend to bulk up the 400-job loss number to around 600 through head nods and hand signals. They also intend to send a not-so-oblique signal that more desks will be shuttered down the road.
You thank him for the intelligence and then ask him to keep you posted if certain analysts – those who have an open line to senior journalists – are getting aggressive about this. On the way back to your office you stop to see the chief operating officer to let him know things are in hand. He asks if we should leak it this afternoon. “Let’s save the bullet,” you tell him.
The press release takes 15 minutes to write. You send it to the capital markets head for his approval; the IR guy for a gut check and the HR department as an FYI. (That won’t however stop an earnest young HR functionary coming to your office the following afternoon, saying he wants to talk about the release. You will smile and let him know it has already gone out – one more friction point between PR and HR.)
The press reaction goes as you expect, although these days the myriad of secondary weeklies, bloggers and smoke signal senders will be crawling up your PR officers’ backsides trying to make a three-course meal out of what is just really panini and a diet coke.
All pretty tame stuff, until you get a call from your IR friend who suggests another coffee across the street. What he says is truly troubling: the analysts have started connecting dots across previous statements and market rumours which – surprise, surprise – have been coming from your competitors.
There is credible talk in the marketplace that you’re going to shut down all the ancillary bond business. That means another 750 people are in line for the axe and your future income streams will be squashed.
What do you do? If you’ve seen those old World War II movies where the guys in the submarine are waiting for the destroyer to drop its depth charges, you will have an idea of how it feels.
And sure enough a call comes from a reporter who says he’s got it from a good source that there are more closings to come and you’re reconfiguring your bond business.
You can look for the PR playbook if you wish, but you probably won’t find this particular challenge in it.
You are now totally free to operate as you wish.
The best approach is to sit down with capital markets head and the COO and figure out a strategy whereby it is acknowledged that you’re at least looking at the bigger bond operation. When in doubt, telling the truth is not a bad operating credo to live by.
And what about the HR people and their desire to treat people humanely? Almost forgot them. Sadly, they’re still knocking on the door asking to talk to you about the left-handed asset-backed folks when the whole trading floor is polishing up its résumés and dialling for dollars to recruiters.
As every annual report will tell you, people are the primary resource of any investment bank after all. Unfortunately, the report never tells you that the share price trumps all.