SVB collapse and the Importance of Internal communications Strategy
The Silicon Valley Bank collapse has led to a communications crisis that’s put leadership and organizations at risk. But an effective strategy can help leaders ease fears and move forward with transparency.
Much of the frenzy leading up to SVB’s collapse occurred online, with little intervention by spokespeople or company leaders working to quell the panic. In fact, many investors, company founders and CEOs took to Twitter and other private chat groups to express their concerns, and even encouraged business owners to pull their funds from the bank.
In the aftermath of the collapse, SVB’s CEO Greg Becker sent a video message to employees, acknowledging an “incredibly difficult” 48 hours, but encouraging employees to “try to support each other, try to support our clients, work together.”
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“I can’t imagine what was going through your head and wondering, you know, about your job, your future,” Becker said in the video, according to Reuters. “Thank you, and my heart is with you.”
This type of messaging is too little, too late, says Chris Donahoe, executive vice president and co-head of U.S. Operations for Edelman Smithfield, a financial communications firm. Instead of reacting to a crisis situation in the moment, leaders need to be prepared to immediately answer questions and concerns, before misinformation spreads.
“Hearing from leaders early and often is a critical first step to avoiding misunderstandings and fear that can run rampant and be damaging to an organization,” Donahoe says. “What’s really critical for business leaders is that they don’t let information vacuums grow or exist in their workforce, because when people are asking questions and there aren’t good answers, rumors start to spread. You just start to create a lot of new problems.”
Donahoe recommends that any business directly impacted by the SVB collapse create a centralized hub of information regarding the situation — whether that’s on a company’s intranet, by hosting a town hall or virtual meeting, or through other reputable sources of information they can guide employees to. Ideally, having a communications strategy in place for any crisis well before it’s actually needed can create a foundation that’s easier for companies to build on, Donahoe says.
“Those companies that invested and prioritized internal communications before this week would be in a substantially better position to answer employee questions and to quell anxiety,” he says. “If not, you’re needing to set up those processes, and also educate your employees about where to look, and what are the authoritative sources of information as it becomes available. As with anything in life, you’re usually better off if you’ve taken the time to put in the preparation upfront.”
While having centralized and accessible information is important, what’s even more valuable is leadership response, Donahoe says. In the event of a workplace crisis, leaders should reach out to employees directly and get a sense of how they’re feeling and what questions they’re struggling with.
“Walk the halls, direct message people, pick up the phone,” Donahoe says. “Share as much as you can with people and have it be rooted in trust. If you’re able to do that and bring your employees along with you on the journey as it becomes clearer, you’ll be successful.”
For many employers, the SVB collapse will not have impacted them directly, but employees may still have concerns over the financial health of the business, or questions around what could happen if the crisis deepens. Donahoe says leaders should stick to the facts and avoid creating a worst case scenario that doesn’t exist.
“If you’re sticking to the facts, you’re not wrapping it in extraneous information that is more open to differing interpretations,” he says. “You don’t want to make things up. Be very clear with what’s going on: ‘We know what the situation is and what the plan moving forward is.'”
As situations change, a company’s communications strategy should, too. What worked at the beginning may feel out of date with the concerns and questions employees may now have. Leaders need to be agile, Donahoe says.
“If there’s a breaking news cycle, or a new regulatory development, or a new business development, that is a new opportunity and an additional need to provide new communications to your employees,” he says. “Then base future communications and the cadence of those communications on developments in the real world, or changes in the questions employees are asking.”