Filing Chapter 11 bankruptcy can cause the ultimate crisis in confidence, says Diana Lueptow, vice president of public relations firm Edward, Howard & Co.
Lueptow should know. She is director of Edward Howard’s turnaround and reorganizations practice, a program launched last year to help support businesses in trouble.
The practice was established in part due to the poor economy of 2001, but also as a response to the special public relations issues that face at-risk companies — the need to minimize negative impacts of initial Chapter 11 filings, restore management credibility and communicate fundamental strengths of companies and their turnaround strategies.
Dealing with financial difficulty is stressful, and often, the “ability to stabilize is a value CEOs don’t realize,” says Lueptow.
Nothing can replace a strong turnaround plan, but Lueptow says there are several things companies going through reorganization or a turnaround can do.
* Maintain a public relations campaign. You may need to rethink the paths of communication you rely on. Lueptow says executives often forget to address these needs when they’re under the pressure of bankruptcy.
* Create a working communications system. Lueptow says one of the first steps should be to create a comprehensive system of e-mails, conference calls and Web site postings to disseminate accurate and current information to employees, investors and customers. This will help prevent rumors, maintain confidence and keep management credibility high.
* Find the positives. When reorganizing a business, solutions may include mergers or layoffs. Either can be emotionally taxing for everyone involved, but good public relations work can alleviate the situation. Lueptow suggests identifying the positives of reorganization and playing off those strengths.
Effective communication, says Lueptow, is the most important element of reorganization. When a company is willing to accept change while maintaining a strong public persona during a crisis, odds are it will outlive the financial troubles. How to reach: Edward Howard & Co., (216) 781-2400
