August 28, 2013

Fixing the Communications Glitch

It is easy to do armchair analysis, Monday morning quarterbacking (or whatever you’d like to call it) and simply criticize a CEO for an inadequate communications strategy.

So a couple of caveats before I make a few critical comments:  1.  The following is based on what I saw as a public consumer of media; I have no personal knowledge of what happened at NASDAQ-OMX last week.  2.  I have to be respectful to CEO Robert Greifeld.  He is not a public relations professional, and his first and foremost responsibility is to take care of NASDAQ-OMX.

With those caveats in mind, however, I do take issue with Mr. Greifeld’s comments regarding NASDAQ’s recent technological trading glitch.

Mr. Greifeld was criticized heavily for his lack of communication with the media last week when his company halted its trading operations (CNBC chronicles some of the financial community’s unhappiness here). While he focused his efforts on fixing the problem (and rightly so), I would also argue he had a public responsibility to calm nerves and reestablish trust.

This is why I — and others in our industry took — note when Mr. Greifeld told CNBC that “communication was done and we came back and we came back successfully. It’s not our job nor will it be to go on the press, to the press and the public while we focus on the issue.”

Fair enough.  Fixing the issue at hand is most definitely the most pressing concern.  But the importance of communicating with the media and indeed the public in a timely and clear way cannot be overstated.

In this case, one of the classic rules of public relations and crisis communications was ignored:  Admit to the problem up front. Get the bad news out of the way, deal with the problem, and arrive at a solution in a transparent fashion.

Despite Mr. Greifeld’s initial feelings to the contrary, corporations have a responsibility to communicate with their public stakeholders in real-time fashion. Obviously, there are matters of confidentiality, and the public is not meant to know every detail. But when a situation directly affects the lives and decisions of those stakeholders on Wall Street to Main Street, the company in question must respond in kind. The same is true, by the way, for lawmakers and governmental organizations.

The recent news provides an opportunity for businesses large and small to ask a simple, yet critical, question: “Do we have a crisis communications plan in place, and would we know what to do to speak to our stakeholders, shareholders, etc., if a crisis were to happen?”  Every firm should have such a plan in place and review it at least annually to make sure it’s still timely and relevant.

Those who ignore this basic approach risk being distrusted by the media and public at large.  NASDAQ and Mr. Greifeld should prevent that sentiment and review media policies and procedures.

Seth Linden, Executive Vice President