‘It Won’t Happen to Us:’ The Dangerous Mindset Minimizing Crisis Preparation

Most financial companies only start thinking about crisis management when they’re already in the middle of one, making the impact far worse than it needs to be. How can companies ensure they’re ready and avoid critical mistakes that could cost them their reputation?

Common Mistakes in Crisis Communication

The main mistakes in crisis situations include companies staying silent and not releasing official statements from management, creating a vacuum of information and promoting the spread of rumors. For example, during the Credit Suisse collapse in 2023, the bank failed to communicate effectively with its stakeholders. Credit Suisse largely remained silent, allowing speculation to spread. It was later revealed that there were multiple discrepancies between official statements and the actual measures taken, which further fueled market panic and eroded trust.

This example highlights the following mistake: vague and uninformative official statements. In a crisis situation, it is important to clearly and very precisely explain how it will affect customers and what steps are being taken to solve the problem. However, it’s not enough to simply explain the problem; companies must also react in a timely manner. Long-term coordination of the official position with lawyers leads to a delayed reaction and ignoring social networks makes it impossible to quickly convey the company’s point of view to the audience.

The lack of a pre-formed anti-crisis team — including PR, lawyers, marketing and top management — with clearly defined roles and action items, can also have a negative impact. Companies’ uncoordinated and emotional statements by founders or senior executives may only exacerbate the situation and cause even more distrust. All public statements should be formulated beforehand with a cool head.

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Key Principles of Crisis Communication

First and foremost, companies should not underestimate the importance of communication, especially when things are not going well. During a crisis, many companies prefer to sit quietly and wait without informing or sharing anything about their measures and actions in connection with the crisis. This is the wrong approach.

Silence gives competitors enough space to thrive and gain a market advantage. Meanwhile, journalists won’t stop working on hot stories. When you don’t share anything meaningful with them or your audience, they may collect and publish rumors and misinformation about your company. And the lack of comments creates the ground for negative interpretations.

Therefore, transparency and efficiency are key principles of anti-crisis communication. If you are clear in your messages and give quick responses, it allows the company to control the information agenda. The surefire way to gain and maintain trust is to promptly and regularly inform your company’s investors during a crisis through your own channels. Post statements from representatives on social media every two to three days so that people don’t have to worry about the unknown.

Publishing official positions in respectable media further strengthens the company’s credibility. To achieve it, build the right communication strategy: adhere to a single official position, provide clear and structured information, and ensure that messages are accessible to customers and partners. Depending on the level of turmoil in the company, the list of actions can include organizing the dissemination of information by wire or even a personal interview with a company representative and subsequent publication.

How to Prepare For a Crisis and Minimize Reputational Damage

Before launching any PR campaign, it is worth carefully examining the crises competitors have experienced, how they got out of difficult situations, what statements they published and where. Learning from the mistakes of others means not only avoiding problems, but also adopting the best solutions.