Corporate transactions, mergers & acquisitions, friendly or hostile, active or passive, and issuing shares on the stock exchange, are always a special challenge for both the organisation(s) and the advisers.
In 2020, Brunswick (which I recently left after 13 years), the clear leader for a long time, has again made the top rank in corporate transactions in Europe and UK in the MergerMarket league tables. Great success, (ex) colleagues!
It’s a good thing to have a great track record of successful transactions and to be part of a success story.
The fascination never fades, and the projects keep coming.
This recognition may sound abstract and trivial. But it’s valid — and important. In crisis, the best advisers definitely are honesty and ethical behaviour, plus the legal consequences. The right type of crisis manager and crisis team is a basic prerequisite.
Watching different crisis cases being managed at present, several thoughts come to mind. When called to help deal with incidents and crises, one sees why crises happens in the first place and too frequently is coped with sub-optimally. I try to make a few important points in this article.
The dictum is relevant in both cases: whether one has to manage a crisis — like a pandemic or an economic crisis — or one has to cope with a self-made crisis — like a scandal or accident.
There are always three dimensions in observable reality, also here. One concerns people who are affected directly, experiencing physical or material damage. The other dimension includes the persons and the organisation (or organisations) responsible for the incident, and/or bound to deal with it, often accountable to owners and responsible for employees. The third dimension is the outside, comprising relevant authorities, the justice system, the public, and the media. The latter is split into groups which are directly involved in the case and those who are observing and may take longer-term influence.
The Stakeholder Principle
Each of these groups has different perceptions and views and — most importantly — different interests, rights and legal obligations. Hence the denomination “stakeholders“.
From the perspective of the crisis originator and/or crisis manager, in situations of incidents or crises, it’s indispensable to adhere to the stakeholder principle.
In many cases, when incidents become a crisis or when a crisis seems to be managed sub-optimally, one reason frequently is that the legitimate interests and rights of stakeholder groups are not considered enough, or not at all.
Time and again, one witnesses that responsible persons take a position of self-centredness. They are exaggerating their role as doers. And they become full of self-pity when things get difficult and criticism arises. (It’s really “and“: they are in both psychological states, outwardly switching between them.)
The top people should not give in to the reflex that they should, or were obliged to, jump in as the crisis manager. There are many good reasons connected with functional and legal Incompatibilities why top managers cannot act freely enough as crisis managers while escalation levels are taken away. Cases are legion in which the idea cost mighty CEOs their heads.
What one needs for that position, or as a minimum with a significant role in the team, is a person (with a stand-in) outside the leadership who has both a full overview over the stakeholder landscape and good insights into each of the very differently natured stakeholder groups.
This is necessary because nowadays, out of their experience and own pressures, highly engaging, nervous and skeptic, well-informed, mutually networked stakeholders immediately march up to make demands or try to take charge. Stakeholder “management“ or relations are a strategic task (that is too often underestimated or overlooked).
Broad focus on Fairness
With the self-centred approach it’s actually very hard to manage a crisis successfully. Whereas crises can never be “perfectly“ managed; compromises are always necessary. This is also a matter of perspective — one can say:
A crisis is in total managed perfectly, when for key stakeholder group the impression is that the outcome is below perfect and that this is true for all groups.
If the crisis managers focus on themselves and forget about the stakeholders or ignore them, then the thing will not go well and everyone will be dissatisfied in the end, including the crisis managers. If one believes one can be anyone’s hero as a crisis manager this is utterly naive.
So better to play it smart from the start. That means considering all stakeholders and managing the crisis as a compromise process between the different legitimate interests. One can then call this ethical behaviour.
To be a crisis manager means serving others.
Real leadership personalities and decent politicians do not put themselves and their power and election interests first, especially not in a crisis.
The right to Truth
One absolutely critical right of all stakeholders is the right to truth.
Of course, also truth is relative. But it’s not an option to say the untruth, to consciously lie or purposely twist the truth (called “spin“ in the doubtful practice of PR).
Saying the truth includes being open about what one doesn’t know. There are always known unknowns as well as unknown unknowns — as a crisis is a complex process with high unpredictable dynamic and chaotic and exponential tendencies. Nobody can seriously expect perfection, also from that perspective.
Only weak responsible persons try to make it look like they know everything and have everything under control. This is simply not believable, especially in a crisis.
o better to play it smart from the start. Here, that means saying true things (not necessarily all things) and being straightforward about what one doesn’t know and cannot know. It also means being self-critical and honest about decisions that have proved problematic later.
To admit one has erred in fact increases credibility and trust.
Criticism will always occur and be at least partly adequate. Good crisis managers and real leaders accept this and don’t denigrate criticism as untrue, unethical or insult to majesty. Crisis management must not be misused for a PR show or self-magnification exercise.
Law and liability
Respecting the rights of stakeholders and the right to truth certainly does not mean that crisis managers are forced to expose themselves to legal risks.
We live in a society that is ruled by law which is generally positive, even if sometimes legal regulations can be imperfect, excessive or unworldly. So it is fair to allow managers to have to comply with the law.
It’s important that it is taken into account that crisis managers need to manage their legal risks and their liability.
Legal regulations set a limit to what a crisis manager can do and say. This has to be accepted. What is correctly done under the rule of law has to be considered as ethical. This is true even when for this reason the truth is not being said, meaning not the full truth, rather than the untruth.
Fairness and honesty towards the stakeholders are imperative.
In sum, the best guidance for crisis management is provided by ethics and law, and the best success is verifiably achieved when stakeholders are respected and the principles of fairness and honesty are honored.
The needed crisis manager and crisis team
Further, it’s important to take a look at the right type of crisis manager.
In crisis management, one is well-advised to involve experienced crisis managers, legal experts and ethics-philosophers — and to follow their aggregated advice.
Today, crises are often totally different from the “normal abnormalities“ one has been used to. In many cases, they are non-local, non-physical, non-single-event, systemic, complex and enduring with crises in crises. Think of the current main risks like compliance issues and crime cases, cyber attacks and confidentiality breaches, problems like violations of human rights, equality and bad personal treatment, social media warfare, product recalls and boycotts, and the like.
In contrast, the classical crisis manager hass come either from the safety and security, local accident or from the risk management side. The first area is also the one in which organisations are well prepared, alone due to legal provisions and certifications.
In view of the contemporary main group of crises cases, the ideal crisis manager is oner who combines a few components: crisis-testedness with the necessary personal character, stakeholder competence, legal understanding, high ethics, and a serving mentality. Rather than in local emergency scenarios, in a real team player, empowering the crisis team, is better than the old commander type, but still willing to take decisions and responsibility.
The team should be organised and authorized as a special organisation in the organisation for special situations. It needs to contain necessary expertises and organisational functions and areas as well as operative insight and access. A personality suitable for crisis and voluntary willingness, besides skills, have to be key aspects for the nomination.
The crisis team in most organisations will, and can, be not a permanent, waiting but an ad-hoc unit. Regular efforts for team building, resources and infrastructure, and training are self-evident.
If one knows there is a good crisis manager as part of a good crisis team at work, one can sleep well — and dispose of useless in the specific case crisis procedures and manuals.
Performance management, with attempts to enhance, measure and control and with various “change” projects, is currently much en vogue. The risk of disappointment and unintended damage is not low. There is a much better science-based approach, the successful concept of a Caring Culture that I found and want to promote…
The hypertrophic word “performance” definitely needs a contemporary definition. In fact, there is a great replacement, and it’s connected with much-needed empathy.
Many organisations keep dreaming of “better performance”, and they time and time again try to implant in their workforce.
One problem is that “performance” is a broad, vague, hollow and overused term (like many buzzwords in business jargon). On a close look, performance is a mean, not an end. It refers to outPUT, activity. In reality, outCOME, results, steady adaptation in the sense of improvement, are what counts.
There is the next problem. In human organisations, from partnerships and teams to clans and big corporations, Complexity rules. They are complex systems of complex individuals with complex interconnections. And, as a law, Complexity forbids direct command, steering and control. Including control or command of “performance“.
Context is the mans of choice under Complexity
The solution is Context. The only way to “manage” humans and human organisations is by Context. This means providing meaning and perspective, a vision and a mission, purpose, goals and rules.
The best managers manage to “lead” the people entrusted to them by inspiring them to care.
Caring means being aware and prudent, being proud, sensible and sensitive of what one is doing, to assume responsibility for one‘s part and the whole. It also means being of help to others, the end user as well as co-workers.
The Caring Culture as permanent aim
If this is approximately achieved in an organisation as an element of „Culture“ (i.e. the way things and people are treated in an organisation), then the managers have achieved an enormous task and can let go. The wonderful dynamic of a complex system will set in and, as effect of collective activities, positive, highly intelligent adaptive behaviour and solutions will emerge.
It appears like a miracle when good outcomes and solutions just happen. In fact, there is a strong theory behind it.
Performing means caring
In any case, a meaningful and fruitful definition is: PERFORMANCE MEANS CARING.
Actually, one can cancel the old term and work well with the better one: It‘s not “How are you performing?“ — it‘s “How much are you caring?”
Purposely, there is a social, emotional aspect to the term “care”. It also refers to being (able to be) empathetic. This is hugely important since, both in business and society, there is a growing lack of empathy.
Much more empathy needed, everywhere
The circumstances of our time destroy empathy and trust in many ways. If we would have more of them, we would have many problems less.
Consistently, “at work” (including home office), where we spend a big part of our life time, it is good to have a lot of empathy and trust-building.
So let’s measure and improve the levels of caring instead of performance in our organisation and environment.
If communication is to be effective and deserve respect, the concepts, practices and the industry must change.
This brief and condensed, dissident, potentially provocative, earnest and well-intentioned opinion piece is put forward from 30 years experience out of annoyance and serious concern.
The findings also draw from complexity, social, neuro and strategy science.
In many cases, communication and PR don’t bring the desired or necessary results despite best efforts. The practices are insidiously degenerate and unconsciously contribute to the general decline of trust. Misuse of communication‘s capabilities is a threatening phenomenon, even if unintended.
The reasons become clear by a critical look at the reality of the communications practice and industry, bulletpoint style.
The destructive issues
Communications have been industrialised — with trendy standard products and processes under changing labels
Communications as a service — no role in decisions on fundamentals
Limitation to short-term operations and tactics — uncoupled from general goals and strategy
Focus on output and content — alibi actionism with hyper gibberish
Best practices and copying — unoriginal, generalised, same old exercises
Self-centric, top-down, one-to-many unidirectional megaphone thinking — stakeholders and social interests are neglected, or violated
Control illusions, also in the Internet — hopeless approach
Never-ending search for measurement — using irrelevant criteria
Profit growth pressure at communication service firms — selling instead of giving advice, focus off clients and their progress
On the dark side — untruthfulness, whitewashing, unethical practices, wrong assignments and principals
Unreflectively, communication practitioners and careerists are trained in such negative and risky habits.
What functioning communication means
In contrast, for communication to achieve real results and (re-)establish trust, one needs to adhere to these principles.
Deal with communications as a continuous, open process
Communication means behaviour in relations
Treat the specific case starting from zero with fantasy
Orient on the superior objectives, values, and strategy, and the long view
Begin and steer with context, i.e. outcome, goals, rules
Consider all entitled stakeholders focusing on reactions and desirable behaviours (also in measurement)
Convey the reality and truth and offer esteem and respect
Go to the controllable root which is the own behaviour
Earn acceptance, appreciations, trust, resilience by responsible behaviour towards stakeholders and in society
Support positive change against resistance of the unsustainable
Very simple and very hard, like most change and purgation, but the sensible choice if the communication practice and industry shall have a bright future.
The pandemic acts as a magnifier and accelerator (in a Complexity process) in many aspects. If we look at the current events around the world and the longer-term impacts on the democratic political system, we have to be very concerned. Democracy is in danger. Many a self-evident fact is completely forgotten. Encouragingly, there are positive counterexamples, like Frau Merkel’s apology. One hopes they make fashion.
Actually sad one has to say this…
A built-in “flaw” of the democratic system is the circumstance that politicians think in terms of the next election ahead, and the fact that the decision-makers want to stay or in power.
Politicians are tempted them to think in the short term and selfishly.
Even more than that, many give in to the dark enticement to say the untruth, or not say the truth, and to work with “spins” and unfair gambits.
Some top politicians, as it suits their agenda, freely use or hit at state institutions, destroying not only their own credibility but the trust in justice, law enforcement and police, the educational, health, pension systems and others — and ultimately in the superordinate system.
Quite a few politicians place themselves above the political system and use it for their own petty purposes.
One observes this also in business, authorities, and institutions, when some bosses forget they are employed or elected and have been entrusted the organisation. (It’s amazing how often they get away with this.)
The pandemic shows: In politics, like in many areas, tactics rules, instead of strategy. Much to much is not only party-political but oriented on personal advantage. Seemingly, as, in the long run, it falls back on the politician in question anyway.
Tragically, these mistakes and misbehaviours are substantially damaging the democratic political system.
We see the “camp” of non-voters growing and growing. We see regular, decent people join extremists, fascists, vandals, mobs in Internet forums and demonstrations. When they shout “away with the prime minister” and “the government must go”, it ultimately means “away with the system”, which is democracy.
The trust in governments, the political system, the state institutions like justice, police, schools, health and pension systems, is rapidly eroding.
Many of the current politicians are contributing significantly to this. The vision of what we will end up with is dystopian and frightening.
Politicians must wake up and live up to their responsibility for Democracy in every situation and everything they do.
Otherwise, the outcome will be the destruction of Democracy. No more and no less.
There are rare counterexamples. I am certain many are still very impressed with German long-time chancellor Angelika Merkel’s statement on 24 March 2021: She took full personal responsibility for the zig-zag course in the fight against the pandemic and false decisions that she annulled, and she apologised to the citizens.
One must fully agree with those who say what an — unfortunately — unusual act this was, and that all politicians should take an example.
Taking responsibility is not a goal or a choice — it is an absolute and everlasting obligation for all and any decision-makers.
To be responsible does not only mean one has the power to make decisions. It means one is responsible, not only for the case at hand but for the system one is part of, one works for — and most of all, for the people.
One earns trust when one handles what one is entrusted with responsibly.
The ongoing crisis proves complex problems require complex solutions. Trying to trivialise the problem and/or responding primitively, i.e. in mechanical, linear fashion, mandatorily leads to failure, increased and added problems.
Worst crisis in 100 years for many (matter of perspective with huge problems unresolved, think climate, inequality, violence). “Corona” certainly is a very bad crisis case deserving the designation “complex“.
Seen coming? – “Pandemic” has been in the top risks for security and experts. Acted on it? – Hardly. General precautions like robust care systems in some places, research capabilities. But no scenario exercises with decisions and coordination, no mental, operative, structural, relational preparation.
Decision makers in governments and organisations improvise along the surprising development beyond direct control. Strong men disenchanted. Crisis responses erratic. Acceptance decreases, resistance grows. Rethink now, complex response needed.
Governments, take control by context, broad concurrence, international cooperation, individual contributions. Organisations, trash crisis manuals and adapt crisis systems to contemporary threats at last.
Never too late to grow up to maturity – and earn trust.
Though 1,179 respondents per country are not representative, the 2020 trust survey by big PR firm Edelman in 28 countries is covered broadly and again interesting in several ways.
The results are further evidence for the perceptible decline of trust, across politics, NGOs, business, media. An obvious interpretation is the pandemic and crises, and their impacts and handling, have had an effect in the form of (pessimistic) mood and (low) trust levels – but in fact the development started long before “Corona”.
It’s interesting that in Germany, and probably similarly in the germanophone area, business is less trusted than internationally, and the government gets best marks globally. This goes hand in hand with growing criticism of capitalism.
Distrust in media, important control and counter power, is tragic. The very low trust in social media shows people are reasonable there. It would be interesting to research the trust in PR 😉
I don’t share the (typical PR) conclusion business leaders ought to take a public stand on general problems. Strategically, that needs to be limited to the sphere of the specific business core where solutions can be contributed and trust built by responsible behaviour towards stakeholders – the only factor under own control.
Pandemic management needs to take a much broader perspective and become more flexible, balanced and diversified. The social and human aspects must be considered much more.
What we see in several countries with still rising numbers and lockdowns as the only idea of policy makers is the consequence of the management approach of “manage what you can measure” – misled “pragmatic” twisting and narrowing of the original concept.
In life, we have a personal ID, a registered address, a passport number, a social security number, etc. In the Internet, (we think) we are anonymous and free of responsibility. So more and more succumb to the epidemic of spreading nonsense and attacking others.
Every day I am confronted with people and organisations desperate, helpless and hopeless when a misguided furious mob goes after them. People forget all restraint and rules of decency and law. Violence spreads. It keeps getting worse.
This causes damage to fellow humans and to society. And it is infecting real life behaviour.
This must end. It is time to act.
It would be good to start an initiative or petition of the well-meaning. What do you think?