Internal Communications

Planning for the Black Swans: four lessons from the last two weeks to help get ahead of the next crisis.

Reflections for leaders in the aftermath of the March 2023 banking crisis and how to prepare communications around what you can’t predict.
helping hand crossing over to other side

News started breaking by March 9th, 2023 that there was trouble brewing at Silicon Valley Bank. Cleary does not bank with SVB, but like many of you in leadership, finance, and people teams, we still had to react, make quick decisions, and communicate with a broad set of stakeholders. Just as the Cleary board was working through our decisions on what to do next, news broke that Signature Bank, along with SVB, was taken over by the FDIC. Dealing with the aftermath took most of the weekend and following week for us, just like it did for many startups and small businesses throughout the country.

 

During this time, I was communicating with investors, customers, and partners. Many of you were under pressure as well, conducting the painstaking background work to ensure payroll would be met, contingency plans were in place, and that every teammate and stakeholder had information at the right level. Now that we’re about two weeks out from the initial fallout, I can take a step back and take a look at some lessons learned:

 

1. Expect black swan events…they will happen.

 

If you’ve been in the game long enough, you know major moments of crisis are inevitable. It’s when, not if. Great leaders may even have trained themselves to have the mindset to sniff out crises as they are happening to get ahead of a response in a calm manner – I am thankful to have been privy to great counsel in this particular crisis that exemplified this. Besides a financial crisis or a pandemic, there are numerous scenarios that can be expected to happen at some point, if not for you, for your peers: a key executive leaves, a fundraise falls through, a keystone customer churns, or a data-breach. I remember a conversation with an HR person at a startup telling me about how they had to work through a situation they never expected to be in: an employee got in a terrible accident and they needed to figure out what they should be doing to support the employee and their family with no policy in place. It’s hard to have every scenario planned for, especially as a younger organization. However, developing the mindset that it’s when, not if, gets you ready. If nothing else, it helps leaders be calm and steadfast. Let’s all avoid death scrolling on Twitter or LinkedIn, mouth agape, when the next inevitable black swan event happens. Great short talk on preparing for black swan event here.

 

2. Decide; Faster. 

 

Making quality decisions quickly in a crisis is key – especially for an organization.

 

Who should be involved? What’s the cost of indecision? How quickly does the decision need to be made? Is it reversible? Do we have core values around making them? Who needs to know and by when? There are lots of questions to answer fast. There’s plenty of ink spilled around decision making frameworks but the key insight I have from this moment is that all of the habits you build up in peace-time gets you ready. Get the principles around decision making laid out, so when the next fallout happens, you and your organization are nimble and can react quickly.

Organizations are constantly making decisions. Each of these can be seen as trials to get ready for the next “big one.”

 

The Everyday Project: teams are exercising their decision making muscles daily – from tradeoffs the product and engineering teams have to make around the development of a new feature, to the sales team deciding whether to use a new productivity tool, or the people team making decisions around an Employee Experience Platform 🙂. Each small decision makes the next one easier and can build up to big decisions. Fundamentally you ask many of the same questions you would in a crisis without the clear need for speed. Teammates communicate and negotiate decisions with each other in the classic scoped project.

 

Reactive processes: the processes built out around how a company provides customer support becomes one of the most robust decision making examples they have. Anyone engaged in the process learns about what’s to be done, what’s valued, what needs to be communicated, at what time, and with whom. Closed-Loss analysis and deal-desks are similarly getting folks engaged in those processes and preparing the relevant parties to consistently make quality decisions on principle.

 

Actual Crisis Planning: as a software company, we are paranoid about scenarios that can impact our core value-proposition – that our software just works. In addition to having an actual disaster recovery plan written in case our servers go down, we conduct table-top exercises to simulate a crisis to ensure we can react quickly. Similarly, any production incidents of sufficient impact automatically trigger a post-mortem. I’ve found that the language we use to communicate around these processes and the questions we ask have helped us do the same for crises of a non-technical nature as well.

 

3. Crisis Communications.

 

In a crisis, it’s great to have the team making decisions well and executing them well. But that’s only half the battle. The other half is communicating well.

 

If you have more than even five stakeholders, there’s just no way around doing this with structure if you want to navigate your way through it. A crisis communication plan with FAQs is almost always useful. You might have different stakeholders between a company’s board, broader investor base, management, employee base, and customers. Depending on the content, you might have a shared set of basic information for everyone but you may also need to tweak and get into more details that directly impact each group. For example, employees in this case need to know about whether their next payroll will run. Customers need to know that your service will stay up. While investors may be more focused on stewardship of capital and financial details.

 

With organizations greater than ~50, cascading communications to various stakeholders should almost always be a part of the plan. Start with leadership and management before addressing the entire employee base. We have seen this successfully executed, hassle free, with our clients using Cleary’s Comms tools, of course.

 

We have seen our customers’ CEOs leverage our platform to share a one-off video communication with their teams – in their own voice – to ensure they’re aware of what’s going on and how the issue is being addressed. Unlike days of yore, executives don’t feel the energy of the employee-base in the room and great Internal Comms teams share analytics and feedback around employee engagement with the comms.

 

Others have addressed the uncertainty at a regularly scheduled all-hands, or in extreme circumstances, set up a live meeting right away. Another option that chould be added to the mix for the modern distributed organization is an AMA, so employees who are shy or uncomfortable sharing questions can still have their concerns brought to light. 

 

4. The Rule of 3 for when you’re not sure.

 

After spending a lot of time getting to key decisions around how we would manage our finances at Cleary, communicating with investors and the board, for a moment, I thought we should be all set. We don’t bank with SVB, so there’s no need to talk about this with employees – they have enough going on – and it’s silly to bring up something with the message of “it’s nothing.”

 

Meanwhile, we had several messages from various employees who were following the situations and were wondering whether we were impacted. That’s how I hatched the simple Rule of 3: if you get the same question from three different people in the organization, share what’s going on proactively with that stakeholder group.

 

So the decision was easy – we sent the same message we sent to investors to our employees with some additional observations that were more relevant for them. Beyond that, I addressed it in our all-hands Monday morning as it was the top most upvoted question.

 

When you know you’re in a crisis: sometimes it’s obvious and sometimes it’s not. Even if it may not directly impact you or your team, there is a chance you will still need to communicate around it.

 

So there it is – four quick lessons from our experience and those of our clients over the last couple of weeks. Ok…on to the next one!

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