What goes around comes around...
- 1 Feb 2010
- David Stocks, Client Partner, SAS
I couldn’t help but notice that our former client Ericsson is once again having to deal with tough market conditions, not unlike those which the company faced when we worked together from 1999 to 2004.
With profits down by 92% for the full year, it’s not as bad as the conditions we faced together following the dotcom bubble burst, but it’s still serious. Ericsson remains a leader, but when network operators stop spending, it’s always going to be hard for Ericsson despite the quality of its infrastructure technology, which is world-class.
How should a company in this situation communicate with stakeholders? We learnt some important writing lessons that can help sustain a company’s reputation during such times.
1. Use human, straightforward language. Nothing is likely to undermine trust more than corporate clichés and meaningless platitudes. Sadly we see this in so many annual reports published.
2. Don’t avoid the direct questions on shareholders’ minds. We did not duck the issues, and looked instead to demonstrate that while the short-term outlook was tough, history showed that the roll-out of technology often took longer than anticipated, but always resulted in growth in the end. In others words to show that Ericsson remained a leader – just a leader in a tougher short-term market, which would inevitably turn again.
3. Keep it simple. There is nothing like a crisis to focus the mind. We managed to break legacy writing methods and instead looked to say just three key messages because we recognise that for all the compliance data issued, it is often difficult for audiences to understand what a company is trying to say.
4. Don’t dumb it down. Every message was underpinned by solid evidence to support it. In this, clear structure is everything. The reader must be able to follow the logic of the argument in direct terms, not left to construct the pieces on their own.
5. Avoid spin. Nothing we said was not true. We looked for authenticity in everything that was stated.
When Ericsson emerged from this difficult period, a shareholder wrote to say that because he felt the company had told the truth during the bad times, he felt he could trust the company in future good times.
It remains a high point in 25 years of corporate reporting for me.
David this is a lovely article. The learning you have highlighted is powerful, and transferable. I look forward to applying it in the world of employee, customer, and social engagement. Thanks. Oh, and as the owner of What Goes Around Limited, I just love the title!