Write to Know

Quick Summary: As events occur, take time to keep investors informed with an interpretation of the information.

Abstract:

Events, both good and bad, seem to occur daily in virtually every organization and within their associated business community.  Different events will have different significance to each of the four company investor groups.  Implementing a consistent outbound communications methodology will help keep all investors informed of events and your interpretation of their impact on their investment in your company.

One of the lyrics in a Harry Chapin song (song writer and performer, 1942-1981) is “Empty spaces always ask for filling”.  This is a less cerebral way of saying “nature abhors a vacuum”. No matter which form of the notion you choose, the concept certainly applies to all four of the different groups of the company’s investors.  All of them have a vested interest in the company and are anxious to know the current status of their investment.  Without direct communications from the company’s management, they have no other choice but to make assumptions about how well or bad the company is performing based on information from other sources.

The rumor mill is always present.  As we all experience, bad news, whether true or not seems to spread much faster and linger much longer than good news.  There is a saying in the broadcast news industry that if it bleeds, it leads.  When was the last time you heard “Nothing but good things happened today, details at 11 PM”?  Something as simple as a press announcement from a competitor can lead people to believe that the company is losing market share or is falling behind or, in some other way, is not performing as well as the other company.

When the company is out of sight, it is out of mind.  Except for the company’s employees, the company is probably not top-of-mind to the other investor categories; partners, customers, and financial investors.  Some triggering event may make them think of the company and then wonder how the company is doing.  For employee investors, even the slightest bit of potentially bad news, whether real or imagined, can start the rumor mill spinning with ever increasing momentum.  Rumors are not like fine wine that gets better with age.  Also, they are very slow to evaporate and may, in fact, turn even sour.  Rumors can never be totally eliminated; some may even be positive and to the company’s advantage.  The key is to build a reputation, through repeated actions, of being informative and transparent.

Accept the fact that all of your investor groups have the right to know what is going on in the company, and in the market place. You have an obligation to write to them to keep them informed.  In this context, “write” can take on many forms; a web site posting, a blog, a newsletter, a podcast, an email, a webinar, or even a phone call.  The goal is to be visible and timely.  The communication does not have to be elaborate or only occur when some major event takes place.  Instead, simple regular “heartbeat” communications that investors become accustomed to receiving are more effective in building a reputation for openness.  To be effective, the communications needs to be objective and informative.  These communications should not be viewed as an opportunity to sell or hype the company.  The goal is to establish the practice of communicating in a factual, objective reference manner.

A classic mistake that many companies make is to wait until they feel that they have “enough” information to justify sending out a “meaningful” communication.  The acceptance of blogs and other “bite-sized” communications have changed the need for lengthy communications.  In fact, most people simply ignore long or time-consuming content (hence the creation of hundreds of one or two page articles in this collection that can be consumed individually).

Not only must the heartbeat communications need to be brief, but they need to be written in such a way that the recipients can quickly understand them so they can easily inform others who may not directly be familiar with the content.  Essentially, fill the empty spaces so that you can “load the lips” of the recipients so they can repeat the message that you want them to understand and share. 

Article Number : 2.040202   

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