In financial public relations and investor relations services, there’s what you could call the bandage approach to bad news. One of the most fundamental laws of the universe can be simply stated as, “What goes up, must come down.” Or, put even more simply, stuff happens. And when said stuff hits the fan, and it will, most investor relations consulting firms suggest doling out the bad news all in one go. In short, rather than trying to soften the bad news with a controlled drip of information, simply give all the bad news at the same time. Otherwise you could end up in a Hilary Clinton Email-gate type of situation.
What does that mean, and what does Hilary Clinton have to do with investor relations services?
The presumed Democratic nominee for the 2016 presidential race recently got tangled in a scandal over her use of a private email server during her years as Secretary of State. And because of the sensitive nature of the former Madame Secretary’s emails, the Justice Department is releasing her emails slowly over a period of months. As a result, the scandal has proven to have incredible staying power. Every few weeks, another batch of emails is released, and the scandal shows no sign of disappearing from the news cycle. And unfortunately for Clinton, her poll numbers have been taking major hits as a result.
When you try and minimize bad news by communicating it over an extended period of time, you just end up prolonging the inevitable fallout. That means the bad news will be in the news longer. What’s more, the sooner all the information about the screw up, gaffe, crash, disaster, or (insert catastrophe here) is released, the sooner you can get into damage control mode.
But remember: this doesn’t mean you should rush to release information before you’re ready. If you’re releasing all your bad news at once, you’ll only have one chance to get your shareholder communication services strategy right the first time. But in the investor relations industry, the bandage approach is often the right one.