The holidays normally don’t bring in a whole lot of news, but this most recent one was an exception. It provided a great Crisis PR case study as a result.
Unexplainably, the Treasury Department put out a press release the Saturday before the Christmas holiday saying that Secretary Steve Mnuchin talked to several large bank CEOs, who told him that they have enough cash to ride out any unexpected shortfalls related to the government shutdown.
The problem was there really wasn’t any indication that banks were stressed and that the economy, short of the government shutdown, was in any era immediate danger of falling off the rails. So what he really did was send the market on Monday into a panic that had one of the most single biggest drops in U.S. history, and culminated the worst December on record since the Great Depression for stocks.
Crisis PR is always a balancing act between wanting to get in front of a story and be as transparent as possible, showing empathy and action, and another for creating unnecessary panic to your intended audiences. Now, had the Treasury Secretary seen something the rest of us hadn’t, it might have been wise to certainly create a plan and be prepared to respond very quickly, but not necessarily be proactive in this one. And the stock market volatility that occurred between Christmas and the end of the year was enough to give even the most senior investors whiplash.
CEOs should always be prepared for a Crisis PR situation to occur and how they’re going to respond to traditional media, influential bloggers, customers, partners, shareholders, and employees, but oftentimes you don’t necessarily need to do it on a proactive level, certainly not right away. Get seasoned counsel to help you identify what the current situation is, what the risks are involved and create a plan accordingly. The recent Treasury department PR fiasco is a great example because I am sure, willing to bet a paycheck even, that Secretary Mnuchin would want that day back.