Wow. What a week.
I’m sure most of you reading this are in and around startups and already know what I’m referring to. But if not, the most popular bank for startups and VCs called Silicon Valley Bank just went under. They are still getting a final count on what percentage of deposits are not insured, but I’ve seen 97% being floated around. That’s a lot of money potentially gone.
But we’re all tired of hearing about what we think happened or whether a buyer will come along. The much more important thing to talk about is what to do in a crisis situation.
Over-communicate. And then communicate some more.
One of the biggest mistakes I see organizations make during a crisis is their failure to communicate swiftly and with poise. Often organizations want to find all the facts and think about the right words to say. They want to focus on solving the problem.
Unfortunately, this is a big mistake. And it’s a mistake that happens all the time — such as in this crisis with SVB or during COVID or when employee allegations about abuse or harassment emerge, etc. Companies make this mistake over and over again — both big and small companies.
It is important to own your communications and use them to get ahead of a situation that is spiraling downwards. In fact, this is so critical that I’ve spent the last 2 days drafting communications for many of our portfolio companies in figuring out what to tell their investors, business partners, and/or employees yesterday.
It’s not so much about what the comms actually say but how they make people feel. The feeling you want to convey is 1) You got this under control – leadership is on it and ppl can count on you, 2) if you don’t have all the answers, you will get info and will keep people informed as you go along, 3) your door is always open to chat.
If this isn’t done swiftly, even if you are actively working on a solution to a crisis, people will lose faith in you, because they are unaware of the steps you are taking. As such, it is much more important to communicate something — anything — quickly and update your comms as you go along than to try to write the perfect thing 4 days later. The best time to do this is in the first 24 hours of a situation emerging.
So, in this situation, if you haven’t already sent out communications to your employees and investors, I’d highly recommend doing that today. It can be short and sweet:
For investors:
- You may have heard about SVB (link)
- We were/weren’t affected and to what extent
- If affected, we are still trying to learn X and will keep you informed
- Thank you for your support always
For employees:
- You may have heard about SVB (link)
- We were/weren’t affected and to what extent
- 1 line about payroll – i.e. rest assured, we are actively looking at loan options to make this work (if with SVB) / or we were not affected
- Business is as usual
- If you have questions / concerns, my door is always open
As the CEO or head of your org, your job is leadership. This means that communication and morale is your #1 responsibility. I often see CEOs think they are too busy to address the communications during a crisis mode. They are too busy trying to solve the problem. But communications is everything.
In addition, during a crisis, you’ll often see people go above and beyond. It could be from within your company but it may also be through external partners. In a crisis, there are people helping all the time. This is the time to thank them and make them feel extra appreciated.
Over the years, we’ve done this a few ways: we’ve sent food (treats from a grocery store, meals from Doordash, and gift cards to restaurants). We’ve sent alcohol and ridiculous stuffed animals and stupid stuff to make people laugh. It’s just a way to show appreciation and thank people.
Ultimately, your communications with everyone is about saying “I see / hear you. I’m on this situation. I appreciate you.” That is leadership.
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