The difference between doing public relations for a private company and a handling PR for public company is the difference between watching your kid’s little league team and then taking a Barry Bonds major league game. With a public company, the stage is brighter, the stakes are higher, and the room for mistakes is smaller than a Romanian gymnast. If you try to use the same public relations strategy for public company that you used for a private company, you’re going to find yourself in big trouble.
Before Google filed for its initial public offering in the spring of 2004, the company’s PR department had done an admirable job. It has always been obvious that Google would rather let actions speak louder than words and let consumers act as their marketing department. While the company conducted public relations like it was a necessary evil, it did so with grace and style.
My dealings with Google ‘s public relations team was always pleasant and I learned early on not to expect much in the way of information. I respected this mostly because the company was privately-held and it was their responsibility to meet the demands of their small circle of shareholders, their employees, and their customers (who never seemed to complain about anything). After the IPO, Google suddenly had many, many new shareholders demanding information that was previously kept under wraps. And that meant the PR department had to loosen its tongue.
When you’re a public company, you simply cannot keep your mouth shut. The number of reporters covering your company instantly expands to include financial journalists (as opposed to just tech journalists or general business journalists) who must cover your quarterly reports and conference calls, dissect every press release looking for financially impactful information, and try to find a story that’s going to make your stock move (yes, regardless of what direction your stock moves, if a journalist moves it, they take great pride in it). And wait until the PR department starts fielding phone calls from shareholders. Yeesh! There’s a reason people in most Investor Relations departments don’t pick up the phone.
To gauge the impact of Google’s IPO on the company’s PR team, I spoke this week with the head PR person for a tech company that has been public for about five years. The PR person has been with the company for almost a decade and help shepherd it into the public arena. This person, who asked not to be identified, offered some suggestions for Google’s PR team and PR people who have to deal with going from representing a privately-held company to a public company. Together, we came up with the following suggestions:
– The stakes are always higher because what you say to the media could impact the stock price. If you’re overly positive, you could send the stock higher and thus bring additional scrutiny from naysayers. If you’re overly negative, you could depress the stock price and have angry shareholders asking for your head. It is imperative that you watch what you say because the last thing you need is a Securities and Exchange Commission investigation into your company brought on because of something that came out of your mouth.
– Journalists are more difficult to deal with because now they know how well or poorly your company is faring. When your company was private, all the financial information available to journalists was what you gave them. But now, it’s out there for all to see and that means an entirely new level of scrutiny.
– You’ll be expected to say more than usual and not rely on a chain of command to feed information to the media. Privately-held companies often offer up executives for even the smallest story in the smallest publication because the company usually needs the exposure. Executives at publicly-held companies have restraints that prohibit them from talking about certain subjects – sometimes at certain times. Once your company is public, you’re going to find yourself being quoted a lot more and this means you better know how to be quoted.
– Lawyers. Get to know your lawyers real well. And get to know your investor relations people, the folks in charge of communicating with shareholders and analysts. You will be talking to both of these types a lot.
– Everything you say or do will be watched for “tells.” Investors, both individual and institutional, are like hawks. They pick apart press releases, statements in the media and conference call transcripts looking for some indication that will help them decide how to invest (or not invest) in your company. A poor choice of words in a press release or an offhand comment on a conference call can have serious ramifications.
– Remember the days when you could wait to return a journalist’s call? Don’t do it anymore. With the stakes higher, you need to know exactly what’s being written about your company before it hits the newspaper/website/airwaves. When you were private, damage control on a negative story was easy – you just had to worry about your workforce and customers. Now, you have to worry about making Wall Street and investors happy.
– Take professionalism seriously. When I wrote for a newspaper, I rarely commented on anyone but company executives. It was only their behavior I was most interested in. But now I write for an investment service where my audience wants to know what type of people make up an organization. More than once I’ve written negatively about companies because I was unimpressed by their management team or, yes, their PR people. After all, if I’m interested in a company’s stock and the PR people can’t tell me something basic, how much faith should I have in their management team or the company as a whole? Once again, this speaks to the new level or scrutiny that your company is subjected to. You’re going to have bigger, better and smarter people writing about your company now and their job is to find out information you don’t want them to know.
The PR people at Google, I have no doubt, are well aware of the challenges they face in going from a privately-held company to a publicly-held company. Up until a few months ago, I had faith that the company could handle these challenges without much fanfare or problems. But in light of recent events, I’m more skeptical about how the company conducts itself with the media and public at-large. Perhaps Google was just too perfect for its own good. We’ll find out soon enough.
This article, written by Ben Silverman, originally appeared in PR Fuel (http://www.ereleases.com/prfuel), a free weekly newsletter from eReleases (http://www.ereleases.com), the online leader in affordable press release distribution. To subscribe to PR Fuel, visit: http://www.ereleases.com/prfuel/subscribe/.