Private Company PR vs. PR for a Public Company
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 major league game. With a public company, the stage is brighter, the stakes are higher, and the room for mistakes is smaller than a competitive 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.
Private Company PR Example – Google Before its IPO
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).
Public Relations for a Public Company
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.
Public Relations Changes When Companies Go Public
– 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.
– You must be responsive to journalists
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. “The company did not respond to our request for comment” is not usually a phrase you want to hear in a news story about your company.
– 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.
PR Strategies for Public Companies
We recommend that management and the public relations staff for any public entity adopt several key strategies and best practices:
Understand regulatory requirements:
Familiarize yourselves with the legal and regulatory requirements of a public company, particularly around communication. This includes understanding the rules for financial reporting, material information disclosure, and quiet periods.
Develop a comprehensive IR (Investor Relations) plan:
Establish a robust investor relations (IR) plan that includes regular updates to investors, earnings calls, annual reports, and shareholder meetings. Ensure that this plan aligns with your overall PR strategy.
Train spokespersons:
Train key executives and spokespersons on how to communicate with the media, investors, and the public. This should include messaging on the company’s vision, strategy, and financial health, as well as training on how to handle tough questions and crisis situations. Some executives may want to opt out of that responsibility and let company spokespersons take their place – they need the training anyway, as a single comment by them can have huge repercussions.
Enhance transparency:
Work towards greater transparency in all communications. Be clear, honest, and consistent in your messaging, especially regarding financial performance and business strategies.
Strengthen media relations:
Build strong relationships with individual financial journalists and industry analysts. These relationships will be key in getting fair coverage and in managing the narrative around your company.
Prepare for increased scrutiny:
Be ready to handle increased scrutiny from the media, investors, and the public. Develop a rapid response mechanism to address misinformation, rumors, or negative press efficiently.
Focus on crisis management preparedness:
Develop or refine your crisis management plan. Ensure that it includes scenarios such as stock price volatility, shareholder lawsuits, or regulatory scrutiny.
Align internal and external messaging:
Make sure your internal communication is in sync with what is being communicated externally. Employees should hear about important developments from the company first, not through external sources and the communications they receive must be consistent with what is given to the public.
Emphasize Corporate Social Responsibility (CSR):
Highlight your company’s commitment to CSR and ESG (Environmental, Social, and Governance) practices. Investors and the public increasingly value companies that demonstrate social responsibility.
Leverage digital platforms:
Utilize your website, social media, and other digital platforms to communicate with stakeholders. These platforms can be effective tools for disseminating information, showcasing company culture, and engaging with different audiences.
Use PR distribution tools:
Tools such as PR Newswires and Press Release Distribution Services are even more important for getting the word out than when you were private.
Monitor and analyze feedback:
Regularly monitor media coverage, investor feedback, and public sentiment. Use this information to adjust your PR strategies as needed.
Educate employees:
Educate your employees about what it means to be a public company. This includes the implications and regulations for stock trading, confidentiality, and how they represent the company externally.
Long-term reputation management:
Focus on building and maintaining a strong corporate reputation over the long term. This involves consistent and strategic communication efforts aligned with the company’s values and objectives.
Regularly review and update strategies:
The market and regulatory environment are dynamic. Regularly review and update your PR and IR strategies to ensure they remain effective and compliant.
Remember, the transition to a public company is a significant milestone. Effective communication and PR strategies are crucial in navigating this change successfully and in establishing trust and credibility with your new set of stakeholders.
This article, originally written by Ben Silverman, appeared in PR Fuel (https://www.ereleases.com/prfuel), a free weekly newsletter from eReleases (https://www.ereleases.com), the online leader in affordable press release distribution. To subscribe to PR Fuel, visit: https://www.ereleases.com/prfuel/subscribe/.