More than 4,000 jobs were lost over the last two weeks in Belgium. That is the sad tally of a series of announcements since 01 September that has seen eleven multinationals announce job losses, the end of operations, or file for bankruptcy in Belgium. The decision to restructure is neither easy nor taken lightly, and is usually the result of months of reflection and discussion. As the announcements of the past two weeks have testified, the drivers of restructuring are multiple, including decreased demand, stagnating interest rates, and disruption due to digitisation. Manufacturing, insurance, retail, energy and consumer-goods sectors have all been impacted by this wave of restructurings.
The diversity of drivers and sectors affected suggests that no company is immune. For multinationals, closing or reducing activities in a given market has to be done and communicated in the right way. This is important not only in terms of protecting the business’s reputation and remaining activities in the affected market, but also further afield in other markets internationally in which the company operates.
Decision makers often dread being the bearers of bad news and the temptation to try to get done with it quickly can be great. This can lead to perfunctory communications or indeed creating a communications vacuum that is then filled by speculation by the affected employees, suppliers or politicians. The past couple of weeks in Belgium have witnessed both best- and worst-case examples of how companies manage and communicate the restructuring process. Where communication was open and engaged, the Belgian media framed the news more sympathetically and was less in sensational in its coverage. Where the restructuring decision was communicated less empathetically, employees and government officials alike were angered, which the media picked up on with gusto, and which could have potential further negative reputational consequences for the company involved.
Effective crisis communications preparation and execution will not allow companies to avoid tough restructuring decisions, but it will help them in their engagement with employees, suppliers, the media and regulators. In times of crisis and economic upheaval, explaining what is going on and why is critical. Companies must integrate sophisticated, planned and targeted communications into the restructuring planning so that different stakeholder groups are adequately and properly informed of the decisions, their reasons and effects. As the examples from Belgium in the past fortnight have shown, when it comes to restructuring, effective communications planning can make or break a company’s reputation.
Michael Cloots is Senior Consultant and George Candon is Senior Director at FTI Consulting. For further details on FTI Consulting’s crisis communications services, please contact George on email@example.com or on +32 289 09 55.