3 Critical Comms Lessons from Silicon Valley Bank’s Collapse

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Silicon Valley Bank’s rapid demise offers critical communications lessons that apply to far more common situations. Companies spend years building their business, brand and reputation and it can all crumble overnight. And while foundationally, no amount of public relations can uphold a business that is not solid, poor communications (or silence) can cause panic, misunderstandings, runaway speculation, and damage your company's reputation.?

CEOs and CMOs can already draw several lessons from the still-unfolding SVB story. We’ll address what went wrong and what steps companies can take to minimize similar outcomes. And, since SVB’s downfall has a ripple effect on the tech community, we’ll also share thoughts on whether, when, and how tech companies should communicate to their employees and customers about the SVB situation.

When Attempts at Reassurance Net Panic

While companies cannot control how the media writes about them, they can fully control the content of press releases. They can also control the content of a CEO’s public statements.?

It’s quickly become clear that a press release issued by SVB last Wednesday was so opaque and confusing that it left too much to the imagination… and people filled in the gaps with major concern. As Axios writer Eleanor Hawkins put it, they “spooked investors and depositors.” To make matters worse, on a call meant to calm VCs and founders, SVB’s CEO is quoted as saying, ““My ask is to stay calm because that’s what is important. “We have been long-term supporters of you — the last thing we need you to do is panic.”?

As TechCrunch’s Connie Loizos concluded, the bank “utterly flubbed some important messaging at the very worst time imaginable.” We would add that it also failed to consider the way these messages would be received by its target audience.

Let’s start with the press release.?

Issuing a press release in a timely manner is critical (and in highly regulated industries often obligatory) but while you need to act quickly, you also need to take the time to clearly map out information and do so in layman’s terms. Avoid confusing terminology as this will be interpreted as evasive and people will read what they want between the lines. And if for any reason, a densely worded press release is necessary, consider accompanying it with a blog post, email and accompanying social media posts from the CEO that explain the matter clearly in layman’s terms. In the case of crises, turning to old school comms methods could also help - literally picking up the phone and calling the biggest stakeholders and most influential industry analysts and advisors.?

Once the panic in the tech community became evident, SVB’s CEO did hold a call. The problem was that he didn’t allow for questions and he appealed to people’s sense of loyalty to the bank, when in reality, VCs and CEOs have to first protect their companies, employees, and customers. So asking people to stay calm and remember that “we have been long-term supporters of you,” makes it sound like SVB wanted a favor. In this situation, it’s critical to provide reassurance that steps are being taken as you speak to mitigate the situation, along with details on what those key steps are. Answering questions is also a must. When you say, “No comment,” there’s an implication that you are hiding something. When you tell people not to panic, they need to hear why. What are the exact measures you are taking? How are you going to keep the ship afloat? If you don’t provide details, answers and a plan, you are basically saying, “Trust me.”?

Clear concise messaging is important for all forms of company communications - not just for times of crisis. Don’t limit yourself to thinking what you want your audience to know. Think also how they might interpret the information or become confused by it. In a crisis situation, a poorly worded press release can be disastrous. On a day to day basis, the results might be less dramatic but still damaging. You might miss the mark with your target audience if they are left scratching their heads after reading your news. And reporters might choose not to cover your announcement if the release is uninteresting, vague, or full of technical and bureaucratic jargon.?

Next Steps for Tech Companies

Many tech companies were left wondering how to handle their own messaging around the SVB implosion. The situation has been fluid and information was initially limited, which makes communicating difficult. Think back to the outbreak of the pandemic or the supply chain shortages of the past years. The SVB collapse is another situation where your employees and customers are left wondering about the potential impact to your business (and their job or their ability to access your product/solution).?

Start by alerting your PR team. You’d be surprised but sometimes executives think they should bring in the PR team later in the game. That’s a mistake.

Next, understand who the stakeholders are. Who might worry about the situation? What are their potential concerns and questions? Determine whether it’s best to email certain stakeholders directly, call, or put out a general announcement or post on social media.?

Your messaging goal should be to demonstrate leadership and exude reassurance and responsibility.? You might not have enough information at your disposal at the outset to provide definitive answers. But you can issue initial statements letting your community of customers and employees know that you are investigating and prioritizing and will share details as soon as they are available. Acknowledge that the situation is unfolding and is fluid and assure them that you are monitoring it closely.?

Once you have more details, provide an update and share steps you have already taken and steps you will be taking next. If your company does not hold funds at SVB, you might still want to let customers know to reassure them that, as far as you can tell, you do not have material exposure. If your company does bank with SVB, you are now able to reassure employees and customers that the government announced that depositors will have access to their money. It’s important to convey calm and confidence. Difficult situations are where true leaders shine so your messaging should avoid panic (and you should avoid panicking yourself!) Make sure to provide an email and phone number in case anyone has further concerns and encourage your customers and employees to come to you with questions.?

Provide a human contact that they can connect with. Be it the CEO or someone else.

While the SVB situation is unusually dramatic, companies face opportunities every day to communicate effectively with their community. If done well, a brand’s reputation grows. If done poorly, it can lead to loss of customers, revenue, employees, and more.? Sometimes it takes an explosive situation to remind us of the importance of proper communications.

Discover additional insights on our blog.