How to Communicate with Stakeholders Essay
How to Communicate with Stakeholders
Discuss each image crisis for Barclays. – Image crisis no. 1: ‘A world needs a big bank’ campaign vs. closing 170 branches in the UK. In 2000 Barclays launched a ‘Big’ campaign with the slogan: ‘a big world needs a big bank’. Barclays wanted to be seen as an ‘big’ bank by its important stakeholder groups. The adverts were slick and had received good pre-publicity, but it turned into a communication disaster. Because Barclays was spreading the word that is was a big bank, while closing 170 branches in the UK. Barclays started to lose more reputation when it was revealed that the new Chief Executive had been paid £1.3 million for just 3 months’ work. The situation was further aggravated by the arrogance with which Barclays announced and justified the decision of closing all the branches in the rural areas. – Image crisis no. 2: ‘‘Children; do not pile up debts on your credit cards.’’ Another image crisis occurred in 2003 when the CEO of Barclays, Matthew Barret, said that he did not borrow on credit cards because they were too expensive and that he has advised his four children not to pile up debts on their credit cards. Since Barclays is the biggest credit card company of the UK, the CEO stunned his customers with what appeared to be a similar vote of no confidence in his own product. – Image crisis no. 3: ‘‘Excessive risk taking’’ In 2008, at the height of the global financial crisis, a third image occurred. Many banks turned to the government for cash injections. Barclays, however, raised billions from investors in Qatar and Abu Dhabi. The reason for this was that it would allow the bank to retain ‘complete control’ over running their business, like paying the bonuses to its top executives and investment bankers. Although some financial analysts thought it was a good move, Barclays was heavily criticised in the media for its excessive risk taking and for the remuneration packages given to its top executives and investment bankers.
2. What was the exact cause or event that led to each of these crises?
Barclays did not succeed in integrated communication. The bank did not coordinate and align all communications so that the organisation speaks consistently across different audiences and media. For example: the corporate identity did not match with the things Matthew Barret told the public. Besides that, Barclays has the following value stated on their website: ‘‘Build trust with the colleagues and partners we work with’’, this value is in contrast with closing 170 branches without any dialogue with their stakeholder. Besides that the company did not show regret for closing all those branches, instead they played a very defensive role. By showing such an arrogant attitude and lack of remorse Barclays created anger within the public. The timing of the campaign was very unfortunate. If the campaign and the announcement of the closing of the branches did not happen at or around the same time, the campaign could have been very successful. Since it received very good pre-publicity. Matthew Barret did not realise that the media is a big stakeholder of the organisation. Anything that a corporate executive says in public can be held against him and can have a huge impact on the reputation of the company. The decision not to ask the government for cash injections became an image crisis because not only did they take an excessive risk, they wanted to continue with the enormous bonuses. The public probably felt Barclays had the best interest for their shareholders, not for their stakeholders.
3. What could Barclays have done to avoid these crises, or to anticipate the potential fallout? Barclays clearly did not manage very well with their communication under crisis. Because crises have the potential to Barclays Bank: how (not) to communicate with stakeholders
damage an organisation’s reputation it is important that organisations anticipate and plan for probable crisis scenarios and prepare crisis communication plans. Instead of getting in the defensive mode as Barclays did with image crisis no. 1, they should have started an acceptance strategy. A tactic of apologising for the crisis and accepting the blame. Instead of being arrogant, they could have said that they are sorry for closing 170 branches and give an explanation. Barclays also should have started a dialogue. They should have announced what they were going to do
and why and then let the public react on their announcement. And to create less anger within the public they could have announced some form of compensation or help to the employees who were going to be harmed by the closing of the branches. The CEO of Barclays should have had a media training. In media trainings is thought how to work with journalists by creating simulations. If he would have known how to behave and what to say around media, the second crisis would not have happened. A third image crisis would have happened anyway, because if they had chosen to get a cash injection of the government the public would also have been angry. Because they pay such excessive bonuses, it is not fair to ask they government and thus the taxpayers for an cash injection because they are short on money. They could have limited the image crisis by explaining the public the positive aspects of the fact they chose investors for money and not the government. Overall, Barclays should have an more open attitude to the public with room for dialogue. And not such an arrogant attitude.