Nine points on the banking crisis from the perspective of crisis communication

The events surrounding the demise of Credit Suisse are reminiscent of the grounding of Swissair. An internationally known Swiss company suddenly no longer exists. The situation, in turn, affects many: "We are sorry for all employees who have to fear for their jobs because of the demise of Credit Suisse," explains Markus Baumgartner, President of the Swiss Association for Crisis Communication (VKK). The association has developed nine points on the Swiss banking crisis from the perspective of crisis communication.

1. crisis communication needs trust

The many scandals of recent years have increasingly destroyed the reputation of Credit Suisse. Even though the two captains CEO Ulrich Körner and VRP Axel Lehmann were ultimately credited with the turnaround of Credit Suisse, they were unable to free the bank from the dark shadow of the past. Both are undoubtedly qualified managers, but they failed to build up or create new trust through a lack of adequate communication.

2. crisis communication needs good communication consulting

It is not always easy for communications people to assert themselves vis-à-vis the board of directors or management. Because time and again, executives show themselves to be "resistant to advice" and simply do their thing. This is despite the fact that they have highly qualified internal or sometimes external communications consultants. When it comes to communication, many suddenly have the feeling that they are experts in this area as well. Particularly in crisis communications, it's all about facts so that speculation doesn't arise, but - as here at Credit Suisse - it's not just about bare figures, but about emotions and understanding, and often also about the view from the outside when you yourself are only spinning in the hamster wheel.

3. crisis communication needs trustworthy and empathic minds

The importance of this crisis communication principle, and the fact that success or failure depends on it, can be seen in the various exponents of the current situation. Federal Councillor Karin Keller-Sutter has not had an easy time conveying credibility right away in the short time since she took over the Finance Department. What's more, her predecessor Ueli Maurer had said that Credit Suisse could turn itself around. Her personal example as a Credit Suisse client was insensitive. The vast majority of employees do not have the financial security of a member of the national government. At Credit Suisse, the heads of CEO Ulrich Körner and VRP Axel Lehmann are too little known through their own fault. In addition to their work "in the background," they have failed to build trust with the outside world and to convince clients that they are on the right track. This takes time and does not happen overnight. And Finma President Marlene Amstad was hardly able to raise her profile in the run-up to the crisis.

4. crisis communication needs empathy and emotions

That is rather difficult in the financial industry, but certainly not impossible. Axel Lehmann's performance was technocratic and showed a lack of self-criticism. Just now, the demise of one of the landmarks of the Swiss economy was communicated, and he, as Chairman of the Board of Directors, could not bring himself to apologize. From a legal point of view, it is understandable that he does not admit guilt, but at least at this moment he should think of his employees and customers whose jobs and money he has destroyed. At this moment, it is no longer just billions that count, but above all people. In addition, the question obviously arises as to who wrote the words "I am convinced that the new solution will bring sustainable stability and security for employees" on his paper. This statement shows that he has hardly reflected on it. The same applies to the announcement that all employees would devote all their energy to the process of merging with UBS. When so many jobs will be lost, such a statement is unworldly or simply ridiculous.

5. crisis communication needs preparation

A crisis never adheres to a regulated procedure or process. Many unprepared tasks come at the responsible parties from all sides and are difficult to coordinate. Companies therefore do well to prepare for possible crises with texts, dark sites or checklists - always in the hope that they will never need these documents and channels. Because everyone must be aware that crisis communication has long since ceased to be an episodic task and has become a permanent one. It is to be hoped, for example, that the last-minute, "personal" invitation to an information call from the Credit Suisse management team (only 10 days after the bang), which was sent out quite impersonally with only "Dear Customer" in the salutation - without names (!) - was not the first contact with the "valued" customers. All addressees may rightly ask themselves whether they are only known by name when it comes to profit and they become a neuter in the crisis.

6. crisis management needs credible sponsors

Credit Suisse's short-lived Chairman of the Board, António Mota de Sousa Horta-Osório, promised to introduce a new code of conduct, but failed to stick to it himself. This made it even more difficult for employees to believe in their leadership. And accordingly, the culture of insatiable risk-taking remained. 

7. after the crisis is before the crisis

The scandals at CS and other banks around the world show time and again that too little, if anything, is learned from crises. It is not enough to analyze past mistakes and name the guilty parties. It is crucial to really want to learn something from the misconduct, so that at least we do not put our foot in our mouth again and again. In plain language, this means that crises must not only be dealt with, but also anticipated. This requires a well-established and implemented issue management. It is also important to play out possible future crisis scenarios live and not just in theory. Internal processes and people are not enough. What is needed is a view from the outside that provides an unvarnished reflection of the situation without regard for one's own career - and tells in plain language what needs to be changed. It is not for nothing that those affected by a crisis often perceive the event as a "surprise," while third parties saw it coming long ago.

8. crisis prevention thanks to good corporate culture

We don't want to go into further detail about corporate culture. But a trusting, honest, open corporate culture may not prevent every crisis, but it is one of the best crisis prevention measures. And here, too, it often helps to call on external help, because the view from outside is often worth its weight in gold.

9. bonuses need sustainable criteria thinking

Finally, a word from ethicist Prof. Dr. theol. Peter G. Kirchschläger on the incentives provided by Credit Suisse's bonus culture: "It is worth considering linking bonuses not only to economic criteria, but also to social and sustainability standards. This is in order to honor and reward ethical and responsible decision-making and action. It is almost schizophrenic when a company uses elaborate communication and advertising measures to constantly emphasize how important sustainability and climate protection are to them. And it also publicizes this in glossy brochures. At the same time, ethical criteria apparently play no role whatsoever in bonuses."

Source: VKK