|Eric Lebson and Ian Christopher McCaleb authored this piece.|
“Fools rush in”: a cliché, trite, overused truism that anyone involved in all sorts of complicated, high-risk, high-reward business transactions must mull over before plowing ahead into a situation that may generate substantial, sustained income. Corporations, well meaning but highly ambitious individuals, and even charities or philanthropic ventures looking to boost their coffers for aid and assistance efforts, should be wary of moving into anything too quickly.
No one beginning a transaction or business relationship — no matter their motivation — wants to think of himself or herself as the fool. That label arrives later, involuntarily and unfortunately, when bloggers, analysts and journalists learn of a relationship failing miserably or souring, or when a profitmaking venture exudes a criminal taint of some sort.
At the American Bar Association’s White Collar Crime Conference in San Diego last week, some of the biggest law firms in the Western world — as well as government officials whose charge it is to bring high-yield prosecutions — presciently warned attendees about maintaining one’s reputation in the midst of a legal action or any other shade of crisis.
“Companies should be wary of their reputations,” was heard time and again in the conference’s breakout sessions. No matter their criminal specialty, attorneys and government prosecutors alike urged corporations in particular to plan and strategize for the moment a prosecutorial spotlight shines on them. They should be thinking about self-reporting as well as their own internal investigations and disciplinary actions. They need to condition their employees for cooperation and compliance and plan for a media storm that will surely follow once wrongdoing is uncovered.
No venture, no matter its scope or money-generating potential, should be entered without thorough investigation and consideration. And no such venture should be maintained without drafting and executing a full-scale communications protocol that explains the ethos behind the profit-making — for internal and external audiences alike — and sets conditions and responses for the possibility that the whole thing could turn bad with a moment’s notice.
Indeed, the most effective course of action for anyone thinking about a high-risk, high-reward venture is to engage in both processes at the same time.
Due diligence feeds crisis avoidance and crisis response
Foreign partnerships, new investments, new markets and even the emergence of new products and services can all lead to great return if properly planned.
Some questions that must be asked: how is one certain that they know all that should be known about the people or organizations with whom they are contracting or aligning? How thoroughly can someone research the regulatory, legal, social, political and security landscape of a newly entered region or country? And what of the new investment or business venture itself? Is it being managed appropriately and lawfully? Are you aware of all potential legal and reporting issues associated with your work? Are you up-to-date on the statutes that directly govern your business sector?
Due diligence, financial monitoring and several varieties of analytics, as well as thorough background investigations and ground-level data collection — all conducted by an independent and dispassionate third party investigative team — can arm any organization for the road ahead, even if that road doesn’t appear to be fraught with the peril that accompanies the outset of a new venture or operation.
These intertwined investigative disciplines can reveal problems waiting to occur, or they can effectively discredit or unmask bad actors with whom you already may have begun to interact.
Perhaps more importantly: they will all give you reputational cover, and a self-revealing roadmap to recovery, in the event of a catastrophe such as prosecution, a product failure, a melted-down investment or the actions of a seen or unseen adversary.
The end results of these investigations can be leveraged to inform the work of your dedicated communications team as they formulate back-pocket strategies for crisis mitigation and management, general communications, financial communications and the soothing and long-term buy-in of internal and external stakeholders.
An easily referenced, deeply detailed and informed communications strategy — all of which is set in place and fueled by the investigative processes described here — will answer the concerns aptly voiced by attorneys and prosecutors at the ABA conference in San Diego earlier this month. Their lamentations didn’t come from just anywhere: they are all, especially on the litigator side, finding themselves defending companies and individuals who are not the least bit prepared to defend themselves in public. These attorneys know that their job gets that much harder if there is no concurrent public defense effort.
Take their advice. Start your defensive communications and investigative efforts before you launch your next big profit-seeking exercise. You may find yourself extending your startup timeline just a bit longer, but the yield in piece of mind —and a newfound ability to react immediately should a crisis break — could be the difference in survival of your most cherished processes, operations or partnerships.
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Ian Christopher McCaleb and Eric Lebson are Business Intelligence practitioners at Levick. They work closely with some companies to help them avoid conflict and with others to help them navigate crisis when it occurs.