I often feel a sense of kinship with investor relations and communications professionals who are well-versed in crisis communications.  We share an understanding of the pressures, stresses and urgencies experienced.  Another commonality is we often journal about our experience.  From simple timelines to full case-studies, journaling (even if done after the fact) stimulates the reflection critical to making sense of the situation, your role in it and lessons learned.  Such reflection is important to honing one’s leadership skills.

I’ve certainly experienced my share of crisis.  My journal has served as a resource for many of the stories and advice shared via these blog posts.  For one crisis – about a failed capital refurbishment project – I later converted my journal entry into verse, which I’m sharing below.  This story is available, along with many other case studies, on NIRI-Chicago’s website in a traditional case study format.


On the shores of a sweet-water sea,
Stood a fire-breathing furnace – the biggest in the west.
It produced materials that built our cities and industries,
Voraciously consuming fuel day and night without rest.

But the fire-breathing furnace worried about the air,
And the quality and efficiency of the fuel it burned.
With our engineers in the green mountains fair,
Our customer found a cleaner technology in which to turn.

Eager that its new technology should grow,
And the ability to meet EPA standards demonstrably show,
Our engineers designed an innovative new facility
To provide the furnace fuel and generate electricity.

The construction contractor was anxious and had much to prove.
To lay the foundation, they tried something new, guaranteeing it wouldn’t move.
But our engineers pointed to their plans,
And warned the foundation might not stand.

The new facility began to settle – the engineers were right.
Yet the company waited fifteen years to begin to fight.
We can fix this and make it better” said the new boss,
And we will no longer tolerate it operating at a loss.

An $85 million refurbishment effort was begun.
We repaired, rebuilt and replaced – the process was no fun.
Nevertheless, we were hopeful,
And often talked about the EBITDA potential.

But two years later and $40 million over plan, the facility was still in a poor state,
The COO’s head was put on a plate.
This announcement was two weeks before quarter end,
So, a reinvigorated focus on operations was the message we decided to send.

Now faced with another earnings miss and the prospect of more of the same,
Only transparency could help save the company’s name.
Two weeks early earnings were announced,
Down nearly 20%, our stock price was trounced.

The facility was better we pleaded,
And a new test underway just might be the cure.
But we didn’t estimate the capital needed,
As we needed to see if the test worked for sure.

Post-earnings the IRO and CEO went on the road,
And spent even more time on the phone.
Before and after facility photos we showed,
But shock and anger was our investors’ tone.

Our news came at the worst of times.
Not a shred of good news could we find,
Our customers were teetering and closing plant gates,
While shareholder wealth continued to deteriorate.

It wasn’t long before we heard from the sharks,
A seat on the board was their mark.
Negotiations then ensued,
The number of activists added to the board was two.

The board decided to pursue a new direction,
And we laid out a new plan of action.
Refurbishment of the facility would continue,
But the search for strategic alternatives was on the menu.

However, in this industry there are no quick fixes,
Solutions that require perseverance are what sticks.
A few years later the stability for which we all yearned,
Was in place and business results finally began to turn.


Lisa Ciota
Lead-IR Advisors, Inc.

Wake Up Call

It began like any other day … walking into the office, cup of hot tea in hand.  The place was quiet as staff began to roll in. I had checked the news headlines before leaving home, so it looked to be an ordinary day.  But then, minutes before market open, my phones lit up and email caught fire.

Dumbfounded, I listened to the first of several messages. One of my company’s major customers had issued a press release announcing its intent to temporarily idle a facility where we were co-located.  This customer represented more than 10% of my company’s business and 100% of the co-located plant’s output.

I popped up and peered around the corner, the CEO wasn’t in yet, but I caught a glimpse the COO as he walked in the door.  Off I go to download what’s happening to the COO and on my way, I asked my communications manager to call the affected plant to see what he could learn.  No one knew – not the CEO, not the COO, not the local plant manager.  The customer gave us no advance warning.

I sat in the office with the COO as he called the customer, who reassured they would continue to honor our contract, including inventorying or shipping to alternate facilities all the output our co-located plant produced. But, of course, this information wasn’t in their press release.  Investors in my company could only assume the worst.  The stock opened down, hard and fast, and investors were calling non-stop. This was not going to be a good day.

In a crisis like this, you realize how important it is to have a history of consistent, transparent communications that provide context around your business and its operating environment.  In our case, we regularly discussed the structure and terms of our take-or-pay contracts with investors and the why surrounding them. We even filed redacted copies of these contracts with the SEC to be as transparent as possible.  As a result of these practices, investors had a baseline understanding of how we protected and mitigated commodity, operating and customer-risk.

We needed to respond and fast.  So, leveraging this existing context, we aligned messaging during a brief executive team meeting and then:

  • Issued a public statement indicating our customer’s obligations under our take-or-pay contract remained in effect, regardless of plans to temporarily idle its plant,
  • Blasted an email with this key message to everyone on our investor and media distribution lists,
  • Confirmed our CFO’s attendance at an investor conference scheduled to be held the next day,
  • Painstakingly returned all investor calls over the next several days, initially starting with the sell-side in hopes of amplifying our message faster,
  • The following week we reaffirmed annual guidance in a routine press release to further reassure the investing community.

Late the night of the announcement, I contacted the IRO at my customer company to let him know what we were saying.  It was a late night for him as well, as he quickly replied telling me he received almost as many calls from my investors as his own.

This experience highlights the importance of ongoing, consistent messaging that provide business context.  It also points to the importance of developing relationships with the IROs at customer companies.  After this, I found it useful to periodically touch base and align messaging around customer relationships and businesses with them.  This served all of us well by reducing confusion and the risk of unpleasant surprises.  You may want to consider doing the same if your company depends on a handful of customers or suppliers.

Lisa Ciota
Lead-IR Advisors, Inc.

A Terrible, Horrible, No Good, Very Bad Day

That’s what a short attack feels like.  I know.  I’ve been there. (To read about my terrible, horrible, no good, very bad day, see my case study here.)

By way of background, a short attack is when short seller(s) actively seek to profit by driving a stock price down.  Just about any company can become a target of a short attack, but those with complicated corporate structures, in regulated industries or with low liquidity or low float are most vulnerable.

Short attacks can be launched by well-known activists or anonymous bloggers operating out of their basement.  Such an attack can come swiftly in the mainstream business media and/or private investor forums like Value Investor Club.  One thing for sure is the market reacts before ascertaining the facts, so during a short attack a company is immediately forced into a defensive position regardless of the merits or accuracy of the short’s thesis.

What is particularly frustrating is the SEC historically has been skeptical of allegations against short sellers. When complaining about shorts, companies are often viewed as whiners and are rarely successful litigating claims against them.  Still there’s a glimmer of hope this may be changing. For the first time in recent memory, the SEC prosecuted a hedge fund last fall for its part in making demonstrably false and misleading statements during a short attack according to a Vinson & Elkins insight post.  This action will hopefully serve as a deterrent to the more egregious attacks.

Still, short attackers are not likely to go away anytime soon, so its best to be prepared.  Begin by assessing your company’s vulnerabilities.  A good resource to help you develop a short attack defense strategy is a primer put out by Ropes & Gray in late 2017.  In addition to this primer, here are some thoughts based on my experience:

  • Keep your ears to the ground. Be alert when seemingly tangential or even inconsequential questions begin to crop-up. Engage with investors, especially hedge funds, as they may catch wind of something before you do.
  • Assess your company’s risks and vulnerabilities and be familiar with common short seller tactics. This will help you be better prepared because once an attack begins, you may not have time to analyze the attacker’s playbook.
  • Aggressively monitor changes in short interest via your stock surveillance firm or retain a market structure analytics provider for timely updates. Know what’s normal for your company.
  • Don’t assume a short seller’s blog reaches a limited audience. If your stock is reacting and investors are calling, the game is afoot.  Focus on the best way to respond based on the merits of the short seller’s thesis and company vulnerabilities.  Regain control of the narrative and don’t engage in a public tit-for-tat.

My top recommendation is don’t get angry or distracted – focus your energies on defending and protecting the company.

Lisa Ciota
Lead-IR Advisors, Inc.

In a Clutch

In a clutch … that is being in a tense, difficult or stressful situation or crisis.  A clutch player is someone who can be counted on to perform (or outperform) in such situations.

Clutch players possess common leadership qualities[1] including:

  • Focus – It’s more than concentration, it’s knowing and staying fixed on the ultimate endgame
  • Discipline – Maintaining your center, avoiding distraction and being rooted in the fundamentals
  • Adaptability – Flexing and responding given the situation, pressure points and vulnerabilities
  • Being Present – Being in the moment and mindful of situational nuances, impacts and context
  • Constant Striving/Fear & Desire as Motivators – Complacency is the enemy of greatness and friend of the mediocre.

Why bring all this up?  Because these qualities are essential to confronting a corporate crisis … when clutch performances are required.  The good news is these qualities can be developed and programs focused on embodied, mindful or centered leadership can help.

But equally, if not more, important to navigating dynamic, chaotic crisis situations is to actually have a crisis plan, know it and practice it.  Crisis management plans need to be an integral part of a company’s enterprise risk management process and should be informed by and evolve with the company’s strategies and risk tolerances.

Now, what does a crisis management program look like?  Most experts indicate such a program should:

CompassIdentify Risks and Priorities:  Its essential to identify key operational and reputational risks, but nearly impossible to anticipate everything. So, establish guiding principles to guide the risk assessment process.  Such principles could be centered around priorities like protecting people (employees, customers and communities), preserving corporate reputation, minimizing operational disruption or preserving assets, etc.

PencilDevelop the Plan:  The crisis plan should include well-crafted decision matrices robust enough to handle an array of contingencies as well as contain escalation protocols, key communications templates and an outline of roles/responsibilities and work flow.

Team tableForm the Team:  The crisis team should encompass a variety of disciplines and expert resources (both internal and external) to guide and execute the response.  The people involved may be different depending on the type of crisis and decision matrices can help identify this.

ArrayPractice the Plan:  Practice enables crisis team members (internal and external) to build relationships and trust with each other.  Whether it’s a table-top simulation or a robust fire drill, practice will make you faster and nimbler when the need is real. It can also help identify areas where additional training, support or resources may be needed to reduce risk.

Danger signKnow How to Deploy: Work the plan. Gather information and stay focused on guiding principles.  Leverage the plan’s communication process and regularly share information as appropriate with key internal and external stakeholders.  After an event, let your guiding principles prioritize an integrated recovery plan.

Magnifying GlassReflection: After a crisis, conduct a post-mortem of root causes and what went well and what didn’t during the response. Reflect on underlying factors and take action to correct, mitigate, improve. Communicate key findings to stakeholders such as employees, customers, suppliers, communities or regulators as appropriate.

In a clutch, investor relations officers will be talking with investors nearly non-stop during a crisis.  So, think through the best ways to communicate with investors, who the key influencers are and who may need to be prioritized for outreach whether by you, your management team or board post-crisis.

Other Practical Tips for IROs:

  • Crisises aren’t always a surprise. Warning signs often abound. Develop a bullet-point outline for top of mind issues. Yes, there will be holes and you can’t anticipate everything, but it will be faster than starting from scratch.
  • Keep a key contact list with you – at home, the office, your briefcase. Even better, save a PDF copy to your phone, tablet and laptop – you’ll almost always have one of these with you.
  • Be prepared to handle a crisis remotely. Develop a process checklist or reference sheet (see sample) that contains emergency contact information and login IDs for key vendors such as your newswire service. Again, keep a copy with you and on your electronic devices.


Lisa Ciota
Lead-IR Advisors, Inc.

[1] Sullivan, P., Clutch: Why Some People Excel Under Pressure and Others Don’t.