HomeStandard PeopleDrawing PR lessons from the cash crisis

Drawing PR lessons from the cash crisis

Events in the news and on the ground are cause for constenation in the financial services sector. From the highest bank in the land, the Reserve Bank of Zimbabwe (RBZ), right down to your neighbourhood piggy-bank, things do not look good at all.

PUBLIC RELATIONS WITH LENOX MHLANGA

To say that our banking sector is in a crisis is an understatement. I have said in these pages before that banks do no inspire confidence in their customers. They are arguably rank outsiders when it comes to basic customer care, and I am being modest here.

But that is another story. As the cash crisis and bond note conundrum continues to haunt the sector, there is a sense of cluelessness as to how to manage the situation.

Public relations professionals, not the least myself, watched in horror as RBZ govenor John Mangudya stuttered and muttered when confronted with basic questions on his decision to introduce bond notes, among other measures.

Clearly, the decision was knee-jerk and he had not consulted widely as he had claimed. Restive business executives bombarded him left, right and centre on the wisdom of the decision that brings back bitter memories. They felt that, once again, the govenor had put the cart before the horse.

Just like with the introduction of bond coins, the public’s reaction was that of outrage and resistence. Memories are long and the coincidence was not lost on the populance. It was exactly 10 years ago that people’s bank balances disappeared at the stroke of the then RBZ govenor, Gideon Gono’s pen.

The fundamental difference between then and now is social media.

WhatApp, Twitter and Facebook went into overdrive and it seems that the cacaphony was not lost on Mangundya. Addressing concerned business leaders in Harare this week, he said that he, “enjoyed some of the cartoons.”

What he was referring to was a meme [and not a cartoon] of a man knocking on a door with a belt behind his back saying, “Reserve Bank govenor open up, I just wanna talk!”

While the govenor might have read the humour in that, I would certainly be worried about the general feeling out there. I would surely consider beefing up my security even when going to the loo!

The outrage can be summed up by the following analogy, also shared on social media, about the explanantion from the central bank.

“The introduction of RBZ bond notes pegged at 1:1 with the US dollar as a means of curbing externalisation, backed by a $200 million loan facility is tantamount to the breweries introducing 200 million litres of water packaged in beer bottles and then trying to convince drunkards that it is backed by 200 litres at SABMiller in South Africa. The water will then help curb dehydration among drunkards,” it went.

Social media has escalated a crisis which could have been minimised had basic crisis management tenents been adopted.

I have a few observations that might be worth a cent’s worth to the distinguished govenor. With his retinue of advisors, Mangundya should have read the mood from the previous bond coin introduction experience.

When that happened, people were already omniously predicting the imminent introduction of bond notes. At that juncture, the govenor had denied that the coins, which have been widely accepted, were a precursor to the reviled notes which by all indications might suffer a still-birth.
The introduction of the Zim dollar through the back door is a fear that is real and it is well that the govenor realises this.

Winning and preserving the public’s trust and confidence is of crucial importance. The danger of a stampede on the banks was only prevented by a cash shortage. If the truth be told, many believe their money is safer under the pillow.

That having been said, let us examine some issues on how such a crisis could be tackled.

Evidently, the cash crisis was not a sudden event, but had been simmering for quite a while. RBZ authorities must have been monitoring the situation and perhaps thought it would go away. But, as we are fully aware in public relations, “a problem that goes away by itself, comes back by itself.”

A crisis has the effect of eroding the public’s trust in leadership, according to Erika Hayes James, a organisational psychologist at the Darden Graduate School of Business at the University of Virginia.

James’s case study on crisis in the financial services sector demonstrates how leadership competencies of intergrity, positive intent, capability, mutual respect, and trasparency impact on the trust-building process.

“In a crisis, a good leader attempts to create order and make sense, retrospectively, of what occurs. What is important here is the ability to consider another person’s or group’s point of view,” observes James.

The greatest challenge to the RBZ and indeed the banking secor is what James calls “speaking truth to power”, to predict worst-case scenarios.

Other organisations, such as the Red Cross, make it their primary mission to prepare for and prevent the escalation of crisis events.

The RBZ looks intent on working diligently to bring the crisis under control, and to an end as quickly as possible to limit the negative publicity to the govenor and the banking institutions. This is called damage control, yet when it happens very often, trust is severely eroded.

In the wake of a crisis, that is assuming that “this cup will soon pass”, leaders must adopt a learning orientation and use prior experience to develop new ways and behaviours that ultimately change the way the organisation operates.

Finally, the effort taken by the organisation to communicate with the public and stakeholders before, during and after a crisis is key. The ability of the RBZ to take advantage of social media to manage the cash crisis left a lot to be desired. over-reliance on the traditional media for information dissermination could be desceptive.

The fire continues to rage on social media yet the introduction of counter messages from the central bank that assure the public are glaringly missing. Social media is no longer just a novelty, it’s now an important tool that an organisation can use to reach previously untapped audiences.

The cash crisis holds pertinent lessons for leaders in the financial services sector. The need to anticipate and prepare (scenario planning), working to rebuild and win trust and confidence in the system, and to communicate are the key pillars in managing a crisis.

l Lenox Mhlanga is a specialist communication consultant and can be contacted on email: lenoxmhlanga@gmail.com for information in the article.

Recent Posts

Stories you will enjoy

Recommended reading