What Faith-Based Orgs Can Learn from the SVB Failure
Communications lessons from the Silicon Valley Bank failure
What can the faith-based community learn from the failure of Silicon Valley Bank? On the surface, the two may seem too different to have much in common, but in looking deeper, we see an important lesson in using communications to build trust.
A Crisis in California + the Role Communications Played
Before its failure on March 10, Silicon Valley Bank (SVB) in California was the 16th largest bank in assets in the country. SVB was a lender for tech startups, using investments from venture capital firms. The hint of its failure instigated a run on it and other large banks, influenced the failures of at least two other major lenders, and triggered the FDIC and Biden administration to act.
While SVB’s failure can be traced to high interest rates, potentially questionable management and plummeting stock prices, the lesson for ministries and nonprofits boils down to one aspect of the bank’s failure: communications.
Mistakes made by SVB’s leaders before and during the bank’s failure demonstrate the power communications can have, and how critical it is to properly communicate during a crisis.
3 Communications Mistakes to Avoid
Here are some critical user experience principles to apply to your nonprofit web design:
Ignoring Your Stakeholders
SVB did not sufficiently communicate with its stakeholders when it announced it was trying to shore up its investments. Instead, the bank’s leaders issued a press release. While a press release can be an efficient way to quickly share news and facts with a broad audience, it is important to remember that any announcement personally and deeply impacting your stakeholders must be communicated directly to them before the public learns of it.
Downplaying the Situation
Following the press release and subsequent demands from stakeholders for more details, a “don’t worry” approach from the bank’s leadership did nothing to quell the growing concerns—and it certainly did not stop the rapid spread of rumors on social media.
REMAINING Silent
Despite the growing fear, SVB chose to be silent, allowing its customers and the population at large to fill in the blanks with guesses that escalated into near panic and a resulting crisis of confidence. Certainly, customers and investors of SVB felt betrayed and fearful, but as miscommunication spread rampantly through social media, millions of Americans began to question the security of the entire federal banking system.
Silicon Valley Bank’s poor communication demonstrates a missed opportunity, but it provides a chance for faith-based organizations to learn how to successfully manage through a crisis.
Start with a Strong Foundation
Crises can take many forms, including a bank failure that infects the confidence levels of millions of people. By definition, none of us knows when a crisis will happen, so we must be ready when it does.
The first step is to establish a solid foundation of trustworthy and proactive communications every day. Your stakeholders must learn they can trust you by what you say and do over time.
Before a crisis inevitably strikes, you must instill a solid foundation of trust in these ways:
Share authentic and honest communication regularly.
Give opportunities for your stakeholders to ask questions and get answers.
Be leaders who are accessible, credible and responsive.
Develop a deep understanding of your stakeholders.
For nonprofits in particular, trust is the cornerstone on which the operation is built and flourishes. Without that bedrock of trust, an organization is without a rudder. Directionless, stakeholders will seek assurances elsewhere, often in the rumor mill that social media cultivates.
Have a Crisis Plan
Not every crisis results in a crisis of trust. When handled well, a crisis can even be an opportunity to build confidence in your brand.
Preparing for a crisis means being ready to proactively manage communications using that foundation of trust that has been established during the days, months and even years beforehand.
A crisis communications plan directs an organization’s leaders step-by-step through the crisis period and the post-crisis time. It helps leaders:
Stay objective.
Keep the needs of your community in mind.
Respond authentically and proactively.
Strengthen the confidence the public has in your organization.
Leaders who are ready for a crisis can weather the storm more successfully and even strengthen relationships with their stakeholders. Read seven ways you can prepare for a crisis.
What Will Be Your Story?
The failure of the Silicon Valley Bank is a lesson in crisis communications—or better put, the lack of it. This lesson should encourage faith leaders to proactively, swiftly and authentically communicate with stakeholders in times of crisis, getting ahead of the narrative in order to squelch unfounded rumors.
Well-reasoned and proactive communications are powerful. The lack of them can topple an organization and spur breakdowns in trust. By employing strategic communications in good times and challenging times, you can help ensure that your ministry’s most important stakeholders feel secure, respected and informed.
When that next crisis inevitably hits, what will your constituents think about you?
Our team is experienced in helping organizations prepare for and manage through crises, and we have developed risk management tools for faith-based organizations. We would be honored to partner with you in this preparation.