A focused communications plan can be a powerful tool in achieving the overall goals of a restructuring. If not properly executed, a communications plan can turn into a black hole that sucks up time and resources without producing a result.

Much has been written about the importance of a sound communication strategy for a company preparing to restructure. Very little, however, has been written about the importance of developing the tactical plan required to execute the strategy. Unfortunately, many a great strategy has been doomed for lack of the tactical tools required to implement it.

The company planning to execute an out-of-court restructuring or a chapter 11 reorganization faces a huge communications task. The task is made more challenging by the fact that the bulk of the actual communication effort takes place within a one- to three-day time span. The concept is that it is best for the company to deliver the news to its constituents so that it can provide the facts and emphasis that are most important to each audience. Otherwise, the company cedes control of the message to the media and others, which may not serve the company's objective of achieving as much constituent support as possible.

Layered onto this huge communications task is the fact that troubled companies often lack the database that is necessary to identify and locate key constituents, including employees. Just ask a troubled company client for a list of vendors by business unit by dollar volume, with a contact name and phone number. Inquire as to how many employees are at each location of the company, the physical address of that location and the location manager's name and phone number. And by the way, who answers the phone there? Try to determine how regional sales managers communicate with the field sales force, and how a package can be delivered overnight to those who work out of their homes. The finest communication package ever prepared is worthless if a company can't get it where it needs to go when it needs to be there.

This article discusses how you can help your clients manage the job of communications with the following steps.

Form a Communications Team Early

There are three key responsibilities related to communications—drafting the communications documents, planning the logistics and acting as a spokesperson for the company. Assign these responsibilities early. Don't wait until the day before the restructuring is initiated. Include the responsible persons in planning sessions and document reviews so that they are well versed in the why, when and how of the filing. If these responsibilities will be handled by three different individuals, they should act as a team, with one individual responsible for reporting to the appropriate company officer.

Identify the Audiences

Working with the appropriate functional heads, the communications team should identify by category all the major constituents of the company. These would include employees, trade vendors, customers, all categories of lenders, media, governmental bodies, union officers, community groups, joint venture partners. Gather lists of members of each audience, with address, phone and fax numbers. Sort the lists by the relative importance of each member so key people get first priority attention.

Define the Messages by Audience

One size does not fit all. If your client cannot customize the message for each of its audiences, then it doesn't understand their needs, and its communications efforts will not be effective. Vendors need good reasons to keep shipping. Customers may assume the company is out of business. Second shift employees may not show up for work. On the other hand, employees don't necessarily care that vendors' post-petition debts will be paid on a business-as-usual basis.

Crafting the right message for each audience is the most difficult step in the communications process. Don't underestimate the time it takes. Functional executives in the company should be responsible for working with the communications team to define the proper context and messages for their constituents. For example, the top sales executive should define the message to customers; the CFO needs to articulate the message to lenders; the head of purchasing must have input into communications with critical vendors.

Once messages have been defined for each audience, look at them in total to assure consistency and accuracy. While each message has a specific perspective depending on its audience, they all should have a common theme and tie back to the company's overall communication strategy and business strategy.

Prepare the Communications Documents

Just as one message does not fit all, neither will one document or communication medium work for all. The specific types of documents and approaches will be dictated by the overall strategy. However, one generalization is that personal verbal communication is best with the highest priority members of a constituent class, followed by written communication that reiterates the key points.

Scripts for talking with outside constituents are strongly recommended. The top priority members of each audience should be contacted by phone on the day of the filing. Giving them a personal "heads up" is an effective way to demonstrate that they are important to the company, and it creates the opportunity to express the company's need for their continuing support. In this process, all individuals who will be speaking with outsiders—such as vendors or customers—should have a written script to refer to that provides answers to as many questions as can be anticipated. This is not the time to ad lib. Vendors talk to each other, and it is counterproductive to give different facts to critical audiences.

Send letters to outside constituents that reiterate the key points that the company wants to emphasize. These letters can be faxed as a follow-up to those individuals who were personally contacted, and can give them the pertinent facts on paper to share with others in their organizations. Other constituents may receive a letter only. Personalizing the letters with the recipient's name, company, etc. is preferable to a "Dear Customer" letter; however, it is not always practical. Depending on quantity, these letters should be faxed or mailed first class.

If a news release is appropriate, develop a list of the media who will receive the release, including general business publications and trade or industry publications. Identify specific journalists that cover the client company or industry. Check with the client's investor relations and/or public relations departments to verify whether they have the required tools to distribute the release. Decide who will act as the spokesperson with the media, and make sure that individual is available to take media calls.

Employee Communications

Employee communications can be the most difficult, both emotionally and logistically, particularly in a large company. The main reason that these communications are logistically difficult is that employees should hear the news about the restructuring or chapter 11 from their front-line supervisor, ideally in a face to face meeting. They should not hear it on the radio or read about in the newspaper first.

Supervisors also should be informed of the filing by their direct manager. In effect, an internal cascading of the news from one management level to the next needs to be managed. Arranging these meetings and having copies of the communications documents on site requires ample lead time. On the other hand, it is important to be discreet in the planning phase in order to minimize employee speculation and anxiety.

All supervisors who will lead meetings should be provided with communications guidelines for the meeting. They need to be prepared to answer questions about the impending process and its impact on employees, and what is in store for the company in the immediate future. Allowing time for a "Q&A" session at the end of the meeting is extremely valuable.

Because restructuring and reorganization are complex topics, it is essential to provide employees with a communication package that reiterates important facts and provides contact names of people in the company who will handle special situations. Including a written Q&A that answers frequently asked questions in the package can avoid many misunderstandings. Employees won't absorb everything at the meeting; they will forget or misremember the answers. Having the Q&A keeps everyone's understanding consistent.

Employees that have regular contact with outsiders, such as accounts payable clerks, shipping and receiving personnel, receptionists and the sales force, need additional guidance about their own role in communicating about the company's reorganization, and how to deal with outsiders' inquiries. To be most effective, they should get this instruction on the day of filing.

Execution Is Everything

Executing the initial communications strategy requires an enormous effort and significant planning. All documents should be reviewed by the company's legal counsel. Meetings (in person and/or teleconference) must be coordinated. Scripts and documents for distribution must be in the right hands at the right time and in the correct quantities. Mechanisms for feedback and responding to questions have to be in place. Without the tactics and the tools, the "first day" communications strategy will never get off the ground. And that, to paraphrase Martha Stewart, would be a bad thing.