Reuters takes a look at the time-honored practice of hiding bad news.
It seems a lot of PR people were busy breaking bad news last week while the rest of the country were tucking into cooked Turkey.
Among the companies use the holiday period to cushion bad news were: Federated Investors Inc. (PDF) (Tuesday night – results of an internal investigation), Lumenis (A stock exchange de-listing notice on Wednesday after trading closed), Microlog (Loss of government contract), Visteon (New CFO not joining). Interestingly the stock in all these companies, other than Federated Investors, suffered heavy reverses on Friday even though it was a shortened trading day.
Now in fairness, many of these firms may have had legal requirements to get this news out, regardless of the timing. SEC regulations don’t give you a lot of flexibility on timing, however timing is a well known weapon of news squashing. If I remember correctly, the UK government was accused of using the Queen Mother’s death to hide some bad news (I think the allegation was unproven).
However, while these quiet time announcements *may* reduce short-term column inches, does it help organizations in the long run?
Communication is a long-term process. This means that it includes the good and the bad. If you don’t front up the bad news, your audience might feel a little aggrieved. A more rounded, mature approach to dealing with bad news can often prove more beneficial.
To dust off the academic case study, Tylenol’s handling of their tampered drugs issue got them more positive press and perception than probably any of their “good news” communication. Bad news is a fact of (business) life, what seperates the good from the ugly is the ability to communicate well is hard times while being professional enough to claim mea culpa when it’s required.
“That (releasing bad news during holiday periods) kind of ploy can really break down confidence and trust,” said Michael Morley, deputy chairman for PR firm Edelman.
Murphy's Law 