As I type these words, we wait with baited breath for the Australian Securities Exchange (ASX) to open.
Will we have the courage of our convictions and have confidence in the overall strength of our economy here, and the businesses that are the fuel for that economy, or will be follow the herd?
Since the announcement of the US downgrade by Standard & Poor’s (called a PR stunt by Gerard Noonan in an interesting article in today’s Sydney Morning Herald) I’ve been watching the coverage and comments. Many comment on the lack of confidence in the market.
Silly me. I thought the world’s stock markets reflected profit and company growth, not confidence. Perhaps the whole capitalist structure is shifting. Perhaps we now measure and trade in subjective confidence, not factual results. So be it, but let’s not confuse a “confidence-e-ometer” with a stock market.
Either way, though, companies need to get better at two things: confidence and communication.
The two dovetail together in different ways.
A company should have the confidence to communicate the facts and its beliefs.
A company should communicate the confidence it actually has.
A company should communicate often, to build confidence in what it has to offer and in what it has to say.
Any deficiency in any of these combinations starts to feed the subjective market doubt that we are now seeing, and which, all other things being equal, feeds on itself.
I think these confidence-communication combinations apply even more if, as we still believe, we have a capitalist system built on companies creating products and services that people actually want or need, and make money making them available. Because it’s a shame, to say the least, if a company is successful, and profitable, making great products or providing great services, and still falls foul of a lack of market confidence that is unwarranted.
As an example, Australian Prime Minister Julia Gillard has done a good job over the past two-three days communicating confidence about the Australian economy.
And this is not about spin, either, because companies cannot mislead. Having confidence means knowing what to do next, and those decisions may not be that palatable. (Again, in a market addicted to growth, it does take some bravery to explain that company growth might falter.) Communicating those decisions, of itself, demonstrates and creates confidence. Authenticity and the credibility it creates are essential as always.
As for the audience, this also goes beyond immediate shareholders and partners. The public at large can sense and feel confidence. Companies having the confidence to communicate, and which communicate confidence, will instill confidence.
Companies need to get better at not just communicating the facts about what they sell, and why we should buy. They need to get better at this much more strategic communication task, at the communication-confidence combination.