IRF case study: crisis communication in four phases
03.01.2025
1. Background
A globally active, listed software company found itself in crisis at the beginning of 2024 when a short seller published serious allegations. The allegations centered on the company's financial transparency and business practices. They posed a serious challenge to its reputation. The short seller launched his broadside a few days before key communication dates, including the publication of the annual report and the Investor Day.
2. The challenge
In the minutes following the publication of the allegations, the software company's share price fell by around 30 percent. The company faced the dual challenge of countering the immediate reputational damage and finding the best way to deal with the serious allegations in view of the upcoming events. The crisis team had to act quickly to maintain trust while carefully managing the messages to avoid aggravating the situation.
Key questions arose from a communications perspective:
>> The response: The company acted decisively and implemented a structured crisis communications strategy to provide immediate and informative answers. |
3. Immediate response
Around five hours after the publication of the short seller's report, the software company published an initial statement. The statement was carefully worded and contained a summarised refutation of the allegations. This gave the company time to conduct a more thorough internal investigation before publishing a more detailed response. The company also announced a comprehensive investigation of the allegations by external specialists.
It focused on maintaining the confidence of its investors. The software company confirmed its financial forecast and emphasised its strong free cash flow. It avoided mentioning the short seller by name or arguing publicly, instead letting the figures speak for themselves.
A few days after the first statement, the company published a second, more detailed response. The Chairman of the Board of Directors also gave interviews to the key media to put the news in context and to substantiate the arguments.
The results of the internal investigation were published two months after the attack. They confirmed the integrity of the company. The in-depth investigation emphasised the company's commitment to transparency.
4. Findings
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Speed and structure in the reaction |
The ability to issue an initial, well-founded statement within a few hours was crucial. The rapid response signalled that the company wanted to and was able to regain control of the interpretation. |
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Transparency and thoroughness |
The rapid announcement of a thorough investigation demonstrated the company's commitment to transparency. |
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Controlled media strategy |
Through careful, fact-based communication, the company was able to avert further damage and lay the foundations for gradually regaining the trust of the market. |
The case of the software company shows how crisis management can be successfully implemented through rapid action, thorough investigation and careful, consistent communication.
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