Archana Muthappa shares her PR experience and learnings from the infamous Satyam crisis
12th February 2019
The Satyam Crisis: A Communicator’s Perspective
January 2019 marks a decade since the Satyam scam – one of India’s largest corporate governance transgressions. Much water has flowed under the bridge since then. Today, Tech Mahindra, which subsequently acquired Satyam, is as successful as any other Indian IT services company.
Reams and reams of (virtual) paper have been used to write versions of stories by Satyamites, journalists, analysts and others involved. Why do I add to those reams? Yes, indeed… Simply in the light of the fact that the very mention of Satyam still piques the interest of people – especially students of communication and communicators. They want to know what it was like and how I dealt with the crisis as the head of media relations for Satyam in India. They are intrigued to hear that it was possibly my best assignment ever.
What could be better for a communications professional than to be thrown in at the deep end of a crisis? To come face-to-face with and live, breathe, eat that which we only hear about. Those were crazy, endless days and nights. Phones rang nonstop. I often joked that my phone had a virus – it just wouldn’t stop ringing! The endeavour is to enable communicators to get a sense of how it played out for the Satyam team, who suddenly came to be at the forefront of an otherwise media-shy organisation. This is not an examination of whether the Satyam management was morally right or otherwise. Nor is it an attempt to resurrect the past. This isn’t to preach, rather it is to inform. At a time when some of the unicorns and established business houses that make up the fabric of our lives are beginning to show cracks, can this create a perspective on what deep, dark secrets some of these hold?
In the beginning…early signs of the looming corporate crisis
The first time I got a sense that there was something amiss was when a TV journalist called to request an interview with Mr. Ramalinga Raju on December 19, 2008 – a day before Satyam would go into the ‘silent period’ – on the news that had just been put out on the stock exchange. I was based out of Bangalore at that point, and had no clue of the announcement he was talking about. What’s more, neither did my manager when I called him subsequently. That was first of several hundred calls I would receive – each day – over the next 4+ months: requests for details related to information that I was not privy to.
It turned out that Satyam had acquired Maytas* and informed the stock exchange, as all listed, law-abiding companies are mandated. The decision had been taken, written up and the stock exchange informed. And the communications team did not have the faintest idea. In less than three hours, a hastily-arranged set of interviews and a press conference with Mr. Raju reiterated the synergies between the two companies, the current economic scenario that made it seem so right. Cut to 7.30 PM the same evening, when Mr. Ramalinga Raju would address investor queries during the Investors Call. Unnoticed by any of us, the dial-in number for the investor call was on the press release that went to the Stock Exchange and the entire media universe had also logged in. CNBC TV 18 went one step further and broadcast it live!
(*Background: Maytas (Satyam spelt backwards) was a real-estate and infrastructure firm that was headed by Teja Raju, the son of Ramalinga Raju. Maytas had large parcels of land in Hyderabad that were being developed for residential and commercial use; and was tasked with building the Hyderabad Metro as well as two regional airports in Karnataka. This was the time when the world was witnessing a financial meltdown – property valuations were at a nadir; large financial institutions were on the brink of closure – some had already closed.)
What followed over the next 90 minutes was the best-chronicled beating on live television that investors had ever given a promoter! The FIIs were threatening to back out and let both companies collapse, individual investors were demanding, stating and pleading while Mr. Raju roundly defended his decision. It was a slugfest that became a public spectacle. Turns out that no one had been consulted – neither the management team, the board, investors – just no one. This merger was an arbitrary decision.
By then, I was booked on the first flight to Hyderabad on the morning of December 20. By around 2.00 AM, it had become clear that Mr. Raju was going to roll-back his decision to merge the firms – based on FIIs and investor feedback. Then began the writing of the new press release and scheduling of another round of interviews with the media. When I arrived at the gates of Satyam’s Hi-Tech City campus in Madhapur, Hyderabad, I saw more OB vans than I had seen in all my years of being in the PR business. That was soon to become a common sight, as well.
So, the deal was rolled back and everything was expected to be over and done with. What happened, rather, is that a can of worms overflowed. Over the next four months – until April 12, 2009 when Satyam was reincarnated as Tech Mahindra – life was an unending cycle of questions, fabrications, key messages and con-calls.
The storm after the storm
The dream of every communications professional and client came true – Satyam (now Tech Mahindra) made the front page of The Economic Times, every day, day after day – for four months straight!
I speak of this situation with such heightened enthusiasm only in retrospect. While it unfolded, along with the team, we went through all the phases of being angry, agitated, depressed and excited. The initial days were chaotic - since most of the senior team was busy dealing with the issues of business, the government, clients, teams, etc. The communications team became the face of the company - not just for media, but for everyone who ever had any interest in Satyam, including shareholders, worried employees and their anxious parents.
There’s no doubt that, back in the day, Satyam had put Hyderabad on the global IT map and played a role in Indian IT being recognised. We heard stories of how weddings of Satyamites were called off because of the ‘scam’.
It is said that a person’s true character shines brightest during adversity – there could not have been a better test of character than this one – industry stalwarts maneuvering for a share of limelight, colleagues using the opportunity to build a public persona, senior management turning into ‘sources’ - we encountered it all.
After the initial, unending days that rolled up into nights, we took stock. We realised that while it was important to keep the messaging to the external world accurate, our employees were suffering from a lack of information and scaremongering.
We settled into a rhythm. 6.00 AM – media was scanned and the most impactful or disturbing stories noted. 6.30 AM was the first call of the day to take stock and plan for the day. The marketing and communications teams came together to produce a daily newsletter - this went out to employees everyday (initially, and less frequently as clarity emerged) for the duration of the crisis.Even if it was a single page, it had all the relevant information. This was instantly ‘leaked’ to the media. What started out as platform that would bring all employees up to speed with accurate information, before long became our main messaging document - media, clients, shareholders - all waited for what it would say, and it became an important tool by which the discourse could be channeled and rumourmongering be quelled.
The Satyam crisis happened at a time (thank goodness!) when social media and the online space was still evolving. It had nothing of the impact and influence it has today. However, having lived through it and with the lucidity that hindsight brings, I believe that a lot of the key learnings are much the same. We still deal with people, and human nature is much the same, albeit at a faster pace!
Learnings (mostly in retrospect):
- Remember the internal audience. They are a critical participant, your ally and source of strength when all else fails. They must be considered a major stakeholder.
- Take every phone call - even if you have no information. Have a conversation and say you’ll do your best to find out, even if you don’t know or can’t share. Also, return every call - even if simply to say ‘no update’.
- Honesty - when you don’t know or can’t share information, state it upfront – and, no conjecture - do not walk down imaginary scenarios with anyone - media or otherwise.
- Disregard ‘small’ media outlets at your own peril - they could start a train of thought that didn’t previously exist .
- Internal memos and documents will get shared in public - use these opportunities effectively.
- Ensure that your team is made up of people who you believe can be counted on for their strength of character during a crisis - the work can be taught and refined.
- Don’t call people from your team out in public - if you know they have messed up, take them aside and rap them hard, but lovingly, on the knuckles. Always have the back of your team in public - rap them hard, but lovingly, behind closed doors; but if you are the head of the team, the buck stops with you - no matter what. Conversely, show appreciation for a bold decision or a good idea in public and do not take credit for what was someone else’s idea.
- Step up - in the absence of a spokesperson, use your position as the receptacle of all information effectively. Remember to place the organisation above all - no matter what.
All views are personal and based on my understanding of the situation.
Archana Muthappa was head of media relations during the height of the Satyam crisis.
She is now, head, corporate communications, Bangalore International Airport Limited