During the past several years, the Federal Reserve Board has made an effort to be much more transparent about it’s intentions for monetary policy. Previously, the Fed’s decision making processes and intentions were shrouded in mystery, leading economists, journalists and policy makers to place Fed governor’s speeches, comments and Fed minutes under the microscope to decode what every syllable meant.
While this still happens — the decoding — the Fed has without a doubt been successful in removing at least some of the mysteries behind its decision making processes and intentions. Still, it’s continuing efforts to refine its message demonstrate how difficult it is for any entity to not only successfully communicate it’s message to its varied constituencies but also control the fallout from the perceptions that messaging receives in the marketplace.
In today’s Wall Street Journal an article entitled Up for Debate at the Fed: A Sharper Easy-Money Message illustrates this dilemma. In this article, and many others I’ve read about the Fed, their intentions seem pretty clear. While they are moving towards tapering their bond buying program and eventually raising short-term interest rates as long as the economy cooperates, which will be measured at least partially by continued progress in lowering the unemployment rate.
Despite Ben Bernanke, other Fed governors and Fed minutes repeating this message over and over again, the markets, economists, journalists, policy makers and others interpret the Fed’s statements in a variety of ways. Some of this is due to the nuances of the Fed’s message and the fact that not everyone on the Fed Board agrees with this timeline, and part of that is due to how all these different stakeholders decode what the Fed says and what it doesn’t say.
The Fed has a huge platform that ensures that it’s message is front and center in a variety of news outlets, blogs, etc. But a platform isn’t everything. For companies and organizations that don’t have a large platform, it’s easy to think that size will grant clarity, but as we see with the Fed, that isn’t necessarily the case. In fact, it may be just the opposite — that the bigger the platform, the higher the stakes and the more complex the message, the harder it is to communicate it and control it.
So as your platform grows, your message will be heard by a larger audience and it will generate more debate and discussion among a wider variety of stakeholders. That’s the exciting part. The challenge is that what those stakeholders hear, perceive and understand about your message may be far different from what you initially planned to communicate.
For me, that means defining and breaking down the message on the front end — before you attempt to communicate it — is even more critical. That’s especially important with complex messages, which are inevitably going to be subject to more misunderstanding and interpretation than relatively simple messages. It also means that entities have to be listening in the marketplace to understand how their message is evolving and being heard by their stakeholders as it penetrates into the marketplace. That message needs to be reinforced in a variety of ways on an ongoing basis to at least try to ensure the original intent of the message is being achieved.
I see this as a reminder to everyone in the branding and communications business that we have limited control over our messaging and that we continually need to work on not only creating more effective messages but also working more at communicating those messages in a variety of different formats to try to achieve the best outcome possible.