Earlier this year, corporate CEOs told global public relations company The Weber Shandwick Collective that wars, cultural issues, terrorism, and political attacks were threats to their companies’ bottom line. They also told researchers that they doubted that their communications teams could handle a crisis if it struck.
With cultural issues creating short-term crises (American Eagle, Astronomer), market adjustments resulting in mind-blowing strategic errors (Cracker Barrel, Bud Light), and tariffs impacting companies across the globe, these concerns align with reality.
One solution is to avoid any crises -- unrealistic with outrage culture being as strong as it is. Another is to invest in a trusted team that can see crises coming, build plans to prevent them, and execute effective solutions when they happen.
In short: Here’s a bottom-line, profit-driven argument for why corporate leaders should invest more in crisis management and mitigation efforts.
How crises hurt your bottom line
They do in three ways. The first is the direct loss of sales and profit during and immediately following a crisis. Take Southwest Airlines, which in 2022 saw its outdated pilot scheduling system crash during Christmas season snowstorms. Revenue losses alone totaled roughly $800 million, ending what had otherwise been an industry-leading profitable year.
Then there’s the cost of fixing the crisis. Southwest suddenly faced reimbursing customers, providing some employees premium pay, and spending massive leadership and communications resources trying to reassure stakeholders that the company would take care of them. Two months later, Southwest’s COO told Congress that pilot system upgrades would cost the company an additional $300 million on top of its normal billion-dollar annual technology budget. And all of that was before a $140 million U.S. Department of Transportation fine and a $90 million voucher system instituted by DOT.
And then there are the subtle losses, like longtime customers wondering if they should take their ticket purchases, credit cards, and airline loyalty accounts elsewhere.
These costs are considerable, no matter the scale of your enterprise. And, yes, they could hit any company in an era when everything you do is under a digital microscope.
How crisis preparation protects the bottom line
The best way to prevent a crisis is to not have one. (Shocking advice, I know.) And one of the best ways to achieve that lofty goal is to have the comms team at the table when decisions are being made.
Each company function has specific areas of responsibility that thread through the entire organization:
- The financial team keeps the books clean so the IRS stays off your back.
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Operations makes sure that consumers receive the products they ordered at the time and price to which everyone agreed.
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IT engineers stop cyber threats that could steal everyone’s data and shut the company down.
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Sales brings in the money that funds all of the above.
Each of these functions keeps the company alive. And communications is the one that keeps internal and external stakeholders talking to each other, creating synergies instead of silos.
“Major brand crises impact every function of a company,” said Aaron Walker, Managing Director of Think Big. “It’s not just a reputational issue – finances are impacted, HR engages employees (the company’s best ambassadors, who are expensive to replace), and the legal team is working on filings and approving statements. The more that every function is seen as part of the brand’s preparation for, and response to, crises, the less of an impact on the bottom line.”
Imagine if communications, management, and government affairs had worked towards transparency instead of deception when Philip-Morris’ CEO joined other industry leaders in misleading the public and Congress about the harms of cigarettes. Short-term sales would have been lower, but the company would have avoided its share of $206 billion in state settlement payments that paid for anti-smoking campaigns, the ouster of its CEO, and a “shame factor” bad enough to demand an expensive name change.
Target could have avoided boycotts from consumers across the political aisle and the recent resignation of its longtime CEO if product development, marketing, and HR had recognized that diving headfirst into LGBT issues in 2016 would upset its conservative customers - and that whiplash-inducing withdrawal from DEI in 2025 would put a target on its back among liberal customers.
And the Catholic Church wouldn’t have had billions of dollars in settlements if a voice of reason had said to management and legal, “Admitting we have a problem will hurt donations and grants. It will be an ugly road ahead. But transparency will show that we’re intent on rooting out evil instead of trying to hide it.”
A properly resourced communications team can often look to the future of reputation the same way the CFO can project revenue and profit. That includes assessing when an organization should run silent.
- Bud Light didn’t need to destroy billions of dollars in market cap when it partnered with a transgender influencer in 2023 - or to create further customer frustration by jerking the other way after core audiences reacted poorly.
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Boeing - which is full of crises these days - avoided one in 2020 by staying silent when future American presidential candidate Nikki Haley criticized the company as she left its board of directors. The company quietly went about getting billions of dollars in support from the U.S. Federal Reserve.
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Restaurant chain Five Guys doesn’t respond to those who complain about its prices.
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More recently, American Eagle and Astronomer used silence to effectively let news cycles surrounding their brands run themselves out of gas.
Building a robust comms function is your company’s brand backup
All departments have crisis response protocols. IT has backups, secondary systems, and human protocols to prevent or combat a system shutdown. Most financial departments rely first on profit and healthy cash flow, then on cash reserves, and only lastly on debt to grow by acquisition or to survive downturns.
Comms should be given the same authority and budget to build a robust infrastructure that supports the organization’s growth…and, yes, have backup systems for when the worst comes to pass. These systems should include capabilities such as:
- Conducting market research before, during, and after a strategic decision like regional expansion, a new product launch, or entering a new industry. (Cracker Barrel: Looking at you)
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Partnerships with the rest of the company - such as the social team, legal team, and regulators.
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A budget for specialized vendors when regional or industry expansions are taking place, or when crises hit.
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Testing your plan through military-style drills to make sure they work and that the teams are ready to execute.
“Companies that have an existing plan that is regularly tested with all stakeholders can react faster to crises and return to the business of business more quickly,” said Walker, who has run crisis responses for Boeing, Starbucks, Microsoft, and other global organizations. “You bring customers back more quickly to increase sales, appease regulators to avoid fines and expensive regulations, and focus management on growing instead of scrambling.”
Likewise with communications. Even before the crisis comes, the comms department should be beavering away, building trust during the good times. Then customers will give your brand a second chance, especially if the crisis isn’t of your own making. It’s not Frontier Airlines’ fault that a Boeing panel blew off mid-flight, and Delta didn’t ask Crowdstrike’s upload failure to impact its systems. But both companies were on top of the crisis responses, even if Delta’s operations took time to get back on track.
“Communications teams act as your general counsel for the court of public opinion,” said Dave Trausneck, Director of Communications at Optum. “You would never go to a deposition without your attorney - and you shouldn’t go into a public relations firestorm without your comms team. They’re like your second legal counsel because crisis communications is an insurance policy against disaster that could cost the company 10 or 20 times more than the premium.”
Building trust before a crisis is your brand’s insurance policy
2025 has been a challenging year for many CEOs who had hoped for global growth after years of hiccups and uncertainty. It’s hard to justify additional expenses that don’t seem to drive a direct ROI - especially when tariffs, wars, and terrorist attacks are top of mind.
But remember Southwest’s 2022 disaster? Ryan Cohn, a partner at public affairs and crisis firm Sachs Media, told me that Southwest built “a cache of goodwill” with customers long before the snow struck. “Southwest spent decades earning stakeholder trust, so customers were more willing to give them the benefit of the doubt during that very challenging time.”
“In the early days of a crisis, brand equity buys time. It gives companies space to fix the problem, even while lawmakers hammer them in the headlines,” Cohn added.
The simple fact is that crisis communications directly and positively impacts the bottom line. So if you are worried about a crisis and believe that your communications team couldn’t handle one if it arrived, it’s time to get a reputational insurance policy. It’s a small investment to prevent catastrophic financial losses - and even if you never “call it in,” it will still be working for you the whole time.
