Why Crisis Communications Matter More Than Ever
In today’s hyper-connected world, organisations face an unprecedented level of scrutiny during crises. A single misstep in communication can lead to significant reputational damage, loss of stakeholder trust and even financial repercussions. Crisis communications is no longer a reactive function - it’s a critical strategic capability. This article explores why crisis communications matter more than ever, how changing global trends have heightened the stakes and what organisations must do to ensure they are prepared.
1. The Growing Complexity of Crisis Communications
The landscape of crisis communications has evolved dramatically over the past decade. Several key trends have heightened the risks and complexities that organisations must navigate.
a) The 24/7 News Cycle and Social Media Amplification
News spreads instantly - long before organisations have time to prepare an official response.
Social media magnifies crises, making small incidents go viral and triggering public backlash.
Organisations that fail to respond promptly and transparently risk losing control of the narrative.
📌 Example: United Airlines (2017) – During a passenger removal incident, videos of security personnel forcibly dragging a passenger off a flight spread virally. United’s slow and tone-deaf response further escalated the crisis, resulting in a stock price drop of over 6% ($1.4 billion in market value lost) within days.
b) Rising Public Expectations for Transparency and Accountability
Stakeholders now expect immediate and authentic responses from organisations in times of crisis.
Any attempt to withhold information or deflect responsibility can be quickly exposed and criticised.
Trust recovery is significantly harder if an organisation is perceived as dishonest or evasive.
📌 Statistic: A study by Edelman found that 65% of consumers say a company’s trustworthiness is more important than price when making a purchase decision. Crisis mismanagement directly erodes this trust.
c) Regulatory and Compliance Risks in Crisis Situations
Governments and industry regulators increasingly hold organisations accountable for how they manage crises.
Legal and regulatory frameworks demand that businesses communicate accurately and in a timely manner.
Failing to communicate effectively can result in regulatory penalties and long-term reputational consequences.
📌 Example: Optus Data Breach (2022, Australia) – Following a cyberattack that exposed millions of customers’ data, Optus initially failed to provide clear, timely communication. This led to widespread public outrage, political intervention and a class-action lawsuit filed against the company.
Businesses can avoid these risks with a robust Crisis Communication Plan, which ensures clear protocols for regulatory reporting and stakeholder engagement, available now for instant download in the CrisisCompass store.
2. The Business Impact of Poor Crisis Communication
Failing to manage crisis communications effectively doesn’t just damage reputation - it has tangible financial and operational consequences.
a) Financial Loss and Stock Price Decline
Companies that handle crises poorly often experience a sharp drop in share value.
Customers, investors, and stakeholders lose confidence, leading to long-term financial damage.
📌 Statistic: A study by Oxford Metrica found that companies that mismanage crises can lose up to 30% of their market value within weeks.
📌 Example: Boeing 737 MAX Crisis (2018-2019) – Following two fatal crashes (Lion Air Flight 610 and Ethiopian Airlines Flight 302) caused by software failures, Boeing’s delayed and unclear communication approach resulted in mass groundings of aircraft, loss of airline confidence and a $20 billion financial impact.
b) Long-Term Reputation Damage and Brand Erosion
A single poorly handled crisis can permanently damage a brand’s reputation.
Organisations that fail to communicate effectively may never fully recover in the eyes of stakeholders.
📌 Example: BP Deepwater Horizon Oil Spill (2010) – BP’s crisis communications failures, including downplaying the extent of the disaster, led to lasting reputational damage. Despite spending billions on clean-up and rebranding efforts, BP’s public perception remains tainted more than a decade later.
c) Internal Organisational Disruption
Employees lose confidence in leadership if they feel misled or uninformed during crises.
Poor crisis communications often lead to increased staff turnover and internal dysfunction.
3. Essential Elements of an Effective Crisis Communications Strategy
To navigate today’s high-risk crisis landscape, organisations must implement structured and proactive crisis communications strategies.
a) Pre-Crisis: Preparedness and Scenario Planning
Develop a Crisis Communications Plan that outlines key messaging strategies, media response protocols and spokesperson responsibilities.
Conduct crisis simulation exercises to test the readiness of the communications team.
Ensure media spokespeople undergo regular media training to handle high-pressure scenarios effectively.
📌 Statistic: Research by PWC found that 39% of organisations that had a crisis management plan in place before a crisis experienced revenue growth after recovery, compared to only 18% that didn’t.
b) During the Crisis: Transparent, Timely, and Authentic Messaging
Acknowledge the situation quickly before speculation takes over.
Provide factual and clear updates across all key communication channels.
Maintain a calm, empathetic and reassuring tone to maintain public trust.
📌 Example: Marriott International Data Breach (2018) – The company quickly acknowledged the breach affecting 500 million customers, provided clear guidance to affected users and established a dedicated response website. While the breach was severe, its rapid, transparent response helped maintain customer trust.
c) Post-Crisis: Reputation Recovery and Lessons Learned
Conduct a post-incident review to assess what worked and what failed.
Implement new safeguards to prevent future crises.
Communicate openly about the steps taken to rebuild trust with stakeholders.
📌 Example: New Zealand Government (2019 Christchurch Terror Attack) – Prime Minister Jacinda Ardern’s empathetic and decisive crisis response, including clear communication and immediate action, was globally praised. Her handling of the crisis set a new benchmark for leadership in difficult times.
Conclusion: Crisis Communications Is a Non-Negotiable Business Function
In an era where misinformation spreads faster than facts, where consumers expect radical transparency, and where poor crisis management can erase billions in value overnight, crisis communications is no longer an optional function - it is an essential business capability. Be prepared for the next crisis and download crisis-expert designed communication resources and templates, ready to go for your business - available from the CrisisCompass store.