Finance: The Superhero in Crisis Management

Racepoint Global

Written by Mark Jackson, SVP, Deputy Managing Director, Asia

A few days ago, I had the pleasure of presenting to a group of finance professionals. As I prepared for the session, one thought hounded me: what on earth could a communications specialist say that would be of any interest to accountants?

Gradually a theme emerged, inspired by the cataclysmic market capitalization implosion of United Airlines after the Dr. Dao incident in April. A little further research showed the remarkable parallels with Volkswagen after its crisis in 2016 when it was caught manipulating diesel emissions tests. Add to that the infamous Gerald Ratner incident in the early 90s, and you have three perfect examples of how a crisis can severely impact the financial fortunes of a company and, despite this, the finance function is rarely included in the response team.

But more than crisis management, I think the finance function has a critical part to play in crisis mitigation. In fact, I think finance can be a crisis superhero. Let me explain why.

In its work over the last few years, Forrester has shown a correlation between customer experience and revenue upside. In some industries, customer experience – driven by a whole host of factors from website to customer service staff to product quality – can drive an exponential increase in revenue.

In parallel with this research come a number of studies showing a decline in trust of large organizations. Service quality is a key constituent of trust with respondents around the world wanting better service quality and, on the whole, is an area where companies fail to deliver.

So the conundrum is this: not only are companies failing to exploit the opportunities to be had by improving customer experience, they’re failing to deliver on basic standards which is reducing public trust in them.

This creates an environment where crises are more likely to occur AND become public knowledge.

So, why have we got to this point? My feeling is that the elements that make up customer experience are deemed ‘nice-to-haves,’ and are often difficult to show true ROI. As a result, these are the line items that get cut in budget reviews. As someone who’s spent 25 years in communications, I’ve seen it happen more times than I care to remember.

But now we know the potential impact and opportunity cost of these budget cuts, isn’t it time we stopped looking at the ‘nice-to-haves’ as that and started looking at them as ‘must-haves’? The role of finance needs to evolve to become crisis superheroes.