GroundFloor Media & CenterTable Blog

emergency-planWe live in an age of instant analysis, a world where our Attention Deficit Disorder culture means that we rarely take the time necessary to understand the long-term impacts of current events.

That certainly applies to our political landscape, but it also applies to the business world. In an environment in which investors only care about the next quarter’s earnings, it can be hard to step back and focus on the long-term implications of opportunities and challenges.

This is especially true in the world of public relations. Each December, I present a list of the year’s biggest PR disasters. Some are almost a year old, and others are only months – or even days – old. Truth be told, that is not nearly enough distance to understand what the full impact will be on a company.

Having something negative happen is just one piece of a complex public relations puzzle. How quickly and effectively a company responds to that challenge can be as or even more important than the actual issue that has arisen. Equally important is how much trust a company has earned in the past helping insulate it from long-term damage.

The Value of Responding to a Crisis Quickly and Effectively

Southwest Airlines is a great example. It recently announced that it lost about $100 million in revenue due to a decline in ticket sales because of the death of one of its passengers. That is an enormous short-term figure, but what is the long-term damage to the company? From an investor perspective, the company’s stock dropped a little more than 7 percent in the aftermath of the incident, but it has rebounded and is now up more than 12 percent compared to where it was before the incident.

Southwest suffered a “PR disaster,” but because it responded effectively and had already earned trust from the flying public, it has weathered the situation well. The management team may be on a shorter leash, but even $100 million in lost revenue is a momentary blip, at least to long-term investors.

Next time you hear that a company has suffered a PR disaster, understand the context. Usually it means that a company has experienced a terrible incident. It doesn’t mean that all hope is lost. Philosophers have argued that the measure of a person is not whether they face challenges, but in how they respond. That is true with companies as well. Like Southwest, Toyota, Sony, Netflix, Apple, Volkswagen, Wells Fargo and United have all suffered “PR disasters” in the recent past, and all have managed to climb their way back. That is the power of having a strong crisis plan and responding quickly and effectively.

Jeremy Story is a Vice President at GroundFloor Media, where he co-leads the firm’s Crisis, Reputation and Issues Management practice. He has more than 20 years of experience helping companies ranging from start-ups to the Fortune 100 prepare for, manage, and recover from crisis issues.

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