Strategic Communications is not a “Cost Center”. We need to explain why.

31 March 2026

Nishant Saxena:

There is a story that repeats itself with depressing regularity in boardrooms around the world.

A company hits turbulence. Revenue dips. The CFO opens a spreadsheet and begins drawing lines through everything that doesn’t produce a widget, close a deal, or keep the lights on. Communications is usually one of the first things to go. It feels logical. It feels responsible. It feels, above all else, like the kind of disciplined thinking that serious people in serious organisations are supposed to do.

Then the crisis lands. A supply chain failure goes unexplained. A regulatory dispute festers in silence. An employee walks out the door and talks. And what follows is not a communications problem. It is a value destruction event, unfolding in slow motion, paid for by the very savings that seemed so prudent six months before.

The paradox is almost elegant in how consistently it repeats.

Strategic communications is perhaps the only function in modern business that is routinely cut at the precise moment its value is most visible. Not because people are foolish. But because we have failed, as an industry, to reframe what this function actually does.

We have allowed it to be defined by output: press releases issued, interviews arranged, columns written. When you define a function by its output, you invite people to price it like a commodity. And commodities get cut when budgets tighten.

The argument this piece is making is not complicated. It is this: strategic communications does not produce output. It produces equity. And like all equity, it compounds.

The Cost Centre Myth and the Numbers Behind It

The “cost centre” label is not just inaccurate. It is a category error. It confuses the mechanics of spending with the logic of investment.

When Gartner benchmarks communications ROI at 4.5 times investment, that is not a marketing number. That is the measured return on a function that shapes how every other investment in the business is perceived, trusted, and acted upon.

When Watson Wyatt’s multi-year research links highly effective internal communications to 47 per cent higher total shareholder returns, that is not a soft metric. That is the compounding effect of a workforce that understands direction, believes in leadership, and chooses to stay.

The numbers are consistent across research traditions. Companies with mature communications functions report revenue growth rates 2.5 times higher than peers who treat communications as tactical support. PR and earned media, when measured against business outcomes rather than impressions, consistently deliver returns of 300 to 500 percent.

This is precisely what AMEC’s measurement framework and the Barcelona Principles have insisted on since 2010: stop counting outputs, start counting outcomes. Organisations that have made that shift report returns that are not just defensible in a boardroom, they are compelling.

What It Actually Does

Strategic communications does three things that no other function can replicate.

It shapes how reality is received. A company can execute a flawless product launch and still lose market share if the narrative around the category is owned by a competitor. Execution and perception are not the same thing. Strategic communications is the function that manages the gap between them.

It builds stakeholder trust before you need it. Trust is not something you purchase in a crisis. It is something you deposit over time so that when the withdrawal moment comes, the account has reserves. Companies that went dark during the quiet years find themselves starting from zero when it matters most.

It aligns the organisation internally, which has direct financial consequences. McKinsey-linked research attributes 25 percent higher productivity to companies with effective internal communications. When employees understand strategy and feel informed enough to make decisions without escalating everything upward, that translates to speed. Speed translates to revenue.

The Mechanisms, Made Concrete

A technology company navigating regulatory headwinds does not merely need good lawyers. It needs a coherent narrative that distinguishes it from the companies being regulated against, reassures investors, and gives regulators a reason to treat it differently.

When that narrative is built well, deal pipelines improve. Because trust between organisations runs on the same currency as trust between people: clarity, consistency, and the sense that the other party understands what matters to you.

In the ESG context, sustainability communication has become a capital access question, not a reporting exercise. The green investments that organisations are now unlocking are not flowing toward better performance alone. They are flowing toward better communication of that performance, because that is how investors assess credibility before the auditors arrive.

The Failure Modes Are Instructive

Johnson & Johnson’s response to the Tylenol crisis in 1982 is still taught in business schools not because the company had a good product but because its communications response was swift, transparent, and publicly led by senior leadership. It preserved market value that, by any rational estimate, should have evaporated.

The inverse case, the slow, defensive non-response that characterises most crises, tells the same story in reverse: value destroyed not by the crisis itself, but by the silence around it.

More recently, the communications mismanagement around several high-profile AI product launches in 2024 and 2025 offered a sharp update to the same lesson. Companies that raced to announce capabilities without a coherent narrative around safety or accountability found themselves managing perception crises their engineering teams had done nothing to cause. In a media environment where scrutiny arrives faster than a press cycle, silence is not neutral. It is an invitation for others to fill the gap on your behalf.

What Leaders Need to Do Differently

Three things, specifically:

Embed communications in C-suite decision-making from the beginning, not at the end when the announcement is ready. The narrative around a decision shapes how it lands. Communications leaders should be in the room when strategy is formed, not when it is packaged.

Measure against business outcomes. Not impressions. Not clips. Revenue attribution, pipeline influence, employee engagement, retention rates. The Barcelona Principles established this standard more than a decade ago. Organisations still measuring by output volume are pricing their communications function as a cost centre because they are measuring it like one.

Build the internal case before the crisis. Dashboards that show communications attribution to business outcomes, presented quarterly to boards and finance leaders, change the conversation from “justify this budget” to “how do we scale this.” That is a different negotiation entirely.

The Argument, in Its Simplest Form

Research from the Ocean Tomo Intangible Asset Market Value Study shows that intangible assets now represent over 90 percent of the market value of S&P 500 companies. Strategic communications is one of the primary functions that builds, protects, and deploys that intangible capital.

Cutting it is not fiscal discipline. It is, in the most precise sense, a decision to disinvest in the majority of your organisation’s value.

The question for every PR and communications leader is not whether this argument is true. The data has settled that. The question is whether you are making this argument loudly enough, with enough evidence, to the people who control the budget.

That is, in the end, also a communications problem.

And it is yours to solve.

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Nishant Saxena writes for Times of India, Economic Times, AFP, and other publications, and works on strategic communications, institutional trust, and the intersection of narrative and organisational performance. He has founded Comm’fident, a strategic communications led management advisory and Climate Kahani, a unique climate change newswire in Hindi.