(April 6, 2009) — Perhaps the plastics industry can learn a useful lesson from the AIG bonus mess relating to strategy for how to (or how not to) deal with a crisis. I'll let Rita McGrath lay the groundwork.
McGrath, a professor at Columbia Business School, contributed an excellent column recently to a Harvard Business Publishing blog. Her piece was titled AIG: Why the Facts Don't Matter. In it, she builds a case for the power of symbolism and emotion:
At Columbia Business School, we teach executives that symbols (such as a big bonus amidst a bailout, or corporate jets ferrying executives to ask for handouts) have meaning beyond their inherent substance. Here's the problem: When faced with a symbolic, emotional challenge, the knee-jerk response of most red-blooded managers is to counter the issue with substance, with the facts. So in the case of AIG, we are told that the bonuses were contractual obligations, that they were essential to keep the talent necessary to wind down complex positions. And, even that without them, the government bailout funds would be permanently lost because the company would not be able to function.
The problem, McGrath continues, is that when one is facing a symbolic challenge, facts often do not matter. She suggests that executives either don't grasp this or tend to steer away from injecting their own emotion into emotional issues.
So how is this relevant to the plastics industry? Consider the penchant of some in the industry for citing scientific test data or academic research studies to try to counter emotionally charged arguments that certain plastics are responsible for anything from endangering babies (through migration/ingestion of chemical ingredients) or killing cuddly or feathery wildlife (via strangulation with six-pack rings or the ingestion of plastics waste).
A classic example involves McDonalds Corp.'s decision in 1990 to abandon the polystyrene-foam burger box in favor of coated-paper packaging which, by many accounts offered sub-par performance and little if any real environmental benefit. In the end, McDonald's caved, in large part because customers were demonstrating outside its restaurants against the foam clamshell, prompting negative publicity and stoking emotional fires.
Grass-roots environmental and special-interest groups, some staffed by only a handful of people, frequently are much better than well-heeled industries at shaping public opinion. Industry officials often feel frustrated and sometimes downright angry that their facts aren't enough to win the argument. McGrath would say they are missing the point.
To counter a symbolic problem, you have to take on the meaning inherent in the symbolism, and to understand why the issue is triggering such an emotional backlash. You'll never succeed arguing substance when the real problem is a problem of emotional meaning. You need an emotional response that defuses the characteristics of the mess and meets the public where it lives. You need to show empathy and have a sense of where the wounded parties are coming from. Most of all, as a leader, you need to frame the issues in ways that further your agenda.
The now-defunct American Plastics Council made an effective attempt to meet the public where it lives with its highly visible Plastics Make It Possible advertising campaign. That effort was scrapped in 2005 in favor of the American Chemistry Council's Essential2 ad campaign that focuses on how chemistry makes life better for consumers through a multitude of products, including many made from plastics. This is a solid approach.
But such battles need to be fought daily on local, state and regional levels, and many officials involved in those efforts still fail to grasp the tactics of emotional warfare.
In this context, perhaps the AIG and auto-industry bailout incidents can serve a useful, instructive purpose.
Grace is editor and associate publisher of Plastics News.