Dealing with an Angry Public: The Mutual Gains Approach To Resolving Disputes - Softcover

Lawrence E. Susskind is Ford Professor of Urban and Environmental Planning at MIT, President of the Consensus Building Institute, and one of America's most experienced public dispute mediators.

CHAPTER 1: Introduction

There are many reasons for the public to be angry. Business and government leaders have covered up mistakes, concealed evidence of potential risks, made misleading statements, and often lied. Indeed, our leaders have fueled a rising tide of public distrust of both business and government by behaving in these ways. Consider the following:

* After oil poured from the torn hull of the Exxon Valdez, the public found that Exxon had actually reneged on the promises it had made when it was given the right to build the Alaskan pipeline. There was no adequate emergency response plan in place in case of a spill. Clean-up equipment, what little there was, was buried under several feet of snow. To make matters worse, the state had apparently known about these deficiencies since the early 1980s, but had not rectified the situation.

* Only after thousands of lawsuits had been file.d against Dow Corning did it come to light that the company had not only obtained, but had sponsored biological research indicating, as early as the 1960s, that the silicone used in breast implants might impair the immune system. All that time, the company claimed that silicone was biologically inert and wouldn't hurt anyone.

* Citizens speaking out at public meetings to discuss large-scale residential and industrial development projects, who oppose these projects on environmental and other grounds, have been slapped with libel suits by wealthy corporations trying to scare them into silence.

Wouldn't you be angry if you had been hurt, misled, or threatened?

A New Way of Interacting with the Public

We want to challenge the way that many corporations and government agencies interact with the public. Through numerous examples, detailed case studies, logical arguments, and plain common sense, we want to make a case for a better way of handling these interactions -- particularly with groups that are already angry because of the way they have, or think they have, been treated. More specifically, we offer suggestions for avoiding crises when the risks associated with new products or policies come to light, and for responding when mistakes -- even disasters -- have occurred. Furthermore, we suggest ways in which companies and government agencies ought to respond to those who are unalterably opposed to what they stand for.

Our intended audience includes senior executives of large and small companies who must deal with organized public-interest groups, midlevel managers who often face crises first hand, elected and appointed officials who must respond to unhappy constituents, and entrepreneurs who must take substantial risks to bring new products or ideas to market. Moving past the conventional wisdom, we want to suggest to those who advise these decision-makers -- attorneys, issue managers, public-relations consultants, and others -- that there is a different way to successfully interact with-indeed, to negotiate with -- their critics.

Why We All Should Be Concerned About Angry Publics

Some readers might ask, "Why should I care if people are angry? Dealing with them is the responsibility of my company's public relations people. I never have to deal with the public directly." Others might say, "Why do I care? At my company we have been putting out our product for thirty years and we haven't had a problem yet."

There are two important reasons why all of us need to be concerned about a society in which the public's concerns, fears, and anger are not adequately addressed. First, a continually angry public undermines American competitiveness in the international marketplace. That is, it can sap the productivity of corporations and government agencies who must spend inordinate amounts of time and human capital rehashing every action to defend each decision they make. Second, an angry public contributes to the erosion of confidence in our basic institutions. When important decisions must be made, especially in times of emergency, no one will give the relevant decisionmaker the benefit of the doubt if the public's trust has eroded.

They Undermine American Competitiveness

Because the battle lines are often drawn quickly and sharply in a crisis, companies and government agencies do not talk with those who are or might be angry at them. In turn, the public does not communicate its concerns directly to those responsible. Instead, the drama is enacted through the press, and soon thereafter in the courts. The public's anger is all too often translated into lawsuits. Between 1985 and 1991, 107,000 personal-injury suits, 48,000 asbestos liability suits, and almost 38,000 other product-liability suits were filed in the U.S. In 1991 alone, 1,500 product-liability suits were brought in federal district courts against Fortune 1000 companies. These Fortune 1000 companies were defendants in 95 percent of personal-injury cases. These do not include cases working their way through state courts, where a majority of such lawsuits are filed.

While attorneys and their firms gather data, haggle over procedural rules, and prepare for battle, dollars that could fund research and development, additional investment in infrastructure, or wage increases are eaten up in costly legal battles. Fighting fire with fire, so to speak, undercuts the profitability of business and adds to the cost of operations. It's been estimated that U.S. companies spend some $300 billion annually on litigation involving environmental claims, product-liability suits, class-action securities suits, medical malpractice suits, and Americans with Disabilities cases. Du Pont Chemical alone spends some $75 million annually to defend itself against plaintiffs who have brought suit against it.

Resources expended to fight an angry public cannot be used to solve other pressing problems. Money poured into defending past actions cannot be used to improve future performance. Embattled executives, managers, and their staffs are less likely to take risks, think creatively, and perform effectively if they are distracted from their primary responsibilities. Workers who doubt their employer's honesty are likely to work less hard, report more sick days, and generally be less invested in the success of their organization. Furthermore, because each unsuccessful attempt to address the public's concerns leads to increased skepticism and anger, executives, managers, and workers find themselves confronting the same problems in progressively more potent forms.

The expenditure of dollars and efforts to deal with an angry public are eventually folded into the costs of products. In the international marketplace, American products and services cost more. The Organization of Economic Cooperation and Development estimates that direct and indirect legal costs in 1987 amounted to 2.7 percent of the U.S. GDP, compared with only 0.5 to 0.7 percent of GDP for other OECD countries. In a 1994 survey, 800 U.S. CEOs and CFOs estimated that liability-prevention measures increased the price of products and services by at least 5 percent. One former commissioner of the Securities and Exchange Commission has stated that, despite attempts to attract foreign companies to list in the United States, such companies often refuse, citing fears of litigation.

arIn addition, lost time and effort, as well as ideas left untried, impose incalculable opportunity costs. Companies, cowed by the public's anger at others' mistakes, may be reluctant to introduce new products or ways of working. American companies lose their technological edge, and American workers lose the jobs that innovation provides. In an increasingly competitive and relentless international market, dealing poorly with an angry public means that American business and American workers lose out.

They Erode Public Confidence

It is not just business that loses out when the public is disenchanted or angry. Government loses, too. A public, frustrated or angry, loses faith in the institutions that govern everyday life and permit collective action. Americans expect the government to defend their country's interests abroad, pave highways, build bridges, prevent crime, provide for the needy, protect public health, and assure prosperity for workers and their families. In 1966, University of Michigan researchers asked Americans, "Do you trust the government in Washington to do what's right? How far do you trust it?" Seventy-six percent of those polled responded, "Yes; most or all of the time." In 1992, the same question was asked. Only 28 percent gave that response. People do not feel they can count on government -- regardless of which party is in power.

In anger, citizens have turned against their governing institutions and the individuals who represent those institutions. Thus, voters are easily rallied around such slogans as "Throw the bums out." In a 1994 New York Times/CBS poll, only 13 percent of the public said they believed that members of Congress deserved reelection. Referendums to limit the terms of those gridlocked in Washington were on the ballot in ten statewide elections and in the District of Columbia in 1994. Sixteen other states previously passed such referendums.

Thwarted by a paralyzed, partisan congress, a diminished presidency, and large and complex bureaucracies, citizens feel alienated and are tempted to "throw out" the whole system. Such anger, absent a response, may lead to smaller government and lower tax levels, but it will undoubtedly also lead to cutbacks in essential public services, rising costs associated with privatization, holes in the safety net meant to guarantee public protection to those least able to fend for themselves, enormous increases in the cost of insurance, and huge losses in the value of private property currently protected by regulation and government action.

There are other hidden costs, too. Fewer capable candidates want to run for office when there are insufficient resources set aside to do the job correctly. Consequently, fewer talented and competent individuals are likely to rise to positions of power and influence. As California is discovering, disenchantment expressed through term limits creates unintended consequences when cutbacks tip the balance of power in government to long-time civil servants and lobbyists who face no limits to their length of time on the job.

When anger is directed, in a blunderbuss fashion, at the way in which government operates, civil society quickly erodes. More citizens join the ranks of the health-care uninsured. More youths are randomly killed in the mean streets of our cities. Wages for the middle class remain stagnant. The gap between rich and poor increases. Government's past failures to listen to and address the concerns of its citizens has led to an unprecedented lack of involvement in the electoral process and paralysis in vision and action when we most need it.

We believe that dealing with an angry public honestly, seriously, decently, and effectively is good for both business and government. Government officials and business executives must find a better way to listen to the public's concerns, respond to criticism, and engage citizens and consumers. Conversation and negotiation, rather than a sales pitch and a fight, are what are required.

The Public Is Not Easily Appeased

Imagine, for a minute, that you are the hard-working, able plant manager of a chemical plant that produces, recycles, and disposes of chemicals used in the petroleum industry. One day your attorney tells you that it's time to renew the environmental permit for the incinerator at your factory. Since you have not changed your operations since the last time, your attorney assures you that the filing will be routine and that there is nothing to worry about. However, when you attend the usual perfunctory public meeting at the local school, fifty vocal and angry neighborhood residents appear. They ask you, in no uncertain terms, why there is an incinerator in their neighborhood, what they don't know about what you've been doing, and how many other secrets you've been keeping from them. Surprised? Shocked? Since you haven't done anything, you can't imagine why they are so angry. And not just angry, but angry at you!

Now suppose that none of those fifty citizens have ever been inside your plant. But they know that several workers have died in the last several years in the petrochemical industry, and that big petrochemical companies seem to continue on with their business without remorse. And almost every day, the residents read about or hear of new cancer-causing chemicals and how their manufacturers have either not known about their toxic effects, or worse, have covered up suspected risks.

Fueling the Fire

What faces the plant manager, or anyone in a similar position, is not merely dealing with those fifty angry people at that moment, but rather putting a process in motion that takes account of past mistakes by others. The public has been lied to, talked down to, ignored, and manipulated for so long that those fifty people are not likely to take seriously anything that plant manager says at the meeting. This is not necessarily the plant manager's fault. The public has seen business and government respond to their concerns in the past with slick advertising campaigns, denials of risk, misleading information, and false fronts. Now, anything that plant manager says, even if he or she is totally new to the situation, will be suspect.

Take Brown & Williamson Tobacco Company executives. They privately wrestled with how to deal with the health risks of smoking for over forty years while publicly denying that any such risks existed at all. During the 1950s and 1960s, the company sponsored research on how to minimize the risks of smoking through filters, additives, and delivery devices. However, in public the company denounced epidemiological studies linking nicotine to lung cancer, terming the studies merely "statistical" and "emotional." If you think times have changed, consider a group known as Restaurants for a Sensible Voluntary Policy. The group, with connections to the Tobacco Institute and a public relations firm that serves Philip Morris, claimed restaurants had lost 30 percent of their business from a smoking ban. However, a study of sales receipts commissioned by one municipality involved found restaurant revenues actually increased by 2.4 percent during the period the smoking ban was in effect, while a survey sponsored by Beverly Hills restaurants found a more modest drop of 6.7 percent.

Many past public-relations efforts have done less to address the concerns of the public and more to minimize and ignore those concerns. These efforts have succeeded in fueling citizen anger. For instance, when the Three Mile Island nuclear power plant malfunctioned in the spring of 1979, Metropolitan Edison (Met Ed) announced to the public, "The entire system was systematically shut down and will be out of service for about a week." According to the company, there were no recordings of significant levels of radiation nor were any expected. But within days, the Nuclear Regulatory Commission (NRC) announced detection of radiation off the plant site and in nearby Harrisburg. After that news, rush hour in Harrisburg ceased to exist as fear kept people at home. Even the NRC was engaged in spin control of its own. While the NRC had sufficient information to indicate that there was a potential for severe damage to the core of the reactor within hours of the accident, the Commission failed to notify either the citizens living in the vicinity of the plant or Jimmy Carter, the President of the United States.

It is no wonder, given the history of many pub...