Search Peter’s website:

Managing Stakeholder Outrage:
A Mutual Gains Approach

In 1996, negotiation scholars Lawrence Susskind and Patrick Field published what they call “a mutual gains approach” for dealing with public disputes. They distilled this approach into six guiding principles:

1. Acknowledge the concerns of the other side.
2. Encourage joint fact-finding.
3. Offer contingent commitments to minimize impacts if they do occur, and promise to compensate knowable but unintended impacts.
4. Accept responsibility, admit mistakes, and share power.
5. Act in a trustworthy fashion at all times.
6. Focus on building long-term relationships.

The mutual gains approach provides a framework for organizing and applying strategies developed by risk communications consultant Peter M. Sandman for managing stakeholder outrage. In this essay, we will explore Sandman’s strategies through the prism of Susskind and Field’s mutual gains approach with the goal of creating a system for considering and applying Sandman’s specific strategies.

1.  Acknowledge the concerns of the other side

All too often, organizations caught in a risk controversy believe that steadfast consistency will prove persuasive. This is almost never true. This approach tends to position a company in the public mind as stubborn, self-righteous, and arrogant. Instead, the organization should pursue a far different strategy: acknowledging the uncertainty of its position. Executives should recognize the obvious ambiguities that are inherent to any risk controversy. Unfortunately, the knee-jerk reaction of a typical organization is to defend its reputation by attacking anyone who dares to question its competence. This is counterproductive. By adopting a war footing, the organization forces its outraged stakeholders to assume the role of adversaries and to escalate the conflict, often via their more-than-willing allies in the news media. “In the words of negotiation theory,” Susskind and Field say, “the players will be stuck in a zero-bargaining game – where the only common ground is the need to perpetuate the conflict.”

This automatically places the organization on what Sandman calls “the paradigmatic game of risk communication”: the Seesaw (2005, December 13). Sandman’s Seesaw describes a situation where a company assumes one extreme position in an argument and its critics instinctively take the other extreme position. Uncertainty often provides a seesaw in public disputes. “Whatever the situation, as a rule much is known and fairly predictable; and much is unknown and unpredictable,” Sandman says. “If you focus on how confident you are, your listeners are likely get on the other side of the Seesaw and feel that much less confident (2010, June 8).” Safety consultant Pamela (Ferrante) Walaski agrees: “Sometimes, ambivalence is the predominant emotion, and either audience members see both sides of the hazard or are so outraged by the hazard that they are initially unable to take a position. In the latter situation, in order to help manage their anxiety, audiences often choose to focus their attention on the side of the hazard that everyone else is ignoring (2011).”

In addition, we should recognize that uncertainty puts our organization in a dilemma. All of our stakeholders want us to be certain. They also want us to be correct. Plus, they want us to speak before we are certain we are correct.

“The wisest, most responsible course is usually to talk before you want to – that is, before you’re sure,” Sandman and risk communication colleague Jody Lanard say (August 14, 2011). “Many of the most important, actionable risk communication messages are uncertain messages. (Telling people what foods they should avoid while you try to figure out where the contamination is coming from is such a message.) If you’re going to communicate about risk, you will need the courage to talk when your information is uncertain. And you will need the skill to express uncertainty in ways that guide your audience’s decisions and minimize the cost (to you and your audience both) if you turn out mistaken. The communication of uncertainty is a central risk communication capability.”

Strategy 1a: Acknowledge the uncertainty

The key is to move away from the extreme ends of this seesaw and toward the fulcrum, Sandman says (2010, June 8). We simply must be willing to express our uncertainty. When we present ourselves as utterly confident and in command, our position predictably backfires. The problem isn’t just our tone, but also the messages we choose to convey. Using confident rhetoric may establish a comfort zone for the folks in the C-suites, but it almost always inflames outrage in a risk controversy. Sandman says, “Nine times in ten, changing ‘confident’ to ‘hopeful’ will improve your risk communication, help insulate you from attack (and lawsuits), and (the paradox of the Seesaw) inspire confidence in the rest of us (2010, June 8).”

Sellnow, Ulmer, Littlefield & Seeger agree: “Remaining equivocal in risk messages means acknowledging that uncertainty exists and framing messages within that inherent uncertainty. Messages that include statements such as ‘We do not yet have all the facts,’ and ‘Our understanding of these factors is always improving,’ can be used to preface a message. (2009)”

When caught in a risk controversy, Susskind says (1996), the successful leader will “acknowledge complexity rather than rushing to categorize situations in simplistic terms. These leaders are self-aware, able to see how others can contribute to both problems and solutions.” When trapped in a public dispute, acknowledging the uncertainty of the situation – especially in the initial stages of the dispute – is not a weakness; it is the strategy that is most likely to save the company and its leadership from the death of a thousand cuts.

What’s more, we must go beyond simply acknowledging and explaining our uncertainty, according to Sandman and Lanard. Why? “Because you will tend to soft-pedal your uncertainty and sound more confident than you are; because journalists will tend to drop your maybes and on-the-other-hands and quote the most confident-sounding things you say; because the certainty-seeking audience will tend to overlook the signals of uncertainty that have managed to wriggle through the journalistic filter – for all these reasons, “explaining” uncertainty isn’t enough. You need to “proclaim” uncertainty. You need to sell it, insist on it … or it will get lost” (Sandman and Lanard, August 14, 2011).

Strategy 1b: Stake out the middle ground

Companies tend to treat the court of public opinion as if it is a court of law. The two are completely different; the adversarial process – where one side strongly advocates its position, and its rival strongly advocates its position, and an arbiter decides who is correct based upon the facts of the case and the rule of law – simply does not work in a risk controversy. Failing to recognize this, a corporation’s lawyers (and, all too often, its public relations counsels) will encourage the CEO to employ what Susskind and Field (1996) call the “tricks of the trade”:

• Positioning your company’s beliefs in direct opposition to your adversaries’ beliefs.
• Framing the dispute in terms of a battle – us against them – and positing a worst-case scenario to illustrate what will happen if “they” win.
• Advocating your position to your stakeholders and the general public, emphasizing the logic and the virtue of your position.
• Challenging the credibility of your adversaries.
• Avoiding a dialogue with your adversaries, as this could legitimize their position in the public’s mind.

Executives are trained by education and conditioned by experience to view business as a war, whether in the marketplace or in the courtroom. The very language of business describes a never-ending struggle that involves strategies, tactics, campaigns, offenses, defenses, flanking maneuvers, guerrilla maneuvers, positions, intelligence, surveillance, espionage, weapons, targets, blitzes, ground troops, frontlines, psi-ops, black ops, camouflage, and poison pills. “Marketing is war,” consultants Al Ries and Jack Trout say (1997). “The true nature of marketing today is not serving the customer; it is outwitting, outflanking, outfighting your competition. In short, marketing is war where the enemy is the competition and the customer is the ground.”

In a risk controversy, however, we are dealing with what Sandman describes as an asymmetrical playing field. Communities will readily accept exaggeration from activists, government agencies, the news media, or anyone perceived as “acting in the public’s interest.” However, an organization caught in a risk controversy lacks this luxury. “In controversies, what we actually see are extreme poles, diametrically opposed narratives dueling for informational real estate, and not very much in between,” crisis management consultant Eric Dezenhall says (2014).

If your goal is to increase outrage, feel free to participate. If you want to calm the outrage, you must consider other options. “When you’re trying to diminish people’s outrage,” Sandman says, “exaggeration backfires. It follows that well-fought controversies are battles between the outrage-increasing extreme and the outrage-reducing middle (2002, February 21).” Organizations too often fall into the trap of treating a risk controversy as if is a typical marketing battlefield, taking the extreme position that the company is innocent and all stakeholder concerns are preposterous. It is the sort of argument that may work in a criminal or civil trial, but is doomed to fail in a dispute with outraged stakeholders.

In any risk controversy where one argument says that a given hazard is “terribly dangerous” and another argument says that the same hazard is “perfectly safe,” Sandman says (1998 ), “terribly dangerous” will always win. A corporation cannot win a battle of black vs. white, he says, but it can survive a battle of gray areas. Thus, the company’s strategy should be to move the conversation toward the gray areas and away from the extremes. The better strategy is to argue the hazard is at least potentially dangerous, and the organization is uncertain about its culpability, but is more than willing to work with stakeholders and their representatives to assuage their outrage. The organization should occupy this middle ground even if it is utterly innocent of all of the charges brought against it. In any risk controversy, the middle ground is the safer ground. “Remember that no matter how wrong the outraged public might be about the hazard, it is almost by definition right about the outrage,” Sandman says (1993 ). “Outraged people are not outraged for no reason. Finding the reasons for the outrage and taking them seriously is not ‘giving in.’ It is being honest and responsive. Remember, too, that the goal of risk communication is not to ‘win’ a war with the public. It’s your public, and in a real sense you can never win a war with it. Your goal is to negotiate a truce and then build a peace.”

Susskind and Field (1996) concur: “Efforts to vilify the ‘other side’ only encourage ‘them’ to vilify you, escalating the conflict.” The more prudent approach is to occupy the middle ground until we gather enough facts to support some reasonable conclusions. Then we should respond quickly, decisively and honorably. When it comes to surviving a public dispute, crisis consultant James E. Lukaszewski says, “Honorable action on the ground is always the crucial ingredient (2015).”

Strategy 1c: Co-opt the criticism

In practice, Sandman says, a company caught in a risk controversy should analyze its critics’ arguments, select the ones that are the most valid, and include them in the company’s messages to the public (2011, January 2). “Everything your audience already knows or feels, and everything your opposition is likely to find out and emphasize, belongs in your presentation,” Sandman says (1993 ). You want to argue your critics’ case as well as yours. “Your goal,” Sandman says, “is to leave your critics with nothing to say, except for things you have already admitted, and things that are flat-out lies (2011, January 2).” This, he says, requires us to discern which of our critics’ claims are totally false and which ones have “a germ of truth.” We must resist the urge to rebut anything we consider outright nonsense; instead, we should focus our energy entirely on validating our critics’ most cogent points. It may feel uncomfortable. It may feel unnatural. But this is how we calm community outrage and keep a bad situation from getting far worse.

2.  Encourage joint fact-finding

“Information gathered, analyzed, modeled, and carefully packaged behind closed doors may have no credibility when it appears, even if it is quite accurate,” Susskind and Field say (1996). “The answer is to open the doors wide and pursue fact-finding together. This means gathering data, analyzing data, and drawing conclusions together.” We should look for opportunities to build credibility by working in tandem with our critics to study the problem from our stakeholders’ perspective. That is, to study the outrage at least as much as the hazard.

Organizations too often depend upon their reputations in risk controversies. They believe their expertise and their past performance should be enough to persuade the public to trust their unilateral assessment of a risk. This is a common strategy among large organizations caught in public disputes. “But in a world of a skeptical public, ready with instant expertise and ready conspiracy theory, joint fact-finding is far more likely to lead to believable findings,” Susskind and Field say (1996).

Strategy 2: Encourage stakeholders to assess the situation

The much more effective option is to encourage third parties to assess the situation and report their findings to the public – without the company’s interference. “If you want your toxicology or epidemiology study to be credible,” Sandman says (2002, February 21), “don’t do it yourself (or hire it out) and then report the results. Do it collaboratively with your stakeholders. Set up the research so you couldn’t cheat even if you wanted to, and you will make it very hard for the rest of us to claim you cheated. (Of course you’ll also make it hard for you to cheat if you don’t like the results; that’s the point.)”

Joint fact-finding is effective in reducing community outrage because it strengthens your company’s credibility. As a bonus, it also tends to muzzle your critics because you have publicly invited them to contribute directly to the process of solving the problem. “Critics and conspiracy theorists thus face a tough choice,” Sandman says (2005, May 26 ). “Either they join you in collaborative fact-finding, or they marginalize themselves by refusing to participate.”

3.   Offer contingent commitments to minimize impacts if they do occur, and promise to compensate knowable but unintended impacts

A contingent commitment early in the process often goes a long way toward easing stakeholder outrage. Such commitments provide a clear signal to stakeholders that the organization believes in its message and is responding honorably. “If a company or an agency promise that something will not happen, or cannot happen, they should stand behind that promise with a contingent offer of compensation,” Susskind and Field say (1996).

In addition, contingent commitments could serve to manage potential liability in the long run. “It does make sense to minimize impacts up front, when they occur, rather than wait and pay a premium later,” Susskind and Field say (1996).

Strategy 3: Write a contract that addresses the concerns of your critics

Frequently, Sandman says (2002, October 28), a corporate client will insist that an outraged community is upset over the impossible, something that is against the laws of physics or chemistry. “My answer is always the same: Bond against it,” he says. “Promise it won’t happen, and stipulate a huge penalty if it does.”

Even when the concerns are possible, perhaps even probable, negotiating a binding contract between the organization and the stakeholders offers the organization the following benefits:

• A contract can move a project forward. “Even when a contract isn’t your only path forward,” Sandman says, “it may be your cheapest path forward – cheaper than the volatile mixture of litigation, political warfare, and reputational damage it can replace.”
• It can force our harshest critics to moderate their claims. “Most legal and political battles feed on exaggeration; those trying to stop you have every reason to exaggerate how bad things are, while you have every reason to exaggerate how good things are,” Sandman says. “Not so in negotiation. With a contract in the offing, they don’t dare claim your factory will emit huge amounts of dimethylmeatloaf, because they don’t want an agreement in which less-than-huge amounts are considered tolerable.”
• It can effectively reduce the community’s outrage over the long term: “By institutionalizing the prerogatives of the less powerful,” he says, “contracts make the power imbalance more tolerable, and thus more stable.”

Indeed, Sandman says, organizations should consider stakeholder contracts as an essential tool for mitigating community outrage: “The same reliability that contracts bring to your business relationships they can bring as well to your stakeholder relationships."

4.  Accept responsibility, admit mistakes, and share power

Of the six principles, this one is the most complex as well as the most contentious. It runs against the grain of both corporate culture and legal training, yet it goes to the essence of outrage management: If a company refuses to accept moral (but not necessarily legal) responsibility for the circumstances of a public dispute, or to admit to the mistakes that have already become public (and perhaps some that are still a secret), or to give its worst critics a role in its decision-making processes, then that company has little chance of reducing community outrage. That said, let’s examine each of the three components separately, along with Sandman’s strategies for dealing with them.

As Sandman writes, “By training and disposition, lawyers tend toward caution. They may recommend against an innovative approach to risk communication not because they can think of a legal drawback, but because the approach is innovative and there might be a legal drawback they cannot think of (1993 ).” In addition, lawyers may want the client to withhold facts that could damage its position in a court of law. However, in the court of public opinion, hiding the truth is a precarious position for any organization. “The costs of not telling the truth are simply too high,” Susskind and Field say. “In a society with a strong press, strong independent academic institutions and advocacy groups, and a skeptical public, most lies will eventually be found out (1996).” This is not to say an organization should accept the blame for everything thrown its way. “The mutual gains approach argues that companies and agencies should accept responsibility,” Susskind and Field (1996), “but it does not suggest that companies ought to assume blame indiscriminately.” However, if an organization’s goal is to calm stakeholder outrage and manage its effects, its leadership usually does well to err on the side of accepting slightly more blame than the company is due. “(The) solution is to bring communicators and lawyers together in the search for a strategy that meets the needs of both,” Sandman says (1993 ). ‘We want to be as open, collaborative, and accountable as possible,’ you tell your legal department. ‘Please help us make sure we don’t unduly increase our liability in the process’. When lawyers and communicators work together, it usually is possible to come up with a formula that meets the needs of both.”

Strategy 4a: Accept moral responsibility

Sandman’s frequent recommendation to his clients is to accept moral responsibility while not necessarily accepting legal liability. To make the distinction, Sandman uses the example of British Petroleum Co.’s 1990 oil spill near Huntington Beach, California: “The CEO was asked on television whether the spill was BP’s fault. He could have said a contract shipper messed up. Instead, he said: ‘Our lawyers tell us it is not our fault. But we feel like it is our fault, and we are going to act like it is our fault.’ If you have never heard of the Huntington Beach oil spill, that is precisely my point (1993 ).” Journalist Geoff Elliott, a correspondent for the newspaper The Australian, refers to this approach as “vintage Sandman … all contrition, but no admission of liability.” Elliott quotes Sandman as saying, “… there’s usually a way to figure out a way to take moral responsibility, which is what being forgiven calls for, without taking on liability that your attorneys don’t want you to take on. (2006, May 20).”

Strategy 4b: Practice relentless contrition

It’s important to fully understand the goal of outrage management. You are not waging war; you are waging peace. Your goal is to establish a truce with your critics so your company can get back to doing its job. Executives too often allow their egos to stand in the way of negotiating a truce. This damages credibility and prolongs the risk controversy. The far better approach for reducing outrage is to practice relentless contrition. This strategy plays upon yet another paradox of outrage management: The more you blame yourself, the less we blame you (Sandman, 2005, December 13). “This has been my advice to clients for decades: When you have messed up, apologize proactively and incessantly, until your stakeholders are sick of hearing it (not until you’re sick of saying it, which happens much sooner),” Sandman says. “As the risk communication seesaw dictates, the more often you apologize the more quickly your stakeholders will get sick of hearing it. (2012, September 18)”

Apology cannot be half-hearted. An insincere apology will only increase the outrage. For details on how to apologize successfully, see Strategy 6a: Seek forgiveness.

The admission of mistakes comes in two flavors. One is to admit the mistakes of the past; the other is to admit the problems of the present. Most corporations and their leaders are reluctant to do either, yet it is essential if the corporation plans to move beyond the community’s outrage and re-establish its “social license to operate” (also known as an SLO). “The challenge for corporations is that a social license to operate is a subjective concept, not a piece of paper,” Paul Klein, founder of the US consulting firm Impakt, says (2012, December 28). “There is no issuing organization or agency. The terms are different for every business and vary considerably, even within the same industry. Ultimately, SLO is based on who your stakeholders are and what they think of you.”

This can be a difficult, embarrassing and even painful process. “It is much harder to gain credibility than to lose it,” Susskind and Field say, “and it is much easier to destroy a reputation than to build one (1996).” Yet the process is wholly necessary. “The prerogative of deciding when you can put your mistakes behind you belongs to your stakeholders, not to you,” Sandman says (1998 ).

However, an organization caught in a risk controversy can greatly speed up this healing process by employing some of Sandman’s fundamental strategies for managing community outrage.

Strategy 4c: Acknowledge prior misbehavior.

Once again Sandman’s seesaw metaphor comes into play. Indeed, Sandman says (1998 ), the more often we bring up the sins of the past, and the more we apologize for them, the faster angry stakeholders will want to move on: “A company or industry that expects to be forgiven for what it has done in the past must own up to it first – not just once but often; not just factually but with visible contrition; not just when your critics raise the issue but proactively, raising it yourself until your critics are sick of hearing about it (Sandman, 2013, December 9).”

Strategy 4d: Acknowledge current problems.

“Omissions, distortions, and ‘spin control’ damage credibility nearly as much as outright lies,” Sandman says. “The only way to build credibility is to acknowledge problems – before you solve them, before you know if you will be able to solve them – going beyond mere honesty to ‘transparency (1998 ).’” This is a crucial point. Companies generally prefer to solve problems behind closed doors, and then to announce the results to the world wrapped in messages of reassurance, with the assumption that this will calm outrage. This almost never works because even the most effective solution tends to lack credibility with stakeholders when it is concocted outside of the stakeholders’ view and with no stakeholder participation. A better choice, Sandman says (2010, December 31), is to let your stakeholders watch your experts wrestle with the problem as your company gropes its way toward a solution. Better yet, share your dilemma. That is, let the stakeholders (through the representatives they trust) participate in finding a solution that mitigates the hazard while also softening their outrage (Sandman, 2006, April 20).

Unfortunately, the hierarchy of the modern organization is calibrated to do exactly the opposite. The company’s lawyers will argue for protecting information about its current problems, Susskind and Field say (1996). Its technical experts will argue for controlling the information. Its media relations department will argue for casting the information in the best possible light. “While each of these arguments has some merit, we believe that the advantages of full disclosure outweigh the disadvantages,” Susskind and Field say. “We advise: Share information.” They offer three reasons why:

• Disclosing information may save the public from additional injury, and thus may protect the company from further liability.
• It opens communication with your critics and your potential critics.
• It could inspire helpful advice that may lead to better solutions to the problem.

Strategy 4e: Prefer “stupid” to “evil”

When caught in a risk controversy, a company may do well to adopt yet another Sandman strategy, which he calls “the stupidity defense.”

Take the example of a company that has produced a safe product for decades, but decides to make what appears to be a small change in the product to save costs. This is not unusual. Companies are expected to find ways to improve profits. One way is to shave the cost of producing a product. But let’s say that this small change causes the product to become hazardous, and it turns out that the organization should have known better, but failed to keep up with the most current scientific knowledge. In this sort of risk controversy, the organization has two options. It can allow itself to be portrayed as evil: “The organization knew the change was dangerous, but did it anyway to make a little more money.” Or it can allow itself to be portrayed as stupid: “The organization made a dumb decision.”

The far better choice, Sandman says, is to claim stupidity and do it aggressively. That is, to say quite literally and publicly, “I can’t believe how dumb we were!” Why? Because the non-expert community genuinely believes that corporate evil is far more common than corporate incompetence. “Since the public has the wrong impression, the evil hypothesis will always prevail over the stupidity hypothesis unless the company claims stupidity aggressively,” Sandman says. “Even better than ‘I can’t believe how dumb we were!’ is ‘I know it looks like we must have done this on purpose, but… .’ Cop to the lesser offense, the one you really committed (2001, January 29).”

This is difficult for CEOs, many of whom would much prefer to play the role of Gordon Gekko than of Curly Howard. However, if your first priority is to protect shareholder value (as required by law), and not to protect your ego, then admitting your company has been stupid is far better than letting the public believe your company is evil. You have to be willing to say the words, “We were stupid.” If you want to manage the outrage, there is no other choice. “Unable to make themselves say the words, companies often fall back on less compelling explanations – it wasn’t really so bad; we’re the victim; we were unlucky; etc.,” Sandman says. “When these defenses fail, as they usually do, the public ends up concluding that corporate evil is the best explanation. That conclusion is devastating to the bottom line – but it is paradoxically less devastating to the self-esteem of corporate managers than the alternative, stupidity (2001, January 29).”

“Since knowledge is power, sharing such power seems threatening or frightening,” Susskind and Field say. “But the ability to share what we know with others so that they can make better informed judgments is essential to the mutual gains approach (1996).” Sandman agrees. “Although sharing control is anathema for everyone, the data are clear,” Sandman says. “You cannot keep all the control for yourself and simultaneously reassure other people. Outrage reduction requires finding ways to share control that you can live with (1993 ).”

Strategy 4f: Share control with third parties

Sharing control often means making your company accountable to third parties that are trusted by your stakeholders. “The higher the outrage, the less willing people are to leave the control in your hands,” Sandman says. “Look for ways to put the control elsewhere (or to show that it is already elsewhere). Let others – regulators, neighbors, activists – keep you honest and certify your good performance (2002, November).”

Strategy 4g: Look for opportunities to collaborate

Collaboration is another effective means of sharing power, especially when your organization is perceived as more powerful than it actually is. “The strongest self-interest case for power-sharing is when you have too little power to get your own way coercively, but still enough that others see you (and resent you) as powerful,” Sandman says. “When you look more powerful than you are, in other words, collaboration gains you more in reduced community outrage than it costs you in lost real power. This is precisely the position of industry, and to a lesser extent government, in risk controversies. In this situation, at least, power-sharing should be an attractive strategy (1993 ).”

5.  Act in a trustworthy fashion at all times

Susskind and Field say, “While the debate surrounding the concept of trust continues, we think the mechanics of trust-building are relatively straight-forward. Trust, or the lack of it, relates primarily to expectations (1996).” This requires the organization to shape the expectations of its stakeholders as well as those of the more general public, Susskind and Field say, primarily by adhering to two familiar maxims: 1.) “Say what you mean and mean what you say,” and 2.) “Honesty is the best policy.” Susskind and Field say, “If we camouflage our intentions, sugarcoat the truth, or spin the story to make it ‘sound better,’ we are not saying what we mean. Not only are reputations ruined by exaggerations and misstatements that must be retracted and contradicted later on, but trust, once lost, is almost impossible to regain.” Sellnow, Ulmer, Seeger, and Littlefield concur: “The failure to establish trust makes risk communication futile (2009).”

The core of the problem is that chief executives and their organizations rarely tell outright lies, Sandman says (2011, January 2). Rather than lie, organizations prefer to mislead, often by following the advice they receive from their attorneys or their public relations counsels. As evidence, Sandman points to the common news release. “It only takes one draft to tell the truth,” he says. “It only takes one draft to lie. But it takes eleven drafts to mislead.”

Thus, when an organization discovers it is caught in a risk controversy, its next actions are almost always predictable. Susskind and Field (1996) identify six common-but-ineffective tactics:

• The Stonewall, in which the organization goes silent. The goal is threefold. One, to avoid saying or doing anything that could increase the organization’s liability in court. Two, to avoid saying or doing anything that could increase attention from critics or journalists. Three, to remain perfectly still in the hope that the controversy just goes away. The problem is that going silent allows critics to frame the story for the news media, and thus for the coming public discourse, without challenge. By the time the organization decides to speak, the story has often metastasized in the public’s mind, rarely to the organization’s benefit.
• The Whitewash, in which the company attempts to downplay the concerns of its critics, or to minimize the company’s involvement in the controversy. There are two flaws. One, this approach exposes the company to charges that it is lying to the public. Two, as we have seen in Sandman’s analysis of outrage, this approach is very unlikely to succeed in calming an angry community. Indeed, a whitewash is far more likely to inflame outrage.
• The Smokescreen, in which the organization attempts to obscure or conceal the facts through a disinformation campaign, which is frequently spearheaded by third parties employed or funded by the organization. There’s an obvious problem with this tactic: Facts tend to eventually reveal themselves, especially in an age of social media. This leaves the organization looking clueless at best and devious at worst.
• The False Front, in which the organization or an industry enters a public debate under a false pretense, frequently by creating a front organization to conceal the company’s interest or its involvement. Again, this is a deceptive practice that, once revealed, crushes the organization’s credibility.
• The Block-and-Blame, in which the organization distances itself from the problem at hand, and attempts to shift the blame to another party, such as employees, customers, or regulators. When you hear a company cite the cause of a problem as “human failure,” you are witnessing the block-and-blame. The downside is fairly obvious: Far more stakeholders are likely to empathize with employees, customers, or even regulators than with a large company and its management team.
• The Slash-and-Burn, in which the company declares war on its critics, and attempts to discredit them or intimidate them into submission. Companies who engage in this tactic are far more likely to be viewed as bullies than champions, and no one trusts a bully.

What all these tactics have in common is a calculated attempt to mislead. This makes these tactics especially dangerous to employ in the 21st century. As Susskind and Field say, “In an open society, such as the United States, with local newspapers, radio, national television, worldwide cable network news, computer networks, and the Internet, information is simply harder and harder to conceal (1996).”

However, we must recognize that this need to remain trustworthy often creates a dilemma for any organization caught in a risk controversy.

First, even if the company acts in a forthright fashion, there’s a good chance an outraged community will fail to give the company credit for its forthrightness; suspicions are likely to linger that the company has withheld information or misled the community is some other nefarious way.

Second, even the most honest CEOs are held captive by their companies’ histories as well as their cultures. Even if we act today in a transparent and trustworthy way, odds are that our company acted in a translucent and dishonest way at some time in its recent past. There’s also a chance that, even if our top leadership directs every employee to act transparently and honestly, someone somewhere down the line will fail to get the message, or will misinterpret it, or will just ignore it. For the rank-and-file worker, the safest strategy is to avoid cooperating with any busybodies from outside the company. When caught in a risk controversy, the survival instinct often compels the frontline worker to mislead.

Third, unlike in a court of law, evidence rarely saves the day in the court of public opinion. “Disagreements about risk should not be expected to evaporate in the presence of ‘evidence,’” psychologist and risk-perception researcher Paul Slovic says in his co-authored paper, "Rating the Risks" (2000, p. 104). “Definitive evidence, particularly about rare hazards, is difficult to obtain. Weaker information is likely to be interpreted in a way that reinforces existing beliefs.”

Strategy 5: Emphasize accountability over trustworthiness.

Sandman identifies two reasons why accountability reduces stakeholder outrage. “It replaces the need for trust (and paradoxically increases trust); and it offers a decent halfway measure in the direction of sharing control. … The great paradox of trust is that the more you ask for it, the less you get it. Instead of asking to be trusted, therefore, smart organizations look for ways to be accountable – that is, ways to be able to prove what they say; ways to have neutrals or, better yet, opponents looking over their shoulder and certifying their integrity; ways not to need to be trusted (2002, October 28).”

According to Sandman, making yourself accountable offers the organization at least two benefits:

• First, accountability can make you a smaller target. When stakeholders look for someone to blame for their outrage, they tend to look for someone big. An organization offers a big target for their anger. “Accountability makes you smaller,” Sandman says. “It makes the people you are accountable to bigger.” Unfortunately, most business cultures suffer from the need to act big, often bigger than they really are, and that reflex can prove disastrous during a risk controversy. “There are times and places in which it is useful for a company to act big,” Sandman says. “But the middle of a controversy you hope to defuse isn’t one of them. In managing controversy, your goal should almost always be to make as small a target as you can – to avoid becoming a lightning rod for outrage…. ”
• Second, accountability can make your more credible. The only reason a for-profit corporation does “the right thing” is because it is forced to do the right thing, either by governmental power or by community outrage. That’s the way capitalism works. Companies are required by law to focus on sustaining long-term profitability and are reined in only by the rules set by government or by the outrage expressed by stakeholders. There is nothing wrong with this. It’s the way the game is played. So, when a company under pressure from its stakeholders claims that it did the right thing on its own, it loses credibility. One of the best ways to gain credibility is to become openly accountable to stakeholders. In other words, give away the credit. Or better yet, Sandman says, let your most extreme, activist stakeholders take the credit for setting you straight. “There are only two possible niches activists can fill,” Sandman says. “Either they announce that you are doing the wrong thing, or they announce that they have succeeded in making you do the right thing. Your most important decision with respect to the activists is which of these two roles you prefer for them. And the essence of my argument is that the second role is a lot more profitable for you than the first.” (You will find more about the value of giving away credit under Strategy 6b below.)

The gold standard for accountability is the contract with stakeholders, as described in Strategy 3 above. As to whom you should be accountable to, your organization will be more comfortable with a third party, preferably a team of subject matter experts. But remember, we’re dealing with outraged stakeholders who will distrust experts almost as much as they distrust your organization. The far more effective choice for reducing outrage among stakeholders also happens to be the most uncomfortable for your executives, Sandman says. And that’s to invite your most extreme critics to help keep you accountable. “There is no need to choose between accountability to neutral third parties and accountability to extremists,” Sandman says (2002, October 28). “You can do both: Bring in a neutral third party as consultant, then tell your consultant to be as accountable to the extremists as to you.”

6.  Focus on building long-term relationships

This principle runs counter to the culture of the typical 21st century organization. “With the emphasis on quarterly reports, annual shareholder meetings, short-term stock market fluctuations, shifts in monthly cost-of-living and balance-of-trade reports, and the latest opinion polls, managers in both the public and private sector seem utterly unable to look beyond their immediate situations,” Susskind and Field say (1996). “… While the costs of not paying attention to long-term relationships may not, in the short term, be obvious, over time disgruntled customers, frustrated constituents, and an angry public can and will buy elsewhere.”

So how does an organization nurture these long-term relationships during the heat of the controversy? Sandman offers three strategies for outrage reduction that could help.

Strategy 6a: Seek forgiveness

The first is the most fundamental of all outrage-reduction strategies: Suck it up and just say you are sorry. In virtually any controversy, Sandman says, “What you need to do is figure out what you did do, so you can say you’re sorry for that and promise not to do it again (Elliot, 2006, May 20).”

Apology is much more than a formality. The truth is that attaining absolution from an outraged community of stakeholders is far more complex than just saying, “We’re sorry.” To maximize the effectiveness of an apology, an organization must undergo the full process of forgiveness. Sandman (1993 ) identifies five steps to this process. First, we must confess our sins. That is, admit what we did wrong. Second, we must say we are sorry for our sins. Third, we must compensate the victims. Fourth, we must come up with a plan that will prevent us from sinning again. Fifth, we must undergo penance: a public humiliation that, Sandman says, “symbolizes that you screwed up and you know it.” All of that is difficult enough for a proud corporation to endure, but it’s also vital to allow outraged stakeholders to choose a just compensation, to collaborate with us on the prevention plan, and to select our humiliation from a short menu of options. If we manage the process well, our public apologies or our efforts to “make things right” may serve double duty as our penance. However, if we fail to allow our stakeholders to have a substantial say in this process, or if we fail to frame our penance as penance, they are unlikely to forgive us. “Without a penance,” Sandman (2001) says, “the process of apologizing isn’t over, the world isn’t working right, and we’re not ready to forgive you.” Without forgiveness, there can be no long-term relationship of any real value. If we want to get past a risk controversy, we must undergo penance; the only real question is, will the penance be on our terms or on the terms of others?

Strategy 6b: Give away the credit

Let your critics take credit for every change you make at their behest, no matter how substantial or trivial. Give them every opportunity to crow to the public about their victory. The more we give away the credit, the more we calm the outrage. All too often, organizations fail to employ this fundamental strategy, and frequently pay for it later. Sandman describes it this way: “Your organization is under pressure to do X. You don’t want to do X. You’d much rather do Y. But stakeholder outrage is high and rising, and it’s clear that Y won’t fly. Your ‘social license to operate’ is at stake, you explain to top management through gritted teeth. ‘Much as we all wish things were otherwise, we have no practical choice but to switch from Y to X.’ So you switch. And then you issue your public announcement. No mention there of social license to operate, of public pressure, of your long history of preferring Y. Nope. The announcement begins: ‘In keeping with our deep and longstanding commitment to X, we are proud to announce that… .’ (2006, December 12).” This is a huge mistake. It is crucial for the organization to admit to stakeholders that it changed course because it came under intense pressure to do so. “Saying so is more honest than claiming you had a vision,” Sandman says (1993 ). “It is also more credible. And it is more conducive to forgiveness. Those who forced you to change have earned their victory, and it prolongs the battle to pretend otherwise.”

Strategy 6c: Position your organization as responsive – and not necessarily responsible.

“Corporate responsibility” is more than a popular concept; it is a global movement. But does it make any sense? By law, a US corporation is a sociopath; it must worry only about benefiting its shareholders. In turn, the US government passes laws and creates regulations to put controls on the corporation’s sociopathic tendencies.

Without government limitations, corporations not only could – but would be legally required – to wreak unlimited havoc on their employees, their competitors, their customers, their vendors, and the environment, to name just a few potential victims (Bakan, 2012). But here’s the tradeoff: The current relationship between a corporation and its stakeholders makes “corporate responsibility” all but impossible.

For example, Sandman says, if a corporation announced, “We love fish more than profits,” and ran its business accordingly, its leadership would soon experience massive legal trouble. “Such a company would be malfeasant,” he says. “Companies have a fiduciary responsibility to their shareholders to maximize long-term sustainable profitability within the law. That’s true not just in a bastion of cowboy capitalism like the United States, but even in more socialist-leaning but still capitalist societies in the rest of the world. Individual shareholders may well decide to spend the profits from their XYZ Corp. investment on fish protection. Government may well decide to reduce everybody’s profits by requiring fish protection. But if the XYZ Corp. voluntarily reduces its shareholders’ profits for the sake of fish protection, without expecting any payoff for doing so, it is failing in its legal and moral obligation to those shareholders. It is vulnerable to a shareholder lawsuit. At the very least it is ripe for a takeover attempt by a less misguidedly philanthropic competitor (2006, December 12).” As a result, a company can provide only as much protection for fish as its society demands. It must deliver as much protection as required by law, but not much more, Sandman says.

Thus, it makes little sense for any for-profit corporation to claim that it is more responsible than is required by the laws of the nation in which it operates. First, it isn’t true. Second, no one believes it anyway. Third, doing so contributes to the widespread misconception that corporations should act more responsibly than the law requires (a concept that, Sandman points out, could eventually strangle capitalism). At best, Sandman says, any statement of corporate responsibility is a white lie, like: “We really loved the fruitcake you sent for Christmas.” No sensible person believes the white lie, but no sensible person is particularly offended by it, either.

The better – and far more believable – option, Sandman says, is for an organization to say, “We took these actions because our stakeholders said we should. We may not agree with their concerns, but we believed it was important for the future of our company to be responsive to their concerns.” In other words, you changed your ways because you are responsive, and not necessarily because you are responsible. The difference, Sandman says, is who sets the agenda. “Responsible means you do what you think is right,” Sandman says. “Responsive means you do what your stakeholders think is right, that you are listening to, attending to your stakeholders. You have noticed that if you give your stakeholders what they want, you prosper, and if you deny your stakeholders what they want, you suffer. And you have therefore decided, as a business decision, to give your stakeholders what they want whenever you can to be as responsive as you can (2011, January 2).” Note that Sandman’s responsiveness strategy is very closely aligned with the strategy of giving away the credit. When you take credit for your critics’ ideas, Sandman says, you are wasting an opportunity to lessen the outrage among your stakeholders. Give them the credit whenever you can and be satisfied with becoming better known as a responsive company.

This is not to say that a company should give in to all pressure all the time. Sometimes you cannot do what your critics want you to do because it would put you out of business, or it would violate your industry’s ethics code, or it would contravene a fundamental principle that you cannot bring yourself to break. You still have options, Sandman says (2006, December 12). You might look for an alternative action that substantially meets your critics’ concerns while meeting your needs as well. Or, you could call a meeting of stakeholders that includes your critics and those who oppose your critics’ demands, thus giving all sides a chance to better understand the complex web of pressures you are negotiating. You might even decide that the best option is to fight back, but your best strategic option is frequently just to surrender and do what your stakeholders want you to do.

At the very least, the executive team should consider that option by asking: Does giving in to our critics on this specific point hurt our bottom line or just our egos? “I’m not advocating giving in to pressure in all circumstances,” Sandman says. “I am advocating saying you’re giving in to pressure when that’s what you have decided to do.”

Winning without fighting: a grand strategy

As the Chinese military strategist Sun Tzu says, “To win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill (Griffith, 1971).” How do we accomplish this in the context of a risk controversy?

• We stake out the middle ground in the risk controversy.
• We acknowledge the complexity of the situation and the possibility that we are to blame.
• We avoid over-reassurances to the public.
• We acknowledge our uncertainty as well as the concerns of our most acerbic critics.
• We assume moral responsibility without taking legal responsibility.
• We apologize for our misbehavior, past or present.
• We aim to be truthful and candid.
• We give our harshest critics every opportunity to declare themselves victorious – because that is the shortest and clearest path to putting the dispute to rest and restoring our reputation.
• We help our internal stakeholders to manage their own outrage by keeping them informed as we pursue this strategy.
• If necessary, we employ the stupidity defense, with the understanding that it is better for our organization to be portrayed as stupid than as evil.
• Above all, we very publicly do all we can to protect the community, even if it turns out we are not at all responsible for the problem.

As Sandman says, “… well-fought controversies are battles between the outrage-increasing extreme and the outrage-reducing middle (2002, February 21).”

The strategies of outrage management allow our organization to control the outrage-reducing middle to our benefit. It’s not the most comfortable approach, but it is the most effective.

SOURCES

Bakan, J. (2012). The corporation: The pathological pursuit of profit and power. Hachette UK.

Dezenhall, E. (2014). Glass Jaw: A Manifesto for Defending Fragile Reputations in an Age of Instant Scandal. New York City: Twelve.

Elliott, Geoff (2006, May 20). Master of sorry management. The Australian. Retrieved on January 11, 2019, from http://www.psandman.com/articles/ausoil12.htm.

Klein, Paul (2012, December 28). Three Ways to Secure Your Social License to Operate in 2013. Forbes.com. Retrieved on January 11, 2019.

Lukaszewski, J. (2013). Lukaszewski on Crisis Communication. Brookfield, Conn.: Rothstein Associates Inc.

Lukaszewski, J. (July/August/September 1996). Selective Engagement. Retrieved April 2, 2015.

Lundgren, R. E., & McMakin, A. H. (2018). Risk communication: A handbook for communicating environmental, safety, and health risks. John Wiley & Sons. Sixth edition.

Ries, A., & Trout, J. (1997). Marketing Warfare. New York City: McGraw-Hill.

Sandman, P. (2002, October 28). Accountability. Retrieved March 20, 2015, from http://www.psandman.com/col/account.htm.

Sandman, P. (2001, July 14). Advice for President Bartlet: Riding the Seesaw. Retrieved March 13, 2015, from http://www.psandman.com/col/westwing.htm.

Sandman, P. (2011, January 2). Components of Outrage and a Sample Outrage Assessment. Retrieved February 26, 2015, from https://vimeo.com/18367074.

Sandman, P. (2002, November). Coping with Chemical Outrage. Retrieved January 11, 2019, from http://www.psandman.com/articles/careline.htm.

Sandman, P. (2004, April 15). Crisis Communication: A Very Quick Introduction. Retrieved June 9, 2016, from http://www.psandman.com/col/crisis.htm.

Sandman, P. (2010, June 8). Empathic Communication in High-Stress Situations. Retrieved March 13, 2015, from http://www.psandman.com/col/empathy2.htm.

Sandman, P. (2011, January 2). First Outrage Management Strategy: Stake out the Middle. Retrieved March 18, 2015, from https://vimeo.com/18373982.

Sandman, P. (2017, May 28). Four Ways to Respond to Criticism: Why “Acknowledge and Improve” is Usually Wiser than “Low Profile,” “Defend,” or “Counterattack.” Retrieved January 17, 2018, from http://www.psandman.com/articles/mulesing.htm.

Sandman, P. (2013, December 9), Fracking Risk Communications, Retrieved March 20, 2015, from http://www.psandman.com/col/fracking.htm.

Sandman, P. (2005, December 13). Games Risk Communicators Play: Follow-the-Leader, Echo, Donkey, and Seesaw. Retrieved March 13, 2015, from http://www.psandman.com/col/games.htm.

Sandman, P. (2006, December 12). Giving Away the Credit: Managing Risk Controversies by Claiming You're Responsive (though maybe not responsible). Retrieved April 1, 2015, from http://www.psandman.com/col/credit.htm.

Sandman, P. (2006, April 20). How Safe is Safe Enough: Sharing the Dilemma. Retrieved March 26, 2015, from http://www.psandman.com/col/enough.htm.

Sandman, P. (2002, February 21). Laundry List of 50 Outrage Reducers. Retrieved March 19, 2015, from http://www.psandman.com/col/laundry.htm.

Sandman, P. (1998). Reducing Outrage: Six Principal Strategies. Retrieved March 18, 2015, from http://www.psandman.com/handouts/sand42.pdf.

Sandman, P. (1993). Responding to Community Outrage: Strategies for Effective Risk Communication. Fairfax, Va.: American Industrial Hygiene Association. Retrieved January 11, 2019, from http://petersandman.com/media/RespondingtoCommunityOutrage.pdf.

Sandman, P. (2001, May 4). Saying You’re Sorry. Retrieved April 1, 2015, from http://www.psandman.com/col/sorry.htm.

Sandman, P. (2003, June 12). Stakeholders. Retrieved April 28, 2016, from http://www.psandman.com/col/stakeh.htm.

Sandman, P. (2001, January 29). The Stupidity Defense. Retrieved March 26, 2015 from http://www.psandman.com/col/stupid.htm.

Sandman, P. Talking about “What Happened”: Post-Event Risk Communication (Part 2). Industrial Safety and Hygiene News: 26 May 2005. Retrieved January 11, 2019, http://www.psandman.com/articles/ishn-pt2.pdf .

Sandman, P. (2010, December 31). Third Outrage Management Strategy: Acknowledge Current Problems. Retrieved March 26, 2015, from https://vimeo.com/18326386.

Sandman, P. (1991). Twelve Principal Outrage Components. Retrieved February 27, 2015, from http://www.psandman.com/handouts/sand58.pdf.

Sandman, P. (2012, September 18). What should Penn State say in alumni fundraising appeals about its child molesting scandal? Retrieved January 11, 2019, from http://www.psandman.com/gst2012.htm#PennState.

Sandman, P. (2012, April 17). Why do so many people still refuse to eat seafood from the Gulf of Mexico? Retrieved March 2, 2015, from http://www.psandman.com/articles/seafood.htm.

Sandman, P., and V. Burrow (2005, June 28). The Role of Apologizing in Crisis Situations, Organizational Preparedness for Reputational Crises, and How an Apology Might Have Affected Australia’s AWB Controversy. Accessed June 8, 2016.

Sandman, P., and J. Lanard (2001, August 14). Explaining and Proclaiming Uncertainty: Risk Communication Lesson from Germany’s Deadly E. coli Outbreak. Accessed November 15, 2016.

Sandman, P. and J. Lanard (2004, March 18). Misleading toward the Truth: The U.S. Department of Agriculture Mishandles Mad Cow Risk Communication. Accessed February 14, 2018.

Sandman, P. & Vigileos, G. (2010, December 10). Prospects for persuading activists and public health officials to be more honest. Retrieved March 1, 2015, from http://www.psandman.com/gst2010.htm#dishonesty.

Sellnow, T. L., R. R. Ulmer, M. W. Seeger, & R. S. Littlefield (2009). Effective risk communication: A message-centered approach. Springer Science & Business Media.

Slovic, P. E. (2000). The perception of risk. Earthscan Publications.

Sun Tzu and S.B. Griffith (1971). The Art of War. Oxford University Press.

Susskind, L. and P. Field (1996). Dealing with an angry public: The mutual gains approach to resolving disputes. Simon and Schuster.

Walaski, P. (2011). Risk and Crisis Communication: Methods and Messages. Wiley.

Copyright © 2019 by W.O. Cawley Jr.

Contact information page:    Peter M. Sandman