What’s AIG Got to do with Leading Change?

Saturday, October 11th, 2008

Or another title: Resistance Fueled by Outrage.

On Monday, the former CEO and Chairman of AIG appeared before a House committee. During their testimonial, a congressman revealed that AIG had spent some $440K on a fancy retreat a few days after the US government gave the company billions of dollars. On Tuesday, Senator Obama mentioned that retreat during the debate.
On Thursday MSNBC announced that AIG claimed that the retreat was not for AIG executives, but for top sales people. One of the MSNBC commentators said that this was common practice. Salespeople loved these events. And it was a good way to keep salespeople who could just as easily promote products of their competitors in the fold. That evening, a Thursday edition of Saturday Night Live mocked the retreat.

AIG executives should have seen it coming. Someone should have said, “Wait a minute, we got a problem here. If we go ahead with the retreat, it will make us look really bad. Should we go ahead?”
Maybe they would have decided that the expense was legitimate and important. If so, they should have come up with a plan for announcing this prior to the event.

Once people are outraged, retractions sound weak. And Saturday Night Live’s case only accented those feelings.

Leaders in organizations would do well to pay attention to this phenomenon if they want to avoid resistance to change fueled by outrage.