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Why Emotions Are as “Soft” as Gold Bars (Making Money)

May 20, 2011 • Editors' Pick, Emerging Ideas, INNOVATION, Marketing & Consumers, Strategic Spotlight, STRATEGY & MANAGEMENT

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By Dan Hill

For brand-oriented consumers and leaders as well as your average worker, emotions matter. Emotions are central, not peripheral, to both marketplace and workplace behavior.

For far too long in the business world, emotions have been concealed behind closed doors and ignored in favor of rationality and efficiency. But as companies are forced to forge emotional connections in this age of commoditization and often disillusioned, disaffected employees, emotions are now front-and-center, as they always should have been. That’s because breakthroughs in brain science have confirmed that people are primarily emotional decision-makers. We’re not really like Mr. Spock from Star Trek; we’re more like Homer Simpson. We make choices out of greed, altruism, fear, anger and all sorts of other emotional dynamics that don’t show up on a spreadsheet, but most certainly drive behavior.

How could it be otherwise when we have not just one brain, but actually three: much older sensory and emotional brains that enjoy first-mover advantage in terms of how the brain functions, and then a newer but less influential rational, cognitively-oriented brain. To get yourself oriented, consider these points. First, the conservative estimation is that about 98% of people’s thought activity isn’t fully conscious; it’s more intuitive, more sensory-emotive in nature. The majority of brain activity, like an iceberg, lies below the water line. Second, the emotional brain sends 10 times as much data to the rational brain as vice versa. It’s a trade imbalance, as if the rational brain was merely Cuba, while the emotional brain is China. And third, everybody feels before they think because the emotional brain operates five times more quickly, i.e., there is no such thing as objectivity.

As a result, for brand-oriented consumers and leaders as well as your average worker, emotions matter. Emotions are central, not peripheral, to both marketplace and workplace behavior.

Therefore, companies able to identify, quantify and thereby act on achieving emotional buy-in or acceptance from consumers and employees alike will enjoy a tremendous competitive advantage, which is where facial coding comes into the picture. For 13 years now, and as highlighted in my book, Emotionomics, chosen by Advertising Age as one of the top 10 must-read books of 2009, my company, Sensory Logic, has been using the facial coding research tool to understand the emotional dynamics that transform feelings into greater prosperity for the companies that recognize the value of leveraging them.

 

Measuring & Managing Emotions through Facial Coding

Facial coding first came to the modern public’s attention most strongly because it is the only research tool highlighted in Malcolm Gladwell’s bestseller, Blink — as a means of scientifically gauging emotional response. But its origins go back a century and a half to the esteemed British scientist Charles Darwin. In addition to Darwin’s work on evolution, he came to realize that emotional intelligence provide a competitive survival advantage, which led him to studying the human face as the best vehicle by which we reflect and communicate our emotions. In essence, the face is best for three reasons:

• Universality – even a person born blind exhibits feelings in the same way, thereby revealing that how people emote isn’t learned or socialized, it’s innate.

• Spontaneity – the face is the only place in the body where the muscles attach right to the skin, thereby providing real-time data.

• Abundance – people have more facial muscles than any other species on the planet. So as Gladwell notes, the face provides a “wealth” of information that can then get turned into greater financial wealth.

Roughly a century after Darwin’s seminal work in this area, Dr. Paul Ekman of the University of California, San Francisco and Wally Freisen, at the city’s school of medicine, systematically figured out which of the 43 muscles in the face and their movements correspond to which of seven core emotions: happiness, surprise, anger, fear, sadness, disgust and contempt. In 1998, I went to Dr. Ekman and learned his Facial Action Coding System (FACS) because in today’s tough business environment knowing facial behavior (“action units” in Dr. Ekman’s terminology) leads to anticipating actual consumer purchase and employee performance behavior. After all, each emotion has its own meaning, its own significance, its own way of driving the outcome.  

 

Sample Application #1: Branding is 200-proof Emotionality

Branding is primarily emotional in nature and, without the benefit of a tool like facial coding, also almost hopelessly abstract. After all, the essence of brand equity is that a company has managed to create a sense of loyalty among its customers. What is loyalty if not a feeling? Devoid a tool like facial coding that measures loyalty in emotional as opposed to rationalized, verbal input survey terms, companies are hard-pressed to know if they really enjoy brand equity or not. Brand awareness –a more common measure – is essentially worthless in the end. I’m very aware of Adolf Hitler as a name, but wouldn’t buy Hitler Hops beer for example!

The first key to building brand equity is to pursue a customer-centric brand strategy by protecting the emotional health of your company’s relationship with consumers.

To help them achieve true emotional buy-in in regarding to branding, a company must bear in mind the following three key variables.

Reflected Beliefs: The first key to building brand equity is to pursue a customer-centric brand strategy by protecting the emotional health of your company’s relationship with consumers. To do so requires, in turn, ensuring that consumers see their deeply-held, personal beliefs mirrored in the brands they purchase. As a result, companies should reflect the target market’s beliefs, linking their beliefs about themselves to an enduring belief in the brand. The best strategy is always to sell people on themselves. That’s because building on what’s already been internalized works best.

Belonging: A second brand equity key is to provide status so consumers enhance their self-identities vis-à-vis potential membership in groups to which they aspire. To that end, build a bridge facilitating people’s adoption into those very groups. That is, people should feel not only that the brand fits them, but that it fits the social group to which they hope to belong. With both “me” (beliefs) and “us” (belonging) covered, a brand is in a more strongly fortified position to guard against status-induced defections.

Telling a Story: While the first two keys to brand equity are strategic in nature, the third one is tactical. It’s about creating a brand story rich enough to engage consumers. To do so, tell a story that builds a brand/customer relationship by offering a vivid personality people can relate to, and by creating hot-button associations. Over time a combination of personality and associations will help intuitively guide consumers to a brand, provided that they don’t become concerned that they’ve invested their time and money on a company whose story lacks enough power. The truth is that a great brand is a myth perched atop functional attributes that deliver on the brand’s promise and make the story feel like reality. In other words, if a brand delivers emotionally, its myth is transformed into reality for its tribe. So an offer must comply with the brand’s promise, or both risk being destroyed. Like a myth, a brand is hard to start, hard to establish and difficult to dislodge.

If consumers’ faith in the brand’s story gets broken, they’ll see the brand’s message as an epic lie. Then the fall from success will be horrendously fast. To avoid taking this plunge, a company must ensure that there’s substance behind their brand’s promise. That being said, brands — especially great brands — are ultimately more about their implied, emotionally-oriented promises. The functionally based benefits that initially created a need for a company will fade over time. This progression happens for two reasons.

The first is that whatever technical or operational innovations originally provided the company with an advantage will eventually suffer from competitors adopting a “me too” stance. The second and far more positive reason is that over time robust brands move from framing their offer’s appeal in terms of facts to framing the appeal in terms of fiction, which doesn’t mean telling lies. Instead, what’s meant by fiction is that over time the branded story supersedes the literal offer and becomes the value proposition. A brand is no longer a platform for the rationally oriented offer. Instead, the brand has acquired emotional power that doesn’t reside in facts; it resides in faith, enjoyment and ease of connection.

Here’s a case in point of a fall from (brand) grace. In this defensively-oriented case, a U.S. automotive manufacturer came to Sensory Logic after paying for an extensive national print ad campaign that included an apology for previous lapses in quality. We tested the reception of this particular ad by three segments: recent purchasers (Owners), people who were indifferent to the brand (Apathetics), and those who would not consider it (Rejectors).

How was the apology received? Badly. The average percentage of positive emotional response was a measly 22%. Even worse, the Owners’ collective facial coding results were barely ahead of the other two segments despite the fact that fully one third of them considered the company the leading quality provider in the category. What went wrong? Well, for the automaker, primacy of quality as consumers’ key criterion in making such a major purchase.

But by making the overt apology the automaker was providing content evidence that the primacy of quality belief wasn’t being honored. Therefore, the loyalists who had bought in the past were, in effect, being told that they were losers for having made the wrong choice by deciding to buy the company’s cars.  

Sample application #2: Keeping workers Emotionally Invested Amid Change  

The company’s “us” is composed of employees who bet their livelihoods on the idea that the house (the company) will win and enrich them also. A great leader has the qualities of a winner willing to share the glory – in contrast to this example! When The Wall Street Journal runs extensive, front-page coverage about executives exercising stock options on dates that “luckily” lead to windfall personal profits, you can bet that people notice. And they take special notice of cases like that of one executive, whose chances of having such fortuitous timing in exercising his options year after year was calculated by the newspaper’s analyst to be one in 300 billion. Was it “blind luck,” as the executive said (before resigning)? There’s reason to doubt it, thereby reducing trust and making leadership a tougher, more urgent task.

When companies undergo dramatic organizational changes, such as a merger or acquisition, or a significant reorganization, paying attention to the emotional dynamics involved is effort well spent.

To help executives connect emotionally with employees when trust matter most – amid change, whether a merger, acquisition or significant re-organization – consider the underlying reality of the situation.

First, whether it’s political, religious or corporate leadership, the emotional dynamics of being in charge don’t change very much. People will become ardent, true followers to the extent that they believe it’s safe to do so; that victory is possible, if not outright imminent; and that they will get to share in the accomplishment and the rewards that come with success. Then a “me” will join the “us” and do so willingly — without coercion, without doubt, without questioning — because that person has forged an emotional bond and made an emotional commitment.

Therefore, second, when companies undergo dramatic organizational changes, such as a merger or acquisition, or even a significant reorganization, paying attention to the emotional dynamics involved is effort well spent. Related to honesty, Sensory Logic also conducted a study in which we looked at the responses of employees whose companies had recently undergone dramatic organizational changes. In that case, we asked among other questions: did employees trust their leaders, and did they believe what their leaders had told them about the changes?

What did our results uncover? When subjects were asked the belief question, anxiety in the facial coding activity reached the highest level in the study: 22%. That’s illuminating and here’s why. Anxiety signals fear and, along with surprise, fear makes up the alarm employees are likely to feel when confronted with reminders that their leaders are powerful enough to brush their concerns aside. Put another way, change may bring with it concern, even suspicion, about whether one’s leader will be a faithful guide during the struggle ahead.

Because the immediate reality of change is often quite negative, the reasons given to accept the change must alleviate concerns and provide relief. Otherwise a sense of hopelessness and toxic fear sets in for employees, a scenario executives must strive to avoid. Amid change, boosting employee pride is vital because the emotional alternative — engendering fear — is so destructive to a company’s productivity and, therefore, ultimately its profitability. It’s a causal chain that starts with the announcement (or, usually first, rumor) of change, followed by anxiety, stress and a slump in productivity.

To understand why the sequence gathers such momentum, let’s look more closely at how change, fear and business results correlate. The two yardsticks will be physical and financial in nature, starting with the physical. As biologically monitored, how does the experience of change affect the body? The technical answer is that people’s heart rates, blood sugar levels and cortisol hormone levels all shoot up. Meanwhile, the underlying, psychological answer is that this trio of physical changes indicates that changes in a person’s (work) environment causes the body to go into overdrive in order to cope with adversity. Given that this trio of physical changes corresponds exactly to those that have been measured when people experience the emotion of fear, no wonder the estimate is that only 25% of employees willingly accept change.

Yes, in the short term those physical adaptations make peak performance possible. They’re nature’s way of helping people rise to the occasion. But typically organizational changes take time to unfold, and in the process the very same biological tricks-of-the-trade that make peak performance possible start to undo it. For instance, over time high cortisol levels prove to be toxic and capable of dulling the mind’s receptive capacity.

In short, biology helps, then hurts. Anxiety starts to eat people up, as lingering change proves to be a major physiological and psychological, body/mind distraction that lowers employee productivity.

Now for the financial yardstick to bring that point home. For starters, let’s note that fear is powerful enough that no amount of corporate planning has ever proven equal to that emotion. It’s been estimated that organizational change can cause a decline in work productivity at levels approaching 75%. No wonder the track record for M & A activity working out is so dismal. Underlying the financial troubles companies often experience amid change is emotional trouble. Think of the movie Jaws, specifically the scene in which the mayor urges residents and tourists alike to get back into the water because “It’s safe.” Nobody leaves the shore. Inherent to any significant change in any company is a signal to employees that there’s a corporate shark circling, with the likelihood of blood in the water imminent. All employees will feel emotionally and perhaps even physically vulnerable — given the stress involved — because it’s easy for them to imagine that the blood could be their own.

To avoid company-wide paralysis, executives must take the lead to quell the fear that sets the causal chain of fear leading to lost productivity in motion. Moreover, they must do so as quickly as possible — before the physical toll of stress so saps the workforce that a corresponding decline in the company’s financial performance follows.

To bring about progress during major organizational change, executives must plan in financial, legal, operational and emotional terms. Now, including the last part might seem obvious. But during the planning stage prior to implementation, the odds are that companies locked in rational mindsets will not have devoted much time or thought to the emotional dynamics of change. In part, that’s because of lacking enough time to do it all. But in all honesty there are other factors involved, too. For one thing, outside resources like lawyers and consultants aren’t likely to have a good feel for the company’s internal dynamics. For another, neither they nor senior management may have much aptitude or stomach to contemplate in human terms the possibly wrenching changes involved.

As a result, a company’s senior management may focus on the logistics of change and be blind to the human dimension and inevitable emotional fallout that accompanies the announcement of a merger, acquisition or reorganization. Furthermore, as noted by Carey and Ogden in The Human Side of M+A, not only are these transactions often done in haste, they are also done “without the required know-how to assess the people and to get a clear window into the organization.”

Whether done through facial coding or another method, it’s worthwhile to read the real emotional temperature at a company. In an era when many executives to have even low, single-digit growth, doubling or tripling your earnings through taking care of the emotional side of the equation is easily well worth it.

About the Author

Raised in part in Italy and a former student at Oxford University, Dan Hill is the founder and president of Sensory Logic, a U.S. based company with worldwide clients for whom it provides consulting and research services focused on the emotional dynamics of successful marketing and leadership.

 

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