What can a New York PR agency learn from the cautionary financial tale of the last decade? A lot, actually. “The Big Short,” the brilliant and entertaining “economics lesson” on the real estate collapse that brought down the U.S. banking system in 2008 (based on Michael Lewis’s bestseller), is full of takeaways that PR pros can use. Here are the top six.
Make your story relatable. “The Big Short” is long on jargon and the engineering of complicated financial instruments based on mortgage-backed securities, but director Adam McKay makes it all accessible. Without dumbing down vital information, he uses pop culture stars like Anthony Bourdain and Selena Gomez to explain it using fun and (literally) visceral visuals. We also see Ryan Gosling’s character make creative use of the building game Jenga. Few of us may be able to get that kind of star power, but creative analogies are a strong storytelling technique.
Educate yourself, and educate yourself some more. One thing that impresses in Michael Lewis’s story and is translated in the film is the depth of research the short-sellers undertake before making their bets. Dr. Michael Burry, (Christian Bale) whose hedge fund was nearly leveraged out of existence by shorting the housing market, actually read thousands of pages of mortgage documents. The crew at Mark Baum’s (Steve Carell) fund visits a banking conference in Las Vegas to buttonhole insiders and tours Florida’s foreclosed homes before committing to a position. This kind of diligence pays off in PR as well.
Dig deeply. Granted, much of “The Big Short” takes place before texting took over as conversation, and it’s probably a dramatic device, but it’s notable that everyone in the film has face-to-face meetings. The players “IRL” took the time to get to know each other and sound out differing points of view to help make decisions. Eye contact, hand-shaking, even violent outbursts all serve to better acquaint each person in the chain of events. You have to wonder if more personal contact couldn’t lead to more informed decision-making in all businesses.
Be open to new ideas. The very first scene in “The Big Short” introduces Lewis Ranieri, the father of mortgage backed securities, an entirely new concept introduced in the 70s. It was a genius idea that revolutionized the staid banking industry. It was also eventually corrupted and ultimately responsible for the financial meltdown we experienced years later. But that doesn’t make it any less an innovation. It’s up to smart PR people to continue to innovate, and to recognize innovation when we see it – hopefully with more positive consequences.
But know when to stick to your guns. In his book, Michael Lewis makes much of the fact that four financial industry outsiders and oddballs see the coming collapse of the housing market when almost no one else does. Despite skepticism from clients and peers, and in the face of ridicule and ostracism, the contrarians persevere until vindicated, albeit at the expense of American taxpayers. Although the stakes are lower for a typical PR opportunity, the story is a reminder that – when opinions are backed by due diligence – it pays to go against the herd.
When all else fails…take the long view. What can be tough, both onscreen and in real life, is persuading others to your way of thinking. PR pros in particular may note the scene where two of the short-sellers try to interest a colleague at The Wall Street Journal in the story of the corrupt CDOs – without any success. Similarly, after his vindication, the Christian Bale character wonders why he never receives public credit for having predicted the meltdown when other, less prescient – yet more PR-savvy – pundits are recognized.
But as the film shows, a good story will find a way to be told. On the screen, as in life, if you take the long view, history may just prove you right.