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Corporate Apologies

Recently two men under the spotlight offered very different versions of contrition.

Consider the testimony that three-star General Kevin Kiley gave before Congress about his role in the Walter Reed Hospital scandal. Even though he’s the officer in charge of all Army hospitals, Kiley skirted questions about his responsibility for the squalid conditions and the poor treatment of wounded soldiers.

Kiley’s response even included an execrable double-negative: “I’m not trying to say I’m not accountable.”

A member of Congress asked Kiley if he wanted to say anything to one of the soldiers who had been in Walter Reed, and to his wife, who were both sitting directly behind him during the oversight hearing. Kiley allowed that he felt “terrible for them” but failed to even turn around to acknowledge their presence.

Now ponder General George Weightman’s much different approach. Although he was recently fired after only serving a short stint as the officer in charge of Walter Read, and had been cleared of blame by several members of Congress, Weightman took responsibility anyway. He faced the soldier and his wife, looked them in their eyes, and in a soft, respectful tone told them, “I’d just like to apologize for not meeting [soldiers’] expectations ... I promise we will do better.”

In the public-perception contest, the score is One for Weightman and a Minus-Ten for Kiley. 

The lesson shouldn’t be lost on business. In the corporate arena, a well-placed and well-timed mea culpa can often reclaim public support, re-ignite consumer sales, and reassure institutional investors. 

It’s important to note, however, that sometimes public repentance only offers ammunition for prosecutors to use in their legal attack on a company and its executives. In some circumstances, CEOs who say, “I’m truly sorry” may really be sorry later on, when they find themselves in prison.

Clearly, though, the apology is one of various strategies that your crisis teams must ponder before anyone opens their mouth. Research confirms that, if appropriate, an apology can pave the path to victory in the court of public opinion and on the floor of the stock market. According a to recent study co-authored by three business school professors – Christopher Peterson and Fiona Lee from the University of Michigan and Larissa Tiedens from Stanford – the stock prices of companies that took responsibility for dismal financial performances fared better than the shares of those companies that placed blame on external forces.

In making a decision to apologize, remember:

  • People don’t like to forgive corporations; they do forgive people. One of the first key crisis management steps is to therefore select the best possible spokesperson to issue an apology, someone who can sincerely connect with the audience.
  • Be consistent. While there must be a team working behind the scenes, the trained spokesperson should be the one out front. Public-apology-by-committee only adds to the cacophony already surrounding the crisis.
  • If the thicket is particularly thorny, you may have to recommend a change in the management team, especially if current managers have long been in place. The new leaders can still accept blame, apologize genuinely, and better encourage the perception that the company is positioned well for corrective change.
  • When new leadership takes unqualified responsibility for past mistakes – as the new team at Tyco International did so effectively – people sense that the company has learned from its past. Credibility soars as a result.
  • Whether a management change takes place or not, companies that publicly express sorrow send a powerful message: “We can handle the truth.” That bolsters confidence among investors.

Once the apology is delivered, a longer-term public relations strategies should help ensure that you’ll never have to say you’re sorry again.

 

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