After a month of security problems on Sony’s PlayStation Network, CEO Sir Howard Stringer finally apologized. Is all well? No. Some find Sony’s position a classic non-apology. According to the theory of corporate apologies must work, Sony missed some crucial steps.
Corporations have avoided real apologies for years, opting instead to offer statements of sympathy for fear of liability suits. But real apologies can be assets for a corporation. Something that most people don’t learn when getting their business administration degree is that corporate apologies done right can help the business recover from missteps and even save money.
The potential strength of real apologies has begun to come to light in the medical industry. Although healthcare and malpractice seem to go hand in glove, the University of Michigan Health System found that full disclosure of medical mistakes significantly decreased new claims for compensation, including lawsuits. The changes resulted in a 61 percent decrease in spending on legal defense costs.
“This shows that over time, hospitals can afford to do the right thing,” says chief risk officer Richard Boothman. “It demonstrates what we have believed to be true for some time: the sky won’t fall in by pursuing a pro-active and honest approach to medical mistakes.”
The effectiveness of a good apology isn’t restricted to hospitals. According to researchers from the University of Michigan and Stanford, stock prices of companies that took responsibility for bad performance did better than those of companies that blamed outside influences.
However, a true public apology requires more than saying “sorry.” According to Patrick Field, a managing director of the Consensus Building Institute, an effective public apology requires six elements:
- It must, in a clear and detailed fashion, indicate what the apology is for, and it must be for what caused the injury or problem for customers, business partners, employees, or the public in general.
- An apology must be personal, delivered by the person in charge and using the language of “I” and “we.” To say you apologize on behalf of the organization is a waste because a faceless entity cannot feel regret.
- The apology must be as directly delivered to the people harmed as possible, preferably given live in front of a large group of those affected.
- Don’t be defensive. Now is not the time to explain away what happened or to point blame at another. Do that and you’re not apologizing.
- Any apology must be genuine. If the person delivering it is going through the PR motions, people will know it immediately.
- The company must take action to both make good on the harm done and, as importantly, to ensure that the problem will never happen again.
Following the steps can be difficult, particularly if the corporate culture focuses on self-protection. Before embarking on developing an apology program, do in-depth research and build the case for why it could work in your company.