For a company to win back lost trust, it’s important to grasp a fundamental truth: Sometimes apologizing is not the best strategy. If an apology is warranted, companies must then answer three key questions to properly craft a response: Do we tell the truth? On whose behalf are we acting? How do our actions benefit those who trust us?
To help executives be better prepared to speak to stakeholders in difficult moments, we explain this process below.
DETERMINE WHAT YOU’RE APOLOGIZING FOR
Determine what exactly you’re apologizing for: an issue of competence, or one of integrity. A competence problem involves a failure of reliability: The product or service either didn’t work or didn’t live up to its promise. An integrity problem involves a failure of responsibility: A company fails to treat stakeholders fairly or doesn’t take responsibility for the results of its actions, whether those actions were intended or inadvertent.
Peter Kim of the University of Southern California and his colleagues found that apologies were effective in restoring trust for problems of competence, but denial was the better strategy for integrity problems — if, and we can’t stress this enough, the company really did act with integrity. It turns out that competence based problems are easier to forgive, because people understand that even the most competent companies and individuals can sometimes make mistakes. A well-constructed apology for a competence problem indicates that the individual or company recognizes that they did something wrong, understands and communicates exactly what was wrong and can convince stakeholders that they will change their behavior in the future.
Integrity-based trust problems are much harder to overcome, because a breach of integrity is assumed to reflect a person’s true character. In the mind of the public, an integrity based trust issue happens because the individual or company’s leadership is fundamentally immoral. In these cases, Kim and his team found that a denial can challenge people’s automatic assumption of guilt. It can be beneficial to convince others that, as a person of integrity, you would never do the act you are accused of. (However, a cautionary note: If there’s clear evidence of fault, the researchers found that denial is never successful in winning back trust.)
MAKING WORK
Leaders then need to understand what makes an apology work. Social psychologists Roderick Kramer and Roy Lewicki reviewed prior research and found that an effective statement meets three criteria: It’s credible; it works to restore the goodwill of those who receive it because it is clearly meant to work in stakeholders’ best interests; and it assumes responsibility for correcting the problem over the long term. While this research specifically examined excuses, these three criteria link to three questions we’ve developed in our research, which companies AN APOLOGY can use to clarify their motives as they consider how to make an effective apology.
— CREDIBILITY: Do we the truth?
— GOODWILL: On whose behalf are we acting?
— RESPONSIBILITY: How do our actions benefit those who trust us?
By focusing on these questions, CEOS have a better chance of delivering an apology that will start the long process of recovering trust. Here’s a breakdown of each question.
1. DO WE TELL THE TRUTH? Apologies can help win back trust in the face of a competence-based problem, but only if they are truthful, can show an understanding of what went wrong, and offer an account that corresponds with other publicly available information about the incident in question. Let’s look at each step.
— BE TRUTHFUL: A statement must be factually true, both in terms of what happened and what the company is doing about it. This is crucial for convincing stakeholders that they can believe the company’s statements both now and in the future. A good apology also takes into account the context that gives a company’s assertions credibility — or serves credit them.
— EXPLAIN WHAT WENT WRONG: It’s vital to provide a full account of what the company did wrong. Kramer and Lewicki found that, when apologizing for a competence problem, a detailed account of actions committed by a company is much more persuasive than one that, for example, attributes the problem to factors outside the company. Details show a level of understanding of the mistakes that were made, helping concerned parties trust that the company knows what it did wrong.
— ACKNOWLEDGE INFORMATION THAT’S ALREADY OUT THERE (OR MAY BE SOON): Leaders should disclose facts they know are in the public domain, or may be revealed by investigative reporters or whistleblowers. In our era of 24/7 information flows and social media, companies are not alone in explaining what went wrong. Accepting — rather than denying, glossing over or failing to disclose material facts that have been unearthed — reinforces that the company embraces a truthful account of its actions.
2. ON WHOSE BEHALF ARE WE ACTING?
To help win back trust, apologies should prominently feature the people who have been harmed — and in whose name the company pledges to do better in the future. This demonstrates that leaders understand and care about the impact their company’s errors have had on people’s lives. To do this effectively, we offer three guidelines:
— FOCUS ON THEM, NOT ON YOU: It’s natural for any leader to feel a sense of guilt and responsibility in the wake of a tragedy; it’s also normal to worry about not only the public but shareholders and employees as well. However, your public apology should focus on those who suffered harm.
— BE DETAILED: Make sure to include personal information about those who were harmed to show that you recognize the true cost of your company’s error.
— APOLOGIZE QUICKLY: Don’t worry that you may not have all the facts yet, though you should be forthright about the facts you do have. What is important is to show that as a company you are aware of, and deeply sorry for, the harm that was caused.
3. HOW DO OUR ACTIONS BENEFIT THOSE WHO TRUST US?
Once the facts are laid out, and it’s clear whose interests the company is acting in, this last question helps the company communicate exactly how its future actions will benefit these stakeholders. After all, an apology is just words if the company can’t show stakeholders that it will offer reparations or ensure that the situation will never happen again.
A final note: Leaders also should recognize that even a perfect apology is just the first step. The greater the harm, the more difficult it will be to earn back stakeholders’ trust — no matter how eloquent the apology.
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