Business

Businesses - and their leaders - need to know how to say they're sorry

Time to own up?

Larry Helling

Cedar Rapids Bank and Trust
Larry Helling Cedar Rapids Bank and Trust
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Corporate mea culpas have become commonplace.

In a world where negative information is shared widely and instantly, companies frequently are compelled to respond in a public way to missteps that portray the organization in a negative light.

In recent months, Facebook, Wells Fargo and Uber all launched advertising campaigns in response to high profile scandals.

Facebook has been dealing with as massive breach of user data, Wells Fargo was facing multiple fraud charges, and Uber was confronting a host of concerns ranging from management practices to allegations of sexual harassment and driver-rider violence.

But were these apology ads money well spent?

Subsequent marketing surveys suggested customers weren’t so forgiving. Some critics said the ads fell flat because the companies failed to accept accountability for their misdeeds.

Facebook’s ad portrayed the company as the victim, Wells Fargo’s minimized the bad conduct and Uber’s deflected blame, those critics said.

So what is the best way for a business to apologize to its customers or the public? We asked local business leaders to share their best practices for making amends.

Own the mistake

“You’ve got to own it and fix it, and that’s all customers really care about,” said Larry Helling, CEO of Cedar Rapids Bank and Trust.

While Helling said he never had to make a broad public apology on behalf of the bank, he’s had to get on the phone on occasion to apologize to a customer for something that went wrong — a payment applied to the wrong account or a deposit that didn’t add up, for example.

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“We’re human and we do make mistakes,” he said. “Mistakes are opportunities to show who we are. If we do well by our customer, own the mistake and fix it, we can make the relationship better.”

Brandi Mueller, co-founder and managing director of the Overture Group, an executive recruiting firm with offices in Cedar Rapids and Illinois, concurred.

“We learn more from our mistakes than from our successes,” she said. “We grow more as leaders if we take the time to look at what went wrong and what we learned from it.

“We’re in a relationship business, and the customer has a better experience if we own the mistake and are up front about it from the very beginning.”

Have a plan in place

Christa Nelson, owner of Epiphany, a Marion-based marketing firm, said companies should be proactive so they can respond quickly when something goes wrong.

“Think about the protocol for how you will respond ahead of time, before something happens,” she said. “Pull a team together, including your top people, your marketing people and your attorney.”

This team should designate one point person to deal with the media and have a media response ready that promises a more thorough response once the situation is reviewed.

“The team needs to consider how the incident broke your brand promise to customers,” Nelson said. “The response has to be in line with the offense and your brand. If it’s authentic and genuine, it will be met in the same way.”

Be mindful of legal liability

Often, an organization’s response to a negative event is tempered by concerns about legal ramifications.

“When it comes to corporate apologies and crisis management communications, you have to be very cautious about apologizing profusely because saying you’re sorry can be viewed as an admission of guilt,” said Alex Taylor, co-owner of Woofables Gourmet Dog Bakery in Coralville and an adjunct professor of business communications at the University of Iowa.

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Rather than apologizing, Taylor recommends acknowledging the situation and being forthcoming about what the company is doing to remedy it.

“Show sincere concern as the leader of the organization,” he advised. “That’s why you make the big bucks.”

There are some legal protections for apologies, noted Amy Reasner, a lawyer and shareholder at Lynch Dallas in Cedar Rapids.

Iowa law protects apologies made by licensed professionals, including health care providers, engineers and architects, from being used in litigation as proof of negligence.

Evidentiary rules also protect subsequent remedial measures and settlement offers from being used in court as evidence of liability.

“As a lawyer called upon by companies and public entities to advise on public relations issues, the first and foremost question I ask is, ‘What is our purpose in responding?’” Reasner said.

“It may be to control reputational harm or to inform or a wide range of reasons, but we need to be clear why we are doing it.”

The organization also has to consider whether the response will expose the organization to legal liability — such as a defamation or invasion of privacy claim — or could be used as an admission of liability if the apology law doesn’t apply.

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If the purpose of a response is to apologize, but it doesn’t look like an apology because of legal concerns, the message is not likely to be effective.

“If your purpose is to say you’re taking a serious look to correct the problem, that’s the safer route from a legal perspective because you’re talking about subsequent remedial measures,” Reasner said.

“You’re offering reassurance, and that’s probably as good as you’re going to get.”

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We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.