by Eric Krell
When it comes to apologizing, CEOs may want to go back to school. A new era of what Chris Pullig, department chair and associate professor of Marketing at Baylor University’s Hankamer School of Business, describes as “forced transparency” has intensified the need for business leaders to acknowledge when their companies commit service mistakes in the eyes of their customers.
Top executives at globally renowned companies, including Netflix and JetBlue, have taken to blogs and YouTube to say sorry for botched strategic decisions and customer service snafus. These leaders can attest to the importance of apology management.
After Netflix CEO Reed Hastings apologized for a poorly communicated decision to increase monthly video rental fees, The Wall Street Journal indicated that Hastings had just taken part “in a storied tradition: the corporate half-apology.”
In October 2011, JetBlue Airlines chief operating officer Rob Maruster asked customers for a second chance following reports that passengers had been stranded for seven hours on a tarmac-bound plane in Hartford, Conn., during a snowstorm. There was only one problem with what otherwise appeared to be an adroit apology: JetBlue Airlines CEO and founder David Neeleman had already asked for a second chance four years earlier when he posted his own YouTube mea culpa following a similar tarmac-stranding incident.
Until recently, public apologies from CEOs were extremely rare. That’s changing. The experiences of Neeleman, Hastings and others demonstrate that it’s not enough to say you’re sorry; how and when you apologize, as well as how your company behaves afterwards, matters more. As Pullig notes, a well-executed apology can stimulate a “recovery paradox” in which the apologizing organization enjoys a boost in customer satisfaction because customers appreciate the fact that the company admitted a mistake and took steps to remedy it.
If business leaders want to leave half-apologies behind and generate better returns on their mea culpas, they might take a cue from the University of Michigan Health System and University of Illinois Medical Center at Chicago. Several years ago, both institutions began letting their doctors apologize to patients after medical errors occurred. The decision helped humanize the care doctors provided and also delivered bottom-line benefits. In the months following the “OK to apologize” decision, malpractice lawsuits decreased by 50 percent at Illinois University and by roughly 70 percent at University of Michigan.