The art of the corporate apology: Truth, reflection and growth

One hopes that a positive byproduct of the forcible removals by several airlines — notably United and Delta — of customers from overbooked flights and each organization’s subsequent ensuing public apologies could be greater attention by corporate leaders around the world to the cultures of their companies.

That would mean paying attention not just to how they handle mistakes but, more importantly, how people are held accountable within their organizations. 

{mosads}Saying I’m sorry (and meaning it) positively impacts everything from an organization’s level of innovation, to its morale and operations, to the occurrences and reporting of further misconduct. A true apology — one in which a leader acknowledges to colleagues, charges and customers alike how things should have been handled while committing to a more appropriate path moving forward — is essential to fostering organizations capable of excellence.

My colleagues and I have analyzed organizational and leadership behavior across a wide swath of industries to glean insights into how “out-behaving” the competition can actually help a company outperform the competition. Some of our starkest findings highlight what companies have to lose when they fail to own up to mistakes. 

Specifically, companies whose senior managers do not properly apologize are six times more likely to have unsatisfied customers, five times more likely to see their market share stagnate, nine times more likely to struggle to adapt to change and eight times more likely to not be recognized as a real innovator. 

In a similar vein, employees of companies in which leaders do not properly apologize are nine times more likely to be uninspired to do their best work, nine times more likely to reject or overlook good ideas, and five times more likely to observe misconduct in their organization.

Unfortunately, we too often create corporate cultures and environments in which taking responsibility can be excruciatingly hard. We prize short-term results and linear career paths. We claim employees are “free to fail,” but only if those failures are quickly followed by successes.

We look for stars who get everything right from the beginning rather than those who show a willingness to recognize when a course correction is called for. We profess to value the need to learn from mistakes then fail to create space for honest conversations around errors made and opportunities missed.

To avoid predicaments like the fallout from airlines’ poor treatment of customers, companies must build cultures in which leaders are first required to take real responsibility for even their everyday errors and oversights, the ones that do not go viral. To build a humble leadership culture that promotes the practice of authentic apology, our experience suggests that leaders should do three things:

Stand for truth. Most companies have a code of conduct or a set of values that govern the way they conduct business. In the work LRN does helping clients identify and articulate these values, I have been struck by how rarely companies willingly highlight “truth.” Instead, we’ve scaled the idea of “buyer beware,” allowing ourselves to over-promise to the point of dishonesty. If we want our leaders to own up to their missteps, truth has to be at the core of how we define ourselves. 

Create space for reflection. Those who are always on the go rarely find time to reflect on where they’ve gone wrong. As the adage goes, sometimes we need to go slow to go fast. Companies need to create space and mechanisms that allow employees to open up about where they’ve erred, how they got there and what they are tweaking so they can get it right the next time. We can’t expect managers to take responsibility if their organizations don’t create the right structures and environments to allow them to do so. 

Celebrate growth. Conveyed in an authentic apology is a commitment to grow. When we celebrate leaders who make such a commitment, we create a true “freedom to fail” — and an organization committed to making itself better. That is an organization that wins in the long term. 

Managers have a responsibility not only to be role models, but to create a context in which others can do the right thing too. Leading and shaping culture means supporting colleagues and teams as they find their own voice and take their own responsibility. This is more than a case of setting a tone. It’s about making space. 

A few real apologies on the inside might just prevent reputation-tarnishing missteps on the outside. Think how much happier some of our Fortune 500 executives would be now had they been more used to taking responsibility for more run-of-the-mill internal mistakes.

Michael Eichenwald leads the advisory practice at ethics and compliance firm LRN and advises companies on leadership and how to build ethical cultures.

The views expressed by contributors are their own and not the views of The Hill.