The most recent public apology in my memory was when Jose Canseco expressed regret over the effects of his book, “Juiced,” an exposé on steroid use in Major League Baseball. Unfortunately for Canseco, his apology is too little too late. An investigation into steroid use in baseball has tainted the reputation of the sport and many of the players mentioned in his book as steroid users have had their reputations, careers and Hall of Fame chances destroyed by Canseco’s claims.
When will an apology be too little too late for the major firms involved in the financial crisis?
Linda Stomato of the Center for Negotiation and Conflict Resolution defines an apology simply in the Ivey Business Journal article “Should Business Leaders Apologize? Why, When and How an Apology Matters”:
“An apology can acknowledge that an injury or damage has occurred. It may include acceptance of responsibility for the mistake; express regret, humility or remorse in the language one chooses; explain the role he, she or they played; ask for forgiveness; and include a credible commitment to change or a promise that the act won’t occur again.”Stomato also claims that “Apologizing by admitting a mistake—to co-workers, employees, customers, clients, the public at large—tends to gain credibility and generate confidence in one’s leadership. Acting defensively, on the other hand, undermines it.”
If an apology and a place to lay blame restores trust when made in a timely fashion, would that not restore the missing confidence that is tearing the economy apart?
The issue is, understandably, a legal one for the failed firms. Admitting a mistake may not bode well for the company if legal action is taken as a result of the ongoing investigation into the cause of this crisis. This is where a firm’s values come into play, leaving each one with two options:
1. Apologize, admit any mistakes, accept responsibility and outline a plan that will not allow it to happen again. This option risks future legal action, but holds promise of increased consumer confidence and a resulting upswing in the economy.
2. Don’t apologize, avoid litigation and ride out the disaster.
Should a firm work for the social good or for the avoidance of legal action?
Johnson & Johnson’s apology for the 1982 poisoning of Tylenol made the company a PR legend and gave it a socially responsible image. Steve Jobs’ apology to consumers who bought a higher-priced iPhone when the price was cut and his subsequent rectification of the situation proved that Apple is a consumer-oriented corporation. Apologies in the past have been good things.
When will we see an apology, anyone willing to accept responsibility, for the financial crisis? Maybe never. Maybe too little, too late.
Until then, consumers are left to conjure confidence in the economy from somewhere else, but I have yet to see anything that warrants it.