How And When A CEO Should Apologize

Gone are the days when being a CEO meant never having to say you're sorry. Lately, it seems we've been deluged with corporate apologies — ranging from Mike Lazaridis, founder and co-CEO of Research in Motion, for BlackBerry's worldwide outage to Andrew Mason, CEO of Groupon, for a New Year's deal gone wrong in Japan.

Mistakes happen. The best-laid plans sometimes backfire. What's important is recognizing when an apology is needed and how best to craft it. When something goes wrong, it's a valuable opportunity to fix the problem and bolster your customer relationships.

Take the apology from David Neeleman, who was CEO of JetBlue Airways in 2007 when bad winter weather left passengers stuck on the tarmac at New York's JFK Airport for more than 10 hours. Neeleman's letter of contrition stated outright, "We are sorry and embarrassed. But most of all, we are deeply sorry." He described JetBlue's blunder in detail and acknowledged its impact on customers. Finally, he repeated his commitment to improving services by providing specific information about how JetBlue planned to prevent its mistake from happening again.

"You deserved better — a lot better — from us last week," Neeleman concluded. "Nothing is more important than regaining your trust, and all of us here hope you will give us the opportunity to welcome you onboard again soon." He was concise, to the point, and authentically sorry. That's just what a formal CEO apology should look like.

At the other end of the spectrum, Netflix CEO Reed Hastings' apology for DVD rate hikes was universally panned. Hastings could have acknowledged customer dissatisfaction and left it at that. Instead, he used the apology to launch a separate company called Qwikster. Netflix took a drubbing from both customers and the stock market — until Hastings followed up by canceling the Qwikster scheme altogether.

And what about BP CEO Tony Hayward's off-the-cuff statement after the oil rig explosion and flooding in the Gulf of Mexico last year? "There's no one who wants this over more than I do. I'd like my life back." It's probably unnecessary to rehash why this comment went terribly awry.

Small-business owners should learn the following lessons from these incidents, in case they ever need to apologize:

• Be clear and focused. Don't send out any messages until you are sure what you're apologizing for. Take the time to find out exactly how your customers have been negatively impacted.
• Take full responsibility. Refrain from spreading the blame around. No one wants to hear excuses.
• Be sincerely regretful. It's not always easy to convey genuine emotion in a letter, but if you fake it, stakeholders will know.
• Make a promise you can keep. What your customers want to know is whether the mistake will ever happen again. Your job is to promise that it won't — and to make that promise stick.
• Make amends in a tangible way. When Sony Chief Executive Howard Stringer apologized for a data breach that resulted in the release of 77 million PlayStation users' personal information, he offered a "welcome back" package that included a free month of PlayStation Plus membership and identity theft insurance. In the event you're called upon to apologize to customers, what can you offer them by way of restitution?

If you remember that saying "I'm sorry" is all about mending fences with your customers (and not about you and your business operations), chances are you'll succeed in what matters most: customer retention and loyalty.

Thanks to Lee Polevoi / Blog Intuit / Intuit, Inc.
http://blog.intuit.com/trends/how-and-when-a-ceo-should-apologize/