The Apology: Business Case Studies
In researching apology business cases, we came across an issue of the Harvard Business Review. It included an excellent article by Barbara Kellerman on the subject of business apologies—When Should a Leader Apologize—and When Not?
In addition to several interesting (and very informative) case studies of successes and failures the article also offers some great advice for business leaders contemplating issuing an apology.
One of the most interesting apology business cases is about James Burke, the CEO of Johnson & Johnson who had the unfortunate task of dealing with the disastrous aftermath of the cyanide laced Tylenol capsules. The case remains one of the clearest illustrations of the perfect business apology, according to Kellerman:
People were told not to consume Tylenol products. Production and advertising were halted. And Tylenol capsules already in stores were recalled (at an estimated cost of some $100 million), while company executives worked tirelessly to resolve the crisis.
Burke also went public-appearing, for example, on '60 Minutes'mdash;to reaffirm the company's mission. 'Our first responsibility is to our customers' he said in an early statement, and he wasted no time inviting consumers to return their bottles of Tylenol for a voucher: 'Don't risk it. Take the voucher so that when this crisis is over we can give you a product we both know is safe.'
In short, given the nature of the crisis, Burke extended the virtually perfect public apology. He promptly acknowledged the problem. He accepted responsibility. He expressed concern. And he put his money where his mouth was: Not only did he offer to exchange all Tylenol capsules already purchased for Tylenol tablets; he promised new, secure packaging to make certain that the problem would never be repeated.
Marketing experts had opined that the Tylenol brand would not survive—but they were wrong. Within a year, Tylenol (in tamper-resistant packaging) had regained 90% of its market share. If anything, both the company and the brand emerged from the crisis with their reputations enhanced.
Kellerman also lists several useful preliminary questions to ask in any situation in which a business leader is contemplating issuing an apology—questions that no doubt have been compiled from lessons learned in hundreds of similar apology business cases.
What function would a public apology serve?
Are you or your organization right? If so, could extending an apology serve your interests anyway?
Are you or your organization wrong? If so, could extending an apology get you out of a tough situation?
Who would benefit from an apology? You personally? Your organization more generally? Other individuals and institutions you relate to?
Why would an apology matter? For strategic reasons? For moral reasons?
What happens if you apologize publicly? Will an apology placate the injured parties and hasten the resolution? Will an apology incite the opposition? Will an apology affect your legal jeopardy?
What happens if you don't apologize? Is time on your side—will the problem likely fade? Will your refusal to apologize (or your refusal to do so promptly) make a bad situation worse?
For business leaders, this series of questions, once carefully thought-through and honestly answered, can become an important tool for analyzing a particular situation. They represent the key decision-making factors that surround public apologies in business.
Apology business cases, like all business case studies, are invaluable. They provide real-life examples of what experts can only presume will happen in any given situation. As Kellerman points out, the marketing gurus of the time believed that the Tylenol brand would swallow a very bitter pill and not survive. They were proven wrong.
We have little doubt that JetBlue's David Neeleman and his advisors didn't review several apology business cases, and the James Burke Tylenol situation in particular, prior to extending his Perfect JetBLue Apology. There are too many interesting similarities between the two.
Both leaders took full responsibility, delivered unequivocal apologies, and offered solutions that would have significant impact on their respective company's bottom lines.
They also clearly understand the importance of the approach in extending an apology, and the 'Art of apologizing'.
Burke underscores the graveness of the situation by, among other things, appearing on '60 Minutes' the most trusted and respected news program of the time. While Neeleman, apologizing for his company's ineptitude, reaches out to a significant portion of his customer base (and the population at large) over the internet by posting a video of his very personal and direct apology on YouTube leveraging the medium's immediacy and viral potential.
There is much to learn about apologies especially where business is concerned.
Apology business cases and articles such as Kellerman's help those who need to make public apologies calculate the risks involved and minimize the chances of unforeseen surprises.
Read more on public apologies.