1 What Is an Apology? An apology, roughly speaking, is a verbal exchange in which someone who is perceived as having caused harm or offense to a second party speaks and behaves in a way that allows for a future reconciliation between the offender and those he or she has harmed. 2 What Is a CEO Apology? Two kinds: An apology by a CEO for an offense personally committed while in role of CEO of a firm (usually publicly traded)--e.g., Martha Stewart s apology after being convicted for obstruction of justice An apology by a CEO (as representative of a firm) for an injury or harm the public attributes to the CEO s firm--e.g., Tony Hayward s apology after the British Petroleum Deep Horizon disaster. 1
Ethically Good Apology A CEO/corporate apology is ethically good if it is structured so as to restore trust between the CEO apologizer/ceo s firm and the parties injured by the apologizer/firm. An apology need not actually restore trust to be ethically good. An ethically good apology is one that is, in principle, trustworthy. 4 Three Caveats An ethically good apology has a chance of restoring trust because it is structured well, but it may not achieve this goal. For a speech act to qualify as an apology (good or bad), it is not necessary that speakers intend that their speech be an apology. What matters is that the audience hears the speech as a good or bad apology. I only consider cases in which an apology is plausibly called for. 5 Elements of an Ethically Good Apology 1. Logos/logical or content requirements 2. Ethos/character conveyed through the CEO role, through what is said, and through the manner in which the comments are given 3. Pathos/emotional connection the speaker forges with the audience 6 2
Two CEO Apologies: Which Is Better in Your Opinion? I mistakenly conveyed the status of the Phoenix investment in Trenton, Michigan. The facts I described were accurate for Trenton and not Kenosha, Wisconsin. I recognize this has added further confusion to an already difficult situation. Chrysler CEO Bob Nardelli after he mistakenly said that Chrysler was NOT closing the Kenosha plant. Kenosha was, in fact, being closed, while Trenton was remaining open. 7 Two CEO Apologies They were doing things that required much closer scrutiny I am sorry for that SAP CEO Bill McDermott s apology to Oracle after SAP was successfully sued for infringing an Oracle copyright 8 Text Poll Tips 1. Standard texting rates apply 2.We won t have access to your phone number 3. Capitalization doesn t matter, but spaces & spelling do 9 3
How To Vote Text your answer to the poll number Wait for results 10 11 Logos/Content #1 Naming the wrongdoing for which the apologizing CEO and firm accept responsibility to minimize any harm victims impute to the firm. Victims want to know that the firm/ceo and they agree on what the problem is. 12 4
No Naming of Any Wrongdoing; Vague Talk about Suffering Let me start by saying I m sorry. I m sorry the financial crisis has had such a devastating impact for our country. I m sorry about the millions of people, average Americans, who lost their homes. And I m sorry that our management team, starting with me, like so many others could not see the unprecedented market collapse that lay before us. Citibank CEO Chuck Prince before Congress 13 A Better Apology Chrysler CEO Lee Iacocca s apology for Chrysler dealers practice of disconnecting odometers, driving the cars, reconnecting the odometers, and then selling as new cars: "Disconnecting odometers is a lousy idea. That s a mistake we won t make again at Chrysler. Period. 14 Logos/Content #2 Taking responsibility for addressing the causes and effects of the perceived wrongdoing The audience needs someone with whom to build the bridge of trust. 15 5
Chrysler CEO Nardelli I mistakenly conveyed the status of the Phoenix investment in Trenton, Michigan. The facts I described were accurate for Trenton and not Kenosha, Wisconsin. I recognize this has added further confusion to an already difficult situation (quoted in Romell et al, 2009, 1) (emphasis added). 16 Ethos/Conveyed Character #1. Apologizing as promptly as possible #2. Conveying a just and settled character #3. Creating or choosing a supportive, consistent context for what is being said 17 Pathos/Emotional Connection between Speaker & Audience #1. Delivering the apology in person #2. Exhibiting empathy #3. Following through on an apology 18 6
CEO Tony Hayward Hayward interview 19 What s Wrong with This CEO Apology? Dreamhost Josh Jones statement expressing his regret for the firm s over-billing of many customers. Dreamhost CEO's Apology 20 Lack of Follow-Through Listen, there was a lot of negligent behavior, improper bad behavior, behavior that has to be fixed and sorted through. There s no doubt about it, everybody succumbed to it, some more or less. We don t take ourselves out of that. I include ourselves in that. Lloyd Blankfein, Goldman Sachs CEO after mortgage debacle No changed behavior specified so audience feelings of rage and anger are not ameliorated. 21 7
Let s See What We ve Learned Mattel CEO Bob Eckert's Apology: Is It Ethically Good? Domino s Pizza USA CEO Patrick Doyle: Is It Ethically Good? Toyota s President and COO Jim Lentz: Is it Ethically Good? 22 Ethically Desirable Elements But Not Guarantors of Efficacy Audience reception highly contingent Nature of the offense---tepco Character of the audience relationship-centered vs individualistic Culture in which apology occurs Japan vs. USA 23 United Airlines I apologize for having to re-accommodate these customers. - Oscar Munoz, United CEO 24 8
Timeline: Sunday, 4/9/17 7:30PM: Videos surface on social media. A passenger is forcibly removed from his seat on a plane that was at 100% capacity after the airline failed to attract volunteers to deplane. A letter from the CEO to employees leaked casting the situation as unfortunate, but not the fault of the airlines. Monday, 4/10/17 12:27PM: First apology issued. Monday, 4/10/17 7:30PM: Letter to employees leaks. Appears to blame victim. Tuesday, 4/11/17 3:10PM: Second apology issued. Social media ignited with widespread condemnation and ridicule. United shares lose a total of $1.4 billion (-7%) two days following the incident. It has since recovered some value (-3%). 25 Second Apology Opening The truly horrific event that occurred on this flight has elicited many responses from all of us: outrage, anger, disappointment. I share all of those sentiments, and one above all: my deepest apologies for what happened. Like you, I continue to be disturbed by what happened on this flight and I deeply apologize to the customer forcibly removed and to all the customers aboard. No one should ever be mistreated this way. 26 Proposed Solution I have committed to our customers and our employees that we are going to fix what s broken so this never happens again. This will include a thorough review of crew movement, our policies for incentivizing volunteers in these situations, how we handle oversold situations and an examination of how we partner with airport authorities and local law enforcement. We ll communicate the results of our review by April 30th. 27 9