On Wednesday evenings, the Martyrs – a group of men from St. Stephen’s Church – gather in the downstairs pub at the Edina Country Club. The weekly menu includes dinner for some of the guys, a beer for most of them, and a question for everyone to debate. Tonight’s question was about corporate apologies: a necessity, a moral obligation, something that makes a genuine difference, or meaningless words that don’t really matter? It’s a timely subject in light of the recent public apology by the CEO of Toyota, Akio Toyoda, over a recall to fix the accelerator pedals of millions of cars manufactured by his company. According to David Welch of Business Week:
CEO Toyoda waited weeks before issuing an apology, and he did so only after being cornered by a reporter [at the World Economic Forum in Davos, Switzerland].
That 75-second interview stands in stark contrast to a more serious apology from him last fall at the Japan National Press Club. Here’s how the The New York Times described Toyoda’s remarks at the earlier event in Tokyo:
He expressed grief over a fatal crash that led to a recall of 3.8 million cars, regrets about an expected second consecutive annual loss and sorrow over the decision to close the company’s first American factory in California. Further, Mr. Toyoda said his company was shamefully unprepared for the global economic crisis that has devastated the auto industry, and is a step away from ‘capitulation to irrelevance or death.’ The company, he added, is ‘grasping for salvation.’
So what did the Martyrs think about corporate apologies? Most of them felt that making an apology – and making it swiftly – is often best for everyone from those wronged to the organization and its executive leadership. They seemed to know instinctively and, in a few cases, from personal experience what Barbara Kellerman discussed several years ago in Harvard Business Review:
Even those who prescribe caution agree that a good apology made in a timely fashion is more likely to ameliorate a bad situation than to exacerbate it. We have more anecdotal evidence than hard data on what exactly apologies accomplish. Yet academic research conducted so far does suggest that leaders are prone to overestimate the costs of apologies and underestimate the benefits. We know, for example, that apologies often defuse the anger of those who were injured or feel wronged. In a recent British study of malpractice patients, 37 percent said they would never have gone to court in the first place had an explanation and an apology been extended. Similarly, a study conducted at the University of Missouri showed that contrary to the conventional wisdom—which is that a defendant in court is smart to avoid an admission of guilt—full apologies are more rather than less likely to result in quick settlements of lawsuits. In fact, the more severe the injury, the more important the apology is to a resolution of the conflict.
UPDATE: According to The Wall Street Journal, Toyota’s CEO, Akio Toyoda, has apologized yet again at a press conference in Tokyo:
I’d like to offer a heartfelt apology for causing so much trouble to many of our customers . . .
And here’s another one in this op-ed piece in The Washington Post:
I am deeply disappointed . . . and apologize. As the president of Toyota, I take personal responsibility.
I think I’ll try counting these apologies rather than sheep tonight!
