PR Fish Bowl

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April 10, 2018

A PR View Of CEO Apologies

 

CEO apologies

John Stumpf, former CEO Wells Fargo

Most public relations experts agree that the rules of the public apology are relatively simple. Be sorry. Do it quickly. Take full responsibility. Wherever possible, communicate how you will fix the problem.

But if apologizing is so simple, why do so many CEOs botch the apologies? Sometimes it’s because legal advice conflicts with PR counsel. It may also be due to those who are delivering the mea culpa. As the face of the corporation, many CEOs are naturally charismatic. Some are effortlessly sincere. But in a high-stakes situation where a strong apology is required, most leaders need help with the art of expressing remorse. Media training can be a useful communications tool, whether it be for national TV interviews or phone chats with small trade press.

Several factors determine how the public will receive a video/interview apology. A good apology can actually be turned into an advantage for a company. Netflix, for example, bounced back after it mishandled the announcement of a short-lived split of its services. (Remember Qwikster?) A study of video corporate apologies conducted by researchers Leanne ten Brinke and Gabrielle S. Adams found that the more the CEOs smiled, the more the stock prices dropped.  Yet share prices rose as the CEOs expressed more regret.

Here are our nominations for best CEO in a video apology:

CEO John Stumpf, Wells Fargo

Scandal: 2016. Charging customers for phony accounts

Time elapsed before TV apology: 5 days

Contrition? He does express regret, but it’s hard to tell if it’s due to the fake accounts or the negative PR that resulted. In interview with Jim Cramer on his CNBC show, Stumpf accepts no real responsibility. Before the interview starts, he jumps the gun by cutting off the host, stuttering a bit, and leaping into his statement. He does say “we are sorry,” but not “I am sorry.” Most significantly, he blames lower-level employees, saying they “misinterpreted” the company’s sales incentive policy. Yet anyone watching can spot the flaw in his explanation. If 1% (over 5000) employees are fired for defrauding their customers, how can management not take responsibility for this behavior?

Body language: He used lots of hand gestures but sometimes they make him look defensive. Yet it’s worth noting that overall, Stumpf is a good spokesperson. The eye contact is strong; he leans forward and sits at attention.

Apology accepted? Denied. He was forced to resign about a month after the scandal broke. Even a strong on-camera performance couldn’t overcome the problem with the apology itself.


CEO Rick Smith, Equifax

Scandal: 2017 Epic data breach CEO apology

Time elapsed: A video statement was released on the same day *(but the breach had been discovered by Equifax two months prior)

Contrition? It takes Smith a full minute to get to the apology. He expresses regret, but hardly takes full responsibility. To his credit, he uses the pronoun ‘I,’ but his language is stilted. The stock phrase “I deeply regret the incident” sounds designed to distance him from the problem. It would have been more effective to say, “I am very sorry that our customers’ information was stolen on my watch.”

Body language: His posture is a bit stiff. He omits a tie, so he looks more relatable, yet he speaks in a monotone. His eye contact is shifty, which is a hazard of using a teleprompter. This video apology raises the question of when to use a recorded statement instead of an interview. The advantage is that there’s no aggressive journalist to challenge him, which can be very important for a nervous or media-shy executive. The problem, however, is that it’s easy to come across as stiff and antiseptic. And if the lines aren’t memorized it’s likely to seem fake. At least in an actual interview, there’s a chance for the CEO to seem like there’s blood coursing through his veins.

Apology accepted? Not accepted. After getting grilled by Congress, he “retired” with golden parachute intact.

 


 

CEO apology

CEO Mark Zuckerberg, Facebook

Scandal: 2018: Not informing the users of a massive data breach

Time elapsed before TV interview: 4 days.

Contrition? Yes, Zuckerberg is sorry. You’d be sorry too if you lost $9 billion in wealth in 48 hours. In the CNN interview, he never evades the tough questions. He outlines coming solutions and good things Facebook is doing. He appears reasonable and credible. He does not appear aloof, or as if he’s making excuses. Zuckerberg does not like interviews, and he admits as much in this one, which is a show of honesty that actually helps the apology. He later admits that perhaps the company should be regulated, explaining that the question isn’t “whether” but “how” regulations should be applied. It’s a disarming approach, both in the message and the delivery.

Body language: Excellent eye contact (too much?). He is actively engaged, yet fairly relaxed. His dress is casual – in typical big-tech fashion — which helps promote an image of accessibility.

Apology accepted? Remains to be seen.

 


CEO Oscar Munoz, United Airlines CEO apology

Scandal: 2017: Ticketed passenger dragged off plane.

Time elapsed before TV apology: 3 days

Contrition: Not sufficient. After releasing a pair of inadequate public statements, Munoz is forced to go on TV. In his interview with ABC’s Rebecca Jarvis, he says he feels “shame” and clearly attempts to appear regretful. Instead, he comes off as more annoyed and angry than ashamed. Munoz fails to evoke much humanity. He uses the pronouns “we” and “our” instead of “I” — which can indicate a lack of acceptance of personal responsibility.

Body language: His posture is fine, but he sits back in his chair, which can make one seems defensive. He does not maintain good eye contact with the journalist. He often looks as if he’s trying to remember his messaging.

Accepted or denied? Accepted. Still CEO, though his planned promotion to chairman was scuttled.

 


CEO apology

Steve Ells, Chipotle

CEO Steve Ells, Chipotle

Scandal: 2015: E. coli & norovirus outbreaks

Time elapsed before TV interview: Over a month.

Contrition? As CEO apologies go, this was solid. In the interview with NBC’s Matt Lauer, the concern shows on his stern, serious face. He has clearly benefited from excellent media training. He gets to the apology immediately and uses the pronoun “I.” He shows his fallibility and seems very authentic. Ells talks extensively about all the things they will do to correct the problem, promising they will be 10-15 years ahead of the industry in food safety. When Matt Lauer asks him about stock prices, he smartly says, “That’s not what we’re thinking about now. We’re thinking about safety…”

Body language: He sits with good posture and leans forward. He maintains good eye contact, but not too much. His dress is a bit more casual than most CEOs – a sweater under a jacket, which makes him appear less aloof or corporate than, say, Munoz.

Accepted or denied? Debatable, because, as strong as Ells’s performance was, Chipotle continued to struggle with fresh outbreaks of food-borne illness among customers. Ells stepped down in late 2017, which shows that you can be an excellent apologizer, but if you don’t fix the problem, it won’t matter in the long run.

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