Crisis response

The Deflation of “I’m Sorry” in the Economics of Apologies

A recent study suggests the best apology may be one that involves monetary compensation. Experience shows the best apologies are ones that include credible, demonstrable action that shows you really mean ‘I’m sorry.’ [Illustration Credit: Paul Rogers/New York Times]

A recent study suggests the best apology may be one that involves monetary compensation. Experience shows the best apologies are ones that include credible, demonstrable action that shows you really mean ‘I’m sorry.’ [Illustration Credit: Paul Rogers/New York Times]

We may have entered an era when a simple “I’m sorry” has little currency to the recipient of an apology. You might do better offering some form of compensation.

Effective apologies have become a mainstay topic when discussing crisis communications. Crisis counselors, including us, have encouraged sincerity buttressed by demonstrable actions to correct the wrong that required an apology. But a recent study hints that might not be enough to regain or even maintain a level of trust. 

Ben Ho is an associate professor of behavioral economics at Vassar College who applies economic tools like game theory and experimental design to understand social systems such as apologies, identity, fairness and attitudes about climate change. Ho holds seven degrees from Stanford and MIT in economics, education, political science, math, computer science and electrical engineering. He was recently featured in a  Freakonomics podcast  about apologies. [Photo Credit: Tamar M. Thibodeau / Vassar College]

Ben Ho is an associate professor of behavioral economics at Vassar College who applies economic tools like game theory and experimental design to understand social systems such as apologies, identity, fairness and attitudes about climate change. Ho holds seven degrees from Stanford and MIT in economics, education, political science, math, computer science and electrical engineering. He was recently featured in a Freakonomics podcast about apologies. [Photo Credit: Tamar M. Thibodeau / Vassar College]

Benjamin Ho, an economics professor at Vassar who studies apologies, teamed up with Uber to test a variety of apologies following a ride gone bad. Apologies that included a commitment to do better in the future often backfired, especially when there was another subpar ride. The apologies that worked best involved monetary compensation.

If Ho was a psychologist, he might have explored why an apology tied to money was a better palliative than an apology tied to a commitment to do better. My dime store interpretation: People have become increasingly cynical. They doubt whether a promise about better behavior in the future will be – or can be – kept. Immediate gratification, like a $5 coupon for a future Uber ride, is more satisfying because it’s more tangible.

Tangibility is the key here. People expect an apology. It’s like “thoughts and prayers” after a mass shooting. But the apology isn’t enough. What counts is the action that follows. The more tangible the action, the better. Or as Ho put it, “Show me the money, basically.”

The Uber example focuses on money, but compensation isn’t the only tangible value apology recipients may desire. If a new water reservoir construction site suffers a major slide, neighbors will be less interested in money than concrete assurances the problem has been fixed. If your bank has been hacked, depositors will want protection from theft.

The phrase “action speaks louder than words” applies. Apologies are something you say. Actions are something you do. Saying you are sorry is important, but it’s best to prove your sincerity through meaningful, relevant and tangible actions. What you say and do after the apology is what counts.

You can’t overlook the economics of apologies. As Ho explained to NPR, “We tested apologies with or without a coupon. We found basically the most effective [Uber] apology, the ones that increased revenues, were just with a $5 coupon.”

Ho’s findings suggest apologies can be transactional. However, as any husband has discovered when bringing home flowers when he forgets an anniversary, the gesture only gets temporary love. You might earn forgiveness, but you don’t build trust with money or flowers.

Trust is the true goal of an apology. Individuals, businesses, nonprofits and public agencies need to realize the point of an apology is to regain trust that is lost or tested – and, when possible, to burnish a reputation. Trust and an enhanced reputation typically aren’t built on cash; they are earned by credible, demonstrable actions, which may include restitution. 

The underlying message of Ho’s study is that ordinary, pro forma apologies aren’t enough now, if they ever were. If you face a crisis, big or small, treat it seriously and put on your work boots to do what’s necessary to earn trust. 

Doing anything less is worse than a waste of time; it is a lost opportunity. And the loss could be permanent.

Gary Conkling Image.jpg

Gary Conkling is principal and co-founder of CFM Strategic Communications, and he leads the firm's PR practice, specializing in crisis communications. He is a former journalist, who later worked on Capitol Hill and represented a major Oregon company. But most importantly, he’s a die-hard Ducks fan. You can reach Gary at garyc@cfmpdx.com and you can follow him on Twitter at @GaryConkling.

 

Slow-Walking a Fast-Breaking Crisis

In the fable, the tortoise wins the race by slow, steady movement. In real life, slow-walking a crisis response is doomed to lose the race of telling your story.

In the fable, the tortoise wins the race by slow, steady movement. In real life, slow-walking a crisis response is doomed to lose the race of telling your story.

In the fable, the hare, after a fast start, loses the race to the slow-moving, but steady tortoise. In the real word of crisis response, the tortoise almost never wins.

We live in a real-time world where crises can erupt or be inflamed by an iPhone video. Trying to respond by telegraph just doesn't cut it. If you can't keep up, reporters will look for and find news sources who will, with or without all the facts.

Smart crisis response involves gathering your facts, crafting your message and telling your story. A slow-walking response to a fast-breaking crisis can bury your facts, message and storytelling in the blur. Worse yet, a slow-moving response can become another trigger that propels news velocity.

Large organizations that haven't anticipated cruising in the crisis fast lane struggle to approve key statements or proactive steps. Legal considerations often play an outsized role in bogging down a crisis response that can play a significant role in the court of public opinion.

Complex corporate structures and attorneys, however, don't have to be obstacles, and they shouldn't be excuses. The solution requires open-eyed crisis preparation, starting with an acknowledgement that a crisis can and probably will happen and the response must be in the same time zone.

Crisis preparation should include specific ways to speed fact-finding, conduct legal reviews and approve actions and statements. One or more officials must be identified to take the lead in the event of a crisis and undergo stress-testing before they show up in front of microphones.

Stress testing and incident exercises based on likely crisis scenarios go well beyond basic media training. They teach how to stay cool while walking on hot media coals, often with only shreds of verified information and sometimes after being ambushed by reporters. Being out front on a cascading crisis requires mental quickness that eclipses the sedentary pace of sitting down for a one-on-one media interview or chatting up financial analysts.

Ordinary question-and-answer prep doesn't prepare a spokesperson for answering a question in the form of a video shot by an eye-witness to the crisis event.

Many corporate leaders don't want to be embarrassed by "failing" their stress tests with their top lieutenants looking on. But failure in this kind of media training is the first step toward success. Moreover, it is much better to fail in front of a few people you know than to fall flat in front of a bank of reporters.

If the thought arises that a slow-walked response could allow time to pass so the crisis goes away, think again. There are too many media incentives and too many communications channels for any crisis of note to disappear.

You wouldn't saunter to safety in the face of a swelling wave ready to pound the beach. You shouldn't saunter on crisis response, either.

Really Owning a Crisis

Mary Barra took responsibility for GM's mistakes, telling employees, "People were hurt and died in our cars." 

Mary Barra took responsibility for GM's mistakes, telling employees, "People were hurt and died in our cars." 

Crisis response gurus offer plenty of advice about owning a crisis, but there are too few high-profile examples of people following that advice. General Motors CEO Mary Barra has provided a great example.

"People were hurt and died in our cars," Barra told GM employees, as reported by The Detroit News.  "We didn't do our job, and as part of our apology to the victims, we promise to take responsibility for our actions."

Check. Check. Check.

This is the CEO of a major U.S. corporation speaking, not a PR flunky or a third vice president.

Barra makes a simple, candid declaration about corporate failure that caused people to lose their lives.

She offers an apology tied to tangible restitution to the victims of that corporate failure.

Yes, GM just reached a $900 million settlement with the U.S. Department of Justice to end a criminal investigation. However, that doesn't detract from her statement. It might even enhance it.

GM is admitting its wrong, agreeing to make it right with those most impacted and taking actions to prevent such neglect and customer indifference from occurring again. Barra previously had fired 15 GM employees and disciplined five others for "incompetence and neglect." Under Barra, the automaker has attempted to change its internal culture regarding safety. In the settlement, the company agreed to an independent monitor of GM's safety procedures.

This isn't the first time Barra has expressed contrition for the ignition defect that has been linked to 124 deaths and nearly 300 injuries. But it perhaps is the clearest, most resonant statement she has made – and one that serves as an excellent example of what it means to own a crisis.

Clinton and Bungled Crisis Response

60 percent of Democrats don't regard the email issue as all that serious. What bothers voters is how Clinton has handled the issue.

60 percent of Democrats don't regard the email issue as all that serious. What bothers voters is how Clinton has handled the issue.

The continuing saga of Hillary Clinton and her private email server serves as a fresh reminder that how you respond to a crisis is what influences public opinion.

Lanny Davis, former counsel to President Clinton and a Hillary Clinton supporter, shared a telling observation from his recent visit to Iowa:

"I was attending the Iowa Cubs (AAA minor-league team) baseball game. Interestingly, out of dozens of people I sought out and talked to about [Hillary] Clinton, their focus was not concern about her use of emails or housing them on her own secure server, but rather, what they thought was her absence of immediate transparency and explanation as to what happened and why."

In a piece written for "The Hill," Davis attributes Clinton's precipitous 13 percent fall in the latest Des Moines Register poll to her mishandling of the email server issue. He bolsters that conclusion by noting the poll shows Clinton still enjoys high favorability ratings (seven out of 10 Democrats hold a favorable impression) and 60 percent of Democrats don't regard the email issue as all that serious.

What bothers voters is how Clinton has handled the issue. Her death-by-a-thousand-cuts response has allowed the issue to fester in public and opened the door to questions about her trustworthiness, a nagging worry that has some history with the Clintons.

What's most evident and disappointing is that Clinton has missed an opportunity to enhance her political reputation by showing she can be trusted. Instead, Clinton treated the issue initially as insignificant and later made light of her decision to use private email while secretary of state. She turned over emails only after pressure built to do so. She failed to see the potential danger in this issue and, therefore, didn't take bold steps to own it and see that it was vetted fully as soon as possible.

Clinton is hardly alone in missing opportunities to build trust through a crisis. Often times it is the smartest person in the room who makes the dumbest mistake when it comes to crisis response.

Whether the email episode will derail Clinton's trip to the Democratic presidential nomination and ultimately the White House remains to be seen. But without question, Clinton has made the journey harder by how she mishandled this crisis and missed a chance to make it easier.

Affirmations First, Then Explanations

Ohio officials, including the governor, faced a crisis over safe water in Toledo. Direct, plainspoken affirmations would have helped reassure a wary public.

Ohio officials, including the governor, faced a crisis over safe water in Toledo. Direct, plainspoken affirmations would have helped reassure a wary public.

Affirmations work better than explanations in crisis situations. Affected audiences want to hear that you have fixed the problem, not necessarily how.

For knowledgeable people, this can be a challenge. Their instinct is to explain the cause of the problem and explain the solution. Those details are important, but in a real-time environment they serve best as secondary messages, not primary ones. People want reassurance you are on top of the problem. That requires declarative language, not jargon.

For example: "We deeply regret the incident, but we are fixing it and will take steps to prevent it from ever happening again. We also will make things right with those who have been impacted."

Simple words, but a powerful message that conveys the key elements of an effective crisis response – remorse, resolve, reform and restitution. Just as important, it qualifies as a sound bite with a chance to be seen on TV, heard on radio or viewed in a newspaper or online.

Following a strong, assertive statement, you can fill in the details – in priority order. In some crises, the priority is to make things right with those affected, such as airline passengers stranded on a runway for hours. In other cases, the priority may be on describing the fix.

The same rule applies to details – use direct, plainspoken language. If you are describing safe drinking water from the Willamette River, paint a picture of what happens. "We know how to treat water to make it safe to drink. We test water from any source coming into the treatment plant so we know what we have to treat. Then we test the water before it leaves the treatment plant to make sure we made it safe to drink."

That may seem sparse to technical ears, but it is train of events that average people can grasp. And it mentions "safe to drink"  – a bottomline message – twice in just 50 words.

The point of an interview is to get your point across to viewers or readers. Like any interaction, you have to be mindful of what audience will tolerate and be willing to absorb. In a crisis, people want to hear some empathy and hear about some action. The English language contains a lot of words. For this purpose, simpler ones are most appropriate.

If you want to be understood, skip the explain and stick with the affirmation.