Some days ago, a few of us were talking about new cars in the market, when the conversation veered towards Volkswagen and how they had been caught intentionally adding software that was designed to prevent them getting caught from emission standards that were over the normal. It was surprising that this was the first time where an auto company had been caught for something that they had done very intentionally. The Environmental Protection Agency caught up with them. Sources say that they could be fined up to $18 billion for what they did. Volkswagen stocks have plummeted 20% in just that one day.
It made me think of the various infringements of companies these days. Jeffrey Liker in an article for Harvard Business Review chronicles the fate of these companies. First, Toyota, a highly revered and respected company, accused of selling cars with unintended acceleration problems that had led to quite a few serious injuries. Toyota put it down to faulty and mismatched mats that were causing the problem, and didn't take it seriously for a long time hoping the storm would pass. It didn't, and they ended up with a $1.2 billion settlement order.
Then, General Motors had a faulty ignition switch that led to 124 deaths and 274 injured over a span of 10 years. They too didn't take it very seriously and finally paid up $900 million as an out-of-court settlement with the Department of Justice.
Now, recently, Volkswagen, whose fine can be anywhere in the vicinity of $18 billion having contravened EPA's very stringent emission norms. It made me think, though—how do companies bounce back from such a place of lost credibility? How do they regain the consumers' goodwill on which a lot of sales depend? Do they minimize it and hope that it will pass? Do they just feel bad that they got caught and do the minimum expected of them, or do they come clean and say, "We made a mess and we need to rectify it and will do everything that is necessary." It harkened back to the days of Tylenol, when J&J found that cyanide had been put into their capsules in Chicago and it led to 9 deaths. How quickly they handled the situation while responding with such honesty, candor and responsibility. They apologized to the public, took Tylenol off the shelves, admitted responsibility and came back with tamper-proof bottles that reinstated the public's faith in Johnson & Johnson as a good, ethically sound company.
Renu Saran wrote this small booklet on Infosys co-founder Narayana Murthy and quotes him as saying, "As leaders who dream of growth and progress, integrity is your most wanted attribute." Indeed it is! Just a couple of days back, I was with students at a business school and they were doing a short interview with me and had 3 questions that they asked. One of them was, "Are there any situations where we would need to not tell the truth or falsify things? Are there situations that warrant it?" I had to look at them and quote from Dr. Clayton Christensen, a professor at Harvard Business School, who said, "It is easier to hold on to the truth 100% of the time, than it is 99% of the time." It's easier to just say that this is a non-negotiable for me, than it is to say that I will do it just this once. Because once you set a precedent, it always comes back to haunt and challenge you to cut corners once again.
But, it also brought up the question – how should companies handle these situations? What happens in the aftermath? I came across this very interesting article on "The Organizational Apology" where the authors say, "Basically, you need to ask the questions – Who? What? When? And How? – and make sure that the apology sits right in those areas.
1. Who apologizes? Who is the one who stands up and says, "We made a mistake and we're sorry." We need to make sure that it has to be a senior leader who does that.
2. What is the substance of the apology? They go on to say that there are 3 things you must have: candor, remorse and a commitment to change. An example of candor comes from an apology that Razer's CEO Min Liang Tan, who said this after several delays of the company's blade gaming laptop in 2014, "We've been doing a terrible job in anticipating and meeting demands for our products. We suck at this. I suck at this. I apologize to all of you who have had to wait for ages each time we launch a new product." Clear, filled with candor and very precise about the apology!
3. Where? What kind of coverage must that apology have? Wide coverage. Wide enough to cover all the places where the mistake has had an impact.
4. When should an apology be made? The key here is to make it quickly. Speed equals sincerity as the authors say. In the case of General Motors where 124 people were killed over a span of 10 years, the CEO at the present time, Mary Barra who was clearly not at the helm when these incidents happened, came out and said, "Today, General Motors will do the right thing. I am deeply sorry for what has happened." It was so good and so clear and came out very quickly after they were indicted.
5. How should the apology be made? In person, or through a letter or on social media and with great empathy. A really bad example of this that the authors cite is the one that Tony Hayward made. He was CEO of BP at the time of the catastrophic Deepwater horizon oil spill in the Gulf of Mexico. He said, "We're sorry for the massive disruption it's caused to people's lives. There is no one who wants this thing over more than I do. I'd like my life back." What a terrible way to phrase an apology, if that's what it was. You must have deep sincerity and demonstrate empathy.
So, the 'what' question must be filled with a tremendous commitment to change. The 'who' has to be senior leaders, the 'when' has to be very fast, the 'where' has to be really high profile and the 'how' with genuine sincerity and empathy. As you put this together, it gives us an insight into how we need to apologize when mess-ups are made. Mess-ups happen all the time and it's terrible if it was intentional, as Volkswagen was. But more often than not, it happens unknowingly or by folks around you, but if the buck stops with you, do the right thing—stand up very quickly, take the hit for it and apologize, keeping in mind that the what, who, when, where and how questions must be addressed.
I liked what I read in that article. But I thought to myself that there is another dimension that needs to be taken into account as well. As individuals who know that the Almighty God has placed us in these positions and trusted us with the responsibilities that we have, another person to whom we owe an apology is to God Himself. The good news about that, is, as our Scriptures say, "If we confess our wrong-doing, then God is faithful and just and will forgive us for these wrong-doings and will cleanse us and make us clean again, and take away any unrighteousness in us." That is good news for me, because it takes away the guilt as well. After getting involved with something that's wrong, even after apologizing, it can be that we know that we have wronged both Heaven and earth, and to know that if we confess to God, then He will wipe the slate clean, is a wonderful thing.
A word for us today. We may not do things in the scale of General Motors or Volkswagen or Toyota. But in our day-to-day lives, when we mess up, let's make sure that we take responsibility, apologize, do it sincerely both to the humanity that we may have wronged and to God who gave us the responsibility, and then only, move on.
May I offer this prayer on our behalf?
Almighty God, bless each one of us who reads this post and give to us the wisdom to say the right thing at the right time, for some of the wrong things that we may have done. We pray that You would lead and guide us and accept our voices of apology, both to people and to You. In Jesus' name we pray. Amen.
• Jeffery Liker, "Assessing the Sins of Volkswagen, Toyota and General Motors," https://hbr.org/2015/09/assessing-the-sins-of-volkswagen-toyota-and-general-motors
• Renu Saran, "Narayana Murthy and the Legend of Infosys." Diamond Books, www.db.in
• Maurice E. Schweitzer, Alison Wood Brooks & Adam D. Galinsky, "The Organizational Apology." https://hbr.org/2015/09/the-organizational-apology
• Scripture reference: 1 John 1:9 https://www.biblegateway.com/passage/?search=1%20John%201:9&version=TLB
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