Apologies as strategy–why they work and why they may be losing power

This is a very insightful article by Christopher Lehane, a former lawyer and Clinton White House spokesperson, now crisis consultant. His statement about the role of credibility is one of the simplest and most powerful expressions of the critical element of crisis communication today:

It hasn’t always been this way. Embarrassing stories would wither away between evening news broadcasts, and complaints would often cease to become news. But in today’s incessant media environment, there is only one thing that can help to preserve a politician’s image, a celebrity’s reputation or a company’s brand: Credibility. As a result, the apology, which is a way to claim one’s credibility when facing a modern-day media storm, is increasingly becoming a critical tool for surviving a crisis.

This raises the question, however: Have apologies lost their impact? I commented on this blog and on Ragan’s newsletter about Reed Hasting’s apology which I defended as effective. The judgment of the media, investors and social media conversants seems to be that it wasn’t. I agree it failed in one critical aspect–it was far too late. But to call it insincere as so many have, strikes me as strange. Read it for yourself and decide. How does one determine from a message like this whether one is sincere or not? I suspect it has much more to do with the predilection of the reader than the words themselves.

This quick judgment of insincerity toward Reed Hasting’s apology suggests something else–that the apology may be losing its effectiveness. Lehane does a great job of identifying three reasons why apologies are effective: 1) it draws a line of separation from the past (that was then, this is now) 2) It openly admits need for change 3) it seeks to create an opportunity from the error or problem, thereby becoming better.

I think there is another element which is our inherent or culturally-oriented way of dealing with transgressions. Forgiveness comes easily when a transgression (yes, I’m using the old terms on purpose) is recognized and the transgressor is sincerely repentant. This basic idea is foundational to the Christian faith and since we are all heirs of a Christian cultural tradition, it can be seen as deeply rooted in who we are as people. But, because of the sense of obligation to forgive the transgressor when the repentance is sincere, we tend to be very suspicious of the sincerity. I think in the Hasting’s case, that is what is going on here. We are not really rejecting the inclination to forgive true repentance, we just want to make darn sure they are really, really sorry.

If apologies are losing their force, then the old axiom of actions speak louder than words becomes even more important. Actions matter. If Reed Hasting’s apology had been made along with the statement “we screwed up, we should not have split our business, we are going back to the old way of doing things and want to forget the whole idea of a price increase for mixed DVD and streaming services. Sorry about that.” That would be different. The problem they faced was that they made a business decision that felt was best for their future, completely botched the announcement and then tried to recover lost clients and trust. I think the apology was sincere, but it was not effective because it was not accompanied by the actions those who care about this really wanted.

Lesson? If you are going to apologize when you or your organization screws up, think about what actions you are going to take to make things better. Then act on them. And, if you are going to take corrective action and apologize, do it sooner than later. One thing I am going to do in response to this emerging issue of the loss of power of apology is to think through potential actions in evaluating worst-case scenarios. Restorative actions can and now I think should be part of crisis response planning. For the simple reason that, as someone said, now is too late.

 

 

 

Most now believe media are hurting democracy–new Pew report

This may be hard to believe, and if the media report on it, it absolutely won’t be believed–at least by 75% of the population. This new Pew report is similar to another study I saw recently which said only 28% of Americans trusted the media.

What is most remarkable, most distressing and sad, but also understandable is that most Americans now say that the media is hurting democracy more than protecting it. This is the first time in our history. Freedom of the press is one of our way of life’s greatest gifts to the world. History has made clear that protecting this right of free and open expression is the first requirement of a society if we are to protect ourselves against the natural growth and abuse of power by the powerful. But that freedom has turned in on itself, made a corruption of the entire idea.

Crisisblogger readers know I have been expressing my growing concern about the nature of media coverage and what it means for reputations, for public trust, and for our democracy. I think we can now officially declare this an emergency,  a crisis even. When more Americans say that the way our news is reported is hurting us than protecting our democracy, you know we have a deep, deep problem. The problem with this crisis, like every other, is that we have come to think the only possible solutions are legislative ones. God help us when the politicians are going to solve the problem of public trust. The only institution with lower trust ratings than the media, is Congress.

This sounds like something that We the People have to work on.

 

Netflix apology–good or bad?

Seems there is usually a herd mentality when it comes to crisis communication pundit comments about reputation crises. That’s why it is interesting to me to see such a wide variety of opinion about Netflix’s crisis and the way they are handling it.

The Netflix crisis is a little different than most reputation crises. It is more of a business challenge caused by a decision to dramatically change a very successful business model. They built a large customer base by offering initially DVD distribution through the mail, then added streaming video service. As it evolved, it was all one business, one service, one customer base, one price. Netflix apparently saw this evolution and I believe that they saw that the streaming business was more their future and the DVD distribution would decline. I’m guessing at some of this (someone from Netflix can correct me if I am wrong), but I would guess the cost structure for these two ways of delivering videos was quite different and I also guess that they did research and discovered that some were using DVD only, some (like my wife and I) were using streaming only, and some were using both. So the divided the business into two options, priced each option and allowed those who wanted both to continue. For the “both” option, what everyone was used to getting, there would now be a substantial price increase.

In July they made the announcement. And as I commented on Ragan Daily Headlines and here in this blog, they screwed up how they handled it. Their message carried no explanation and gave no hint that some would not understand and many would object to the large price increase. The social media backlash was instant and brutal. While I thought they really messed up their announcement and that there would be some strong initial reaction, I thought they would be just fine. I was wrong. They lost 600,000 subscribers, share value decreased by $2.6 billion, negative press focused on their goof-ups, and PR newsletters documented their continuing problems.

Then, a couple of days ago, Redd Hastings issued an apology for his “arrogance” in the initial announcement and a detailed explanation of their new strategy, which now included renaming the DVD distribution business Qwikster. I was asked by Ragan Daily Headlines to comment on the apology and explanation and considered it excellent even while I questioned the business strategy, particularly the name Qwikster.

However, the brutal treatment of Netflix in the press, particularly some of the PR press continues, as does the evaluation by other crisis communication experts of their apology. I note in particular Bulldog Reporter, who as I have pointed out here before, seems to enjoy piling on any company that finds itself the target of media outrage. Their coverage of the problems was tame compared to the very strong criticism of the Reed Hastings apology by crisis communication pundit Jim Lukaszewski (Look-a-shev-ski), with whom I typically agree. Jim is a highly respected communication expert, so when I have such strong disagreement with him on an issue, it certainly causes me to question my position. However, in this case I think he is being very unfair and unrealistic given the situation.

I think he makes some of the same mistakes that Bulldog has done in this–considering it a PR crisis when in fact at its heart it is a business crisis caused by a very substantial change in business model. Yes, there is great risk in changing a successful business model, but there is also risk in not changing. They saw the shift in their business and as Mr. Hasting points out in his explanation (which I still consider excellent), they were uncertain whether they could be as successful in the streaming business as DVD distribution. But, it seems they felt (and I tend to agree) that given shifts in the market, they needed to make this change. Where they royally screwed up was in how they communicated that. I agree with Mr. Hastings again is that the root cause of this screwup was probably their arrogance in taking customers for granted, thinking that a careful, detailed, transparent explanation of their business model change and reason for it wasn’t necessary.

Mr. Lukaszewski provides an outstanding guide to a good apology–but when applied against the actual message provided by Hastings, and not the heavily commented-on interpretation of it that Jim provides, I think it matches up pretty well.

But, what do you think? Am I wrong in thinking this is a business crisis caused by a substantial business model change whose impact was greatly heightened by very poor initial communication, and this is an effective apology? Or, is it indeed just a PR/reputation crisis caused by poor communication and now exacerbated by an empty and ineffective apology? Your thoughts would be much appreciated.

SDGE not only tweets–they do rumor management well, too (my apologies)

San Diego Gas and Electric demonstrated the viability and necessity of Twitter for communications in their massive power outage on September 8. But they are also demonstrating that they clearly understand one of the most important requirements of crisis communication management is rumor management. Unfortunately, the rumor they had to quash was one I communicated.

In my earlier version of analysis of the communications during this event I noted that they did a great job of tweeting but started about an hour after the event. This was incorrect and based on timing information I saw on their tweets. That is confusing because of establishing hashtags. As their communication manager pointed out to me (in an email that was exceptionally gracious given my apparent criticism) they actually started  tweeting at 3:52 p.m., about 14 minutes after the outage occurred. An observant crisisblogger commenter also noted the earlier tweeting.

The corrected version of my analysis is posted on my website here.

SDGE–my apologies and great job of rumor management!

Free social media monitoring tools

I haven’t checked these out myself but considering how important social media monitoring is to crisis communication these days, wanted to forward these to you. If any of you do use them and can give the pros and cons to crisisblogger readers, please let me know.

Six free social media monitoring tools courtesy Ragan.com.

 

Crisis communication in massive power outage reveals important lessons

Major crises or emergency events almost always reveal important lessons about crisis communication. That certainly is true of yesterday’s massive power outage affecting San Diego, parts of Mexico and Arizona. There are lessons here about the resilience of the Internet, the futility of putting on a press conference when there is a massive power outage, the critical importance of Twitter, the need for websites that will stay up during major power outages and events, and a very bad example of no apology or empathy.

Having strong interest in what happens in communications in large power outages, I tracked this event with a timeline and screen captures as communications evolved. Here is my record and some lessons learned.

Sept 8 Power Outage Early Communications Analysis