Yet, in the years before the crisis, apologies had become common, almost a sport, and examples can be found on YouTube from everyone from Don Imus to Jesse Jackson to Mel Gibson to Seinfeld's Michael Richards, to Jim Cramer of CNBC's Mad Money. Lawyers recommend against admitting wrongdoing, but companies had come to discount that advice to save reputations and get past bad news. In 2004, professors from the University of Michigan and Stanford University found that companies that accepted blame for poor performance in annual reports were more likely to outperform the market the following year.
Companies have found that heart-felt apologies can decrease the likelihood of lawsuits if they're well crafted and don't come off as "Sorry I got caught," but express regret, assume responsibility and map out a plan to avoid repeating the offense, says Leslie Gaines-Ross, chief reputation strategist at public relations firm Weber Shandwick and a longtime student of apologies in crisis management.
Great apologies of the past
Past corporate apologies have come from JetBlue, Amazon, Nielsen, Seagate Technology, Sun Microsystems, Southwest Airlines, Texaco, Procter & Gamble, United Airlines, Ford Motor, Toshiba, Merck, Mattel, Taco Bell and Nike. Even Hank Paulson, now Treasury secretary and a key player in the global attempt at economic resuscitation, apologized to employees in 2003 when he was CEO of Goldman Sachs for implying that most of them were irrelevant to the firm's success.
Steve Jobs issued an apology when Apple sold iPhones to its most eager customers for $599, then slashed the price two months later to $399. Whole Foods CEO John Mackey apologized for writing anonymous posts on financial message boards. Steve Hughes, the former CEO of tea-maker Celestial Seasonings, once wrote a letter of apology in the Boulder, Colo., Daily Camera for poisoning prairie dogs on company property.
Those may have seemed like bad deeds at the time, but they pale compared with the pink slips about to be distributed as a result of the credit crunch. The clock can't be turned back, but a few sincere "I deeply regrets," would help shift focus from what has happened to what needs to happen next, Gaines-Ross says. A 2006 Weber Shandwick study found that apologies had become so commonplace that their ability to allay public concern may be eroding. Even so, "CEOs should realize that an apology is not a sign of weakness, but an act of strength," Gaines-Ross says.
Not sorry, and proud of it
Golden Gate University psychologist Kit Yarrow says both CEOs and elected officials operate in dog-eat-dog worlds where strength is rewarded and those with self doubt and regret don't make it to the top. "It's entirely possible that these individuals haven't internalized that they've made mistakes and therefore, don't feel responsible," Yarrow says. "Many of the folks involved have trained themselves to avoid introspection and second-guessing. It gives you a thick skin and a sense of superiority that shields you from caring what people think of you. And if you don't care what people think, you certainly wouldn't feel the need to apologize."