Don’t apologise in a crisis: corporate affairs have got it wrong – it's not what the market wants, will likely lead to your resignation and won't repair the brand
There is a school of corporate affairs thought that wants the CEO to come out fast and sorry when the data breach – or any other major screw-up – hits the fan. Ken Roberts, Executive Chairman and Founder, Forethought, says those corporate affairs people have got it all wrong and probably won't be the ones terminating their career. Plus, the data shows it has little impact on brand salvage.
Picture this: the organisation of which you are CEO, has been the victim of a data breach and customers’ personal data has been compromised. In the face of mounting media condemnation of you and your organisation, the corporate affairs department pleads with you to respond to the rising media coverage and to make a public apology.
There is no suggestion that anyone other than the criminal hackers acted wilfully. Certainly, more could have been done by the organisation to protect the customers’ data, however, that statement will always be true. The safeguards the organisation had in place were compliant with the prescribed risk tolerances set out by its internal risk committee.
Putting all of that aside, as CEO you reluctantly agree, publicly accept responsibility, and apologise. Two things follow: your personal brand is forever scarred, and the apology does nothing to dampen let alone stop the negative public opinion. If anything, the apology is perceived by some as confirmation of the organisation’s failure to protect customer data. Suddenly, people are calling for your resignation.
The corporate affairs advisers have no empirical basis for what to do next but clench onto their textbook view that if the CEO had not apologised, the absence of a statement of repentance would have created more brand damage. In our work with those hit by crisis, we found that based on actual data of weekly brand tracking along with relative sales performance, the damage from the “breach of trust” lasted for five quarters and statistically, the apology did absolutely nothing to stem the negative publicity or alter brand metrics or sales.
Sorry is as sorry does
In most cases, an apology is not what the market wants. French historian and sociologist Pierre Rosanvallon coined the term “the age of pervasive distrust”. He discussed the birth of a coalition of minorities among citizens who are disillusioned and disaffected with the establishment. Add to that the omnipresent social media which has enabled the aggregation of these minorities. Disillusioned, this aggregation of the disaffected has placed organisations under heightened surveillance. The disaffected don’t want an apology. They are seizing on opportunities to express their collective negativity.
It's easy to simply blame mainstream and social media for fuelling the societal undertone of distrust. In the case of social media, content only has currency if it circulates and given the endless choice, what circulates is what aligns with the audiences’ preferences and beliefs. The mass-disaffected are looking for a place to express their distrust. Algorithmic social media does an excellent job at finding it for them.
Eventually, other things capture their attention and forgiveness and forgetfulness enable a brand in crisis to return to its past state. But some brands, particularly those associated with proven malfeasance, never fully recover. In our experience, depending on the severity, standard recovery takes 18 months or longer.
Now that the coalition of disaffected have been characterised as a vengeful mob, perhaps a different lens should be considered for how to manage the market’s response to a breach of trust.
Mob rules (good ones)
Banjo Patterson’s 1890 poem The Man From Snowy River provides some inspiration. Part of it describes a stockman taking control of a mob of wild horses. The stockman allowed the mob to run out of steam before he turned them around. He remained watchful of the angry mob until they were depleted and only then did he “turn their heads for home”. It’s not a bad approach for an organisation trying to manage the fallout from a breach of trust today.
Another approach comes from an 1885 article about how to quell a mob. Writing in The North American Review, Fitz John Porter said: “One determined man, with fearless front and undaunted courage, has been of more service in preventing a riot than scores of dilly-dallying mayors and governors who read the riot act and begged and besought the rioters to disperse.
“Upon whomsoever devolves the duty of suppression, let this be his first effort: check at the very beginning; allow no tumultuous gatherings, permit no delay; a few stern, resolute words; if these be not heeded, then strike resolutely, boldly, let there be no hesitation.”
In some cases, a more assertive approach to managing an angry mob may need to be considered. In other words, one option is to launch a hailstorm of counter punches delivered by an aggressive legal department and public relations people.
Being at the coalface of managing a major breach of trust is most likely the most stressful event of anyone’s career. Thankfully, not many executives are subjected to the experience more than once, which is a blessing as well as a challenge for knowing how best to respond.
This too will pass
CEO’s and marketers’ first encounter with the wildfire destruction of a brand sparked by a trust crisis is almost always their first such outing; there is no dress rehearsal and no amount of role playing can prepare you for the sometimes unbridled, vitriolic and personal attacks. When it comes to a public apology, the CEO is personally worse off, while the corporation fares no better, no matter how heartfelt the apology.
In the heat of the media barrage, opinions differ on what to say, when the acute phase will abate and if the brand damage be lasting. The question remains, should the brand weather the storm or in boxing parlance, come out swinging?
Speed of response is, of course, critical. Of the many solutions being considered, in the absence of malfeasance, recommending the CEO apologise might momentarily appease the stakeholders and delight the awaiting media but it does little to nothing to restore the brand and quell the angry mob.