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To Apologize or Not to Apologize During a Crisis—That is the Question: 4 Reasons Why A Company Should

By Kipp Lanham, Senior Account Executive, Media & Communication Strategies, Inc.

Most clients in crisis have preconceived notions about how to fix their reputations but they don’t have a total plan or the staff with the experience to get the job done for the short or long term. Those clients have many crucial communications issues for the Media & Communications Strategies team to solve. Usually, the most pressing issue is whether or not to apologize.

Many companies this year have avoided the apology as much as possible, such as JP Morgan and The New England Compounding Center, who have been facing media scrutiny and litigation over the last year due to their services or products allegedly hurting consumers physically or financially.

JP Morgan, one of the largest investment banks on Wall Street, allegedly played a role in the mortgage securities crisis in the mid-2000s that led to the global financial crisis in 2008. The Department of Justice has been pursuing lawsuits and recently has reached a settlement with JP Morgan and fined it $13 billion. As part of the settlement, JP Morgan agreed to a “statement of facts” rather than a formal apology.

Meanwhile, The New England Compounding Center, a pharmacy in Massachusetts, was found allegedly to have distributed tainted injections that resulted in meningitis deaths around the country. Congress was horrified by media reports of the pharmacy’s negligence, which reportedly was responsible for individual deaths and destroyed families. Social media, with its viral nature, amplified the outrage and concern. The company did not apologize as part of its statements although it created a fund to pay the victims. 

Companies in crises like JP Morgan and The New England Compounding Center would benefit from apologizing rather than just releasing a “statement of facts” or starting a victim’s fund.

Here are four reasons why:

  1. A company is not too big to fail. A statement of fact does not fix reputation as well as an apology, although it may protect the company from immediate liability. By apologizing and taking responsibility up front and disclosing a plan of action to correct the mistakes made, a company has a better chance of recovering its reputation and regaining the trust of its consumers rather than dodging any official announcement of ownership of the crisis hiding behind legal facts and jargon. If you were a client of a company in crisis would you be more likely to do future business with a company that is willing to admit mistakes or one that admit the legal minimum of responsibility?
  2. Throwing money at a problem is not enough. The victim’s fund is an important olive branch that shows commitment to the consumers affected. But an apology packaged with this fund would make it that much stronger and of significance to the victims, consumers, and the media. Otherwise, the action comes across to the victims without any feeling of human empathy or compassion. The media will pick up on this insensitivity and convey that tone in their news coverage.
  3. You’re on the media’s radar. In paying a fine or creating a fund for victims, does a company such as JP Morgan or the New England Compounding Center think that its brand is no longer tainted by what damage has been done? The media could still write stories marking the anniversary of its crisis; the media will be primed for any incidents by or related to their company and industry. The media will also report what the company did or did not do to make amends.
  4. Making your mess your message. A company can take the crisis situation and position itself as a responsible business leader, willing to take blame and use lessons learned from crisis to strengthen its business policies in the future. An apology can give a company the opportunity to change the negative narrative, the tone, and the headline of its story as a business to one that is positive. Steps can be taken that lay the foundation for that story of rebuilding reputation by changing egregious actions the minute the crisis clock starts ticking.

The old saying states, “Time heals everything.” But the media and public do not necessarily forgive a company and forget its crisis, no matter how much time passes, when the transgression has a scale and impact that affects victims and public consciousness for months, if not years. However, apologizing can help start the healing for a company’s reputation and begin the journey to bringing its customers back. 

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