Corporate Mea Culpas and the Consumer

A recent blog piece in the Harvard Business Review points to the merits and modalities of a timely apology. It suggests a (quick) public and written apology is a good start followed by seeking out as many as possible (of those offended) for a private apology. However, for an enduring positive aftermath the article suggests plenty of introspection and inspection to determine whether it was a one-off slip or part of an ongoing or potentially recurring problem.

While HBR's article focuses on regaining respect an equally important if not greater aspect is restoring customer confidence in the firm. Missteps and even blunders are as much a part of life for corporations as it is for humans given that those missteps are consequence of human actions. But just as in ordinary human life the willingness to own-up is a rare commodity which often results in the original sin being compounded by many more leading to a justified consumer perception of an organization being untrustworthy if not deceitful.

An inartful choice of words can sometimes lead to repercussions that can be as bad as a deliberate campaign. An example of the former is the new Microsoft CEO's statement about women being better off if they did not ask for a raise raised a storm leading to a quick retraction and an apology for a poor choice of words. The quick apology allowed Microsoft to move past and does not appear to have hurt the software giant at a meaningful level. 

More on the wilful part of the blunder continuum is UK supermarket chain Sainsbury's outed campaign urging staff to get consumers to spend an extra 50p while shopping. An outraged consumer tweeted a photo of the poster that had been inadvertently put on a shop window. The company's response of contacting the tweeting customer probably did it no good and a weak response of it being only for "internal consumption" did even less for Sainsbury.

The hotel industry has had more than its share but many have not been particularly nimble in offering mea-culpas  with varying reasons. In the early 90's the Las Vegas Hilton was the venue for a grotesque rite-of-passage for naval officers where they groped women sailors. The company fought the multi-million dollar damage award to the plaintiff but at no stage put out a mea-culpa regardless of its role, which court documents point to. Latterly, in an ongoing dispute with customers, the Marriott Corporation is looking to be able to thwart guests at its conference centers for bringing in their own WiFi. When the story broke it appeared as if all areas of Marriott hotels were off-limit to customers' WiFi equipment but after some negative press the company has clarified that it is only for conference areas with a view to preventing hackers.  Regardless, the company is better served by withdrawing its efforts in that area and issuing a "customer is right" statement rather than prolonging what surely is a losing proposition at all levels.

While it is clear that mea-culpas always work there are some who are teflon bound. None more so than the maverick leaders of the taxi-disrupter company, Uber. From rapes to murders to extortionate pricing the company lacks for nothing when it comes to a public-relations disasters but yet nothing seems to stick, at least thus far. Perhaps, the consumers' attraction for the service beats all the negatives but more likely the jury is still out on them.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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