Corporate America Learns to Say Sorry

Corporate leaders are being forced to confront a reality that experts have been touting for years: full disclosure and contrition are essential to repairing a damaged brand. Advertisements from United Airlines and Ford Motor Co. are a stark example of this shift towards transparency. In these commercials, CEOs are vowing to set things right after a series of mishaps, including a summer of flight delays and cancellations for United, and the Firestone tire recall for Ford. Experts say that in today's market, consumers demand speed and contrition when faced with bad news.

Key Takeaways:

• The practice of hiding or ignoring bad news is no longer effective, and companies are learning to "fess up" to their mistakes.
• A crisis plan is necessary for companies to handle unexpected events, as seen in the examples of United Airlines and Ford Motor Co.
• Executives such as United's Jim Goodwin and Ford's Jacques Nasser are using advertisements to apologize and offer a plan to rectify the issue.
• Companies that fail to respond promptly to crises may suffer lasting damage to their brand, as seen in the case of Exxon after the Valdez oil spill in 1989.
• The importance of actual behavior over empty apologies was reinforced by Associate Professor of Advertising and Marketing at the University of Georgia, Jeff Springston.
• Ford felt it necessary to provide its own response to the Firestone tire recall, despite Firestone being the manufacturer responsible, in order to maintain its reputation.
• Coca-Cola Co. and Coca-Cola Enterprises were criticized last year for their handling of a costly product recall in Belgium, which led to the abrupt retirement of their former CEO.

Statistics:

• 20 years have passed since Johnson & Johnson set the standard for good crisis management during the Tylenol tamperings.
• Exxon was perceived as arrogant after the Valdez oil spill in 1989, precluding them from setting the standard for crisis management as seen with Johnson & Johnson.
• A year after the 1996 ValuJet crash, the company was still struggling and only began to recover after merging with AirTran Airways.
• In the summer of 1996, ValuJet was still struggling to regain customer trust after the crash.
• According to an Associate Professor of Public Relations at the University of Georgia, Leanne Hand, a company only has a "very small window of time" to properly manage a crisis.

Sources:

"Advertising Age" magazine

Associate Professor of Advertising and Marketing at the University of Georgia, Jeff Springston

Associate Professor of Public Relations at the University of Georgia, Leanne Hand

Asst. Prof. of Public Relations, UGA, Lynne Sallot

Coca-Cola Co.

Coca-Cola Enterprises

Fletcher Martin Ewing

Ford Motor Co.

Johnson & Johnson

M. Douglas Ivester

Matthew Triaca

United Airlines

WestWayne