CEOs Say Sorry – and Thanks for All the Dough
By Susan Antilla
Everywhere you look, there’s a CEO apologizing for something.Toyota boss Akio Toyoda is apologizing about the big, fat problem with his mysteriously accelerating cars. Morgan Stanley’s John Mack says he regrets his firm’s role in the credit crisis, and is “especially sorry for what’s happened to shareholders.” Lloyd Blankfein of Goldman Sachs is remorseful, and John Reed, former co-chief executive officer of Citigroup is contrite because “people I love and care about” have been affected by the financial meltdown.
Domineering, control-freak executives don’t have a long history of offering penance or much else – save greed – for that matter. These days, though, executives are throwing caution to the wind, expressing emotion and even offering gratitude to shell-shocked taxpayers for their coerced largesse in providing bailout funds. Vikram Pandit, head of Citigroup, thanked taxpayers last week and Brian Moynihan, who runs Bank of America, did the same in January.
You’re welcome, Mr. Pandit and Mr. Moynihan. Now does this mean you’ll stop sending us those credit-card nasty-grams with the sneaky little nuisance-fee provisions?
It’s great public relations to show a little humility at a time when taxpayers are gunning to storm the gates. I wonder, though, if the showing of corporate remorse is a spin-inspired flash in the pan that will go the way of the balanced budget as soon as the economy is humming and people are feeling flush and greedy again. Or is there some new sort of pressure on institutions that will give the Big Shot apology legs?
One reason we’re seeing so many executive apologies is the tsunami of crises from Wall Street to Hollywood to Tokyo. The story about the VIP reduced to groveling “has become an art form on `Entertainment Tonight,”’ says Stephen A. Greyser, professor of business administration at Harvard Business School.
It’s an art form in which words often are carefully parsed. Watch for the scripted non-apology where the CEO delivers some version of “If you feel you’ve been hurt, we are sorry for that.” Or the guarded apology like this one from Blankfein: “We participated in things that were clearly wrong and have reason to regret.” What things? Things done by whom? And what have you done to be sure it doesn’t happen again?
With a mobile-phone camera in every pocket and an internet audience instantly riveted to postings of fresh scandal, it’s harder than ever for executives to deny, cover up and get back to the golf course. The text or video about your blunder can make its way around the virtual world before you can get the lawyers and PR guys on the phone to cook up an artful version of “No comment.”
“You can’t hide the mistakes like you used to,” says John Kador, author of Effective Apology: Mending Fences, Building Bridges and Restoring Trust.
OK, so it’s easier to get caught, but you have to wonder whether the Apologetic CEO Phenomenon is destined to abruptly disappear once the economy limps its way out of Hades. If nothing else, executives accustomed to bossing people around and getting the best table at San Pietro hate having to grovel and are only going to do it when their backs are to the wall. That goes double for the older coots – I mean men of a certain age – who don’t know enough to fly commercial when they’re off to tell Washington that their car companies need a little bailout money.
They may not like it, but top execs had better get used to the idea of owning up to mistakes, says Daniel Diermeier, business professor at Kellogg School of Management at Northwestern University. Customers – particularly more socially conscious younger ones – have higher expectations of the companies they do business with, and aren’t letting CEOs get away with self-serving arguments about how business is done.
Consider the old notion that bankers are socially useful in spite of their excessive pay and often-egregious conduct because they supply the lubricant that keeps the economy chugging along. Economy? What economy? The public has written bankers off. The Edelman PR firm asked 4,875 college-educated Americans last fall if they trusted bankers to do the right thing. Only 29 percent said yes. That’s down from 68 percent in 2007.
So they apologize and thank us and even expound on their transgressions on cable television. Gerald Levin, former head of Time Warner, gave one of the more believable apologies I’ve seen during an interview on CNBC in January. Levin said that as the guy in charge at the time, the disastrous merger of Time Warner and AOL was his fault – not his board, bankers or lawyers. The mea culpa would have been perfect except for one unfortunate word. “I presided over the worst deal of the century, apparently,” he said. Apparently? Nah, I think we can all agree that you presided over the worst deal of the century, period.
Another famous extended apology was the one so high-profile that it actually slowed New York Stock Exchange trading for a few minutes. Commerce came to a halt to hear Tiger Woods, the man in charge of his own billion-dollar brand, on Feb. 19. But so far, it hasn’t worked. A poll to measure the popularity of corporate spokespeople by Onmicom Inc., taken several weeks later, showed the golfer’s appeal as a corporate spokesman had reached a new low.
Some mea culpas will work, some won’t. While the remorse movement continues on, it’s getting like a 70s-style love-fest with all the expressions of sorrow, gratitude and love. You sensitive guys are getting me all choked up.
Susan Antilla is a Bloomberg News columnist.Filed under: Opinion