CEOs and Apologies: Transparency An Emotional Intelligence Indicator
By Rick Forbus, PhD
Apologizing is difficult for most of us. Some of us, however, have found ways to overcome this challenge with those closest to us. My wife, for instance, has taught me how to apologize. Because there is a lot at stake in a marriage, an apology is an important part of maintaining our relationships as husbands and wives. But there are times when difficult situations occur and even our closest loved ones are denied a request for forgiveness.
Conversely, when it comes to apologizing to employees, peers and customers there seems to be a vacuum of contriteness. Have we as a business culture practiced aloofness as a badge of honor? Do we struggle with apologizing to those with whom we work?
Sometimes apologies are not so sincere but rather, obligatory for the sake of the company image. It seemed to be a public relations nightmare recently when Netflix CEO Hastings attempted a national customer-based apology for policy changes. Take note of this account:
By Erika Morphy of E-Commerce Times
Netflix CEO Reed Hastings has offered a belated apology to customers — not for jacking up their fees 60 percent, but for breaking the news so ineptly. However, that apology was followed by the announcement of more changes sure to provoke ire. The company has split apart its DVD and streaming services, and the user experience will no longer be integrated in any way.
“I messed up. I owe everyone an explanation.” Thus begins a blog post by Reed Hastings, CEO of Netflix (Nasdaq: NFLX), announcing a new change to the company – a change that is almost guaranteed to further irritate an already angry and frustrated customer base.
The change, in a nutshell, is this: In addition to charging separate fees for its streaming and DVD-rental services, Netflix is formalizing the separation of the two businesses. The DVD-rental service is now a separate subsidiary called “Qwikster.” The name “Netflix” will be used for the streaming operation.
“We feel we need to focus on rapid improvement as streaming technology and the market evolve, without having to maintain compatibility with our DVD by mail service,” Hastings explained in the post, as well as in a video posted to the site.
There will be no price changes – the company already did that, he said, in what was presumably an attempt at levity.
The service will remain the same – and even improve, Hastings maintained.
Double the Hassle
From a consumer standpoint – at least, for those who use both services – this dollop of good news comes with a price tag: There will be separate websites for each operation.
To his credit, Hastings did acknowledge the disadvantages of the new arrangement. The Qwikster.com and Netflix.com websites will not be integrated, so if a user subscribes to both services, any changes in profile information, billing method, etc., will have be entered twice.
“Similarly, if you rate or review a movie on Qwikster, it doesn’t show up on Netflix, and vice-versa,” Hastings pointed out.
The mea culpa leading off the post, however, was not an apology for making the decision to change Netflix’s focus to streaming-only. Nor was it an apology for the clumsy setup of the two websites for customers who may want to use both services. Hastings was merely contrite about the way Netflix first introduced the pricing changes leading up to the reorganization.
“It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes,” Hastings wrote. “That was certainly not our intent, and I offer my sincere apology.”
A 60 Percent Increase
Some two months ago, Netflix abruptly announced it was discontinuing its $9.99 monthly streaming and DVD-rental plan and replacing it with two plans, $7.99 for streaming-only and $7.99 for one DVD at a time. Together the plans cost $15.98 – a 60 percent increase over the previous combined package.
Users were furious – much more so than Netflix ever expected. In September, it reported that it had lowered its July 25 guidance of 10 million users for its streaming-only plan to 9.8 million. The DVD-only option saw a larger drop, moving from the July 25 guidance of 3 million users to 2.2 million users in the revision.
Emotional Intelligence
Dr. Daniel Goleman’s Emotional Intelligence scale, transparency, is one component we look for at Trove, Inc. when coaching a leader. The assessment definition for Transparency reads:
Transparency: Leaders who are transparent live their values. Transparency – an authentic openness to others about one’s feelings, beliefs and actions– allows integrity. Such leaders openly admit mistakes or faults, and confront unethical behavior in others rather than turn a blind eye.
This particular component is in a bundle of Self-management scales. The entire bundle of emotional intelligent factors include:
o Self-control
o Transparency
o Adaptability
o Achievement
o Initiative
o Optimism
Managing these components is the premiere accomplishment for the CEO to the emerging manager, for the world leader to the housewife. Transparency becomes the impetus for realizing the need to express and live outwardly our values. Of course, sometimes there is a gigantic gulf between knowing we need to be kind, apologize and be honest and the actualization of these leadership behaviors.
It takes a great deal of character strength to apologize quickly out of one’s heart rather than out of pity. A person must possess himself and have a deep sense of security in fundamental principles and values in order to genuinely apologize.
Stephen R. Covey
A client recently explained vigorously why he just could not apologize to a subordinate executive. “You see,” he lobbied, “I cannot lose my leadership edge with this guy.” In other words, an apology, which would solve much of the divergent issue at hand, was not an option. In the western business genre, an apology to him, was an admission of weakness; a loss of positional power.
Apology is an interesting word. The dictionary defines the word as:
o An admission of guilt
o Request for forgiveness
o Regret
o Confession
o Act of contrition
o A statement expressing remorse
o A formal justification
o A defense
Wow! That list hurts! While I was writing the list there was this feeling of discomfort and uneasiness. For certain personality types (like mine), there is some trepidation to admit wrong. Why? The reasons are complex. Some are:
o Fear of rejection from the person you have wronged
o The appearance of weakness
o Having to redo or repair the relationship
o Embarrassment
o Loss of respect
Western culture sees an apology differently than other cultures. For instance, look at this blog regarding the difference in the Japanese business culture and Western.
This article on Japanese business etiquette describes a tragic incident involving a faulty elevator that led to the death of a young Japanese boy. The parent elevator company was Swiss, while the manufacturer was Japanese. (japanesecultureandlanguage.blogspot.com)
Ms. Otake correctly notes:
“A closer look at the company’s handling of the event provides a cautionary tale for businesses operating in Japan, where a swift public apology after being linked to a scandal — regardless of who’s chiefly to blame — is generally expected and taken for granted.”
Now this is part Japanese business etiquette and part Japanese culture. Apologizing in Japanese culture isn’t generally about guilt, but more about protocol.
In the west, with its Christian heritage, there is a close link between doing something wrong (sin) and personally repenting for it (confession); and this important aspect of western civilization is still practiced today in the Roman Catholic Church, which has never been a major cultural influence in Japan.
She quotes the executive of the Swiss elevator firm on his experience:
“‘I would say that our reaction was typically Western, especially an Anglo-Saxon type of reaction,’ said Schindler… ‘When you are educated in, let’s say, a multicultural environment as I was, and mainly in the United States, apologizing is always the admission of guilt. So not only by training as a lawyer, but genetically we are preprogrammed never to apologize until it is clear you are guilty.”
Yes. I’d say that’s spot on – although I’m not sure what the U.S. being multicultural has to do with anything – and as far as saying it’s an ‘Anglo-Saxon’ reaction, I’d say that’s too narrow a perspective. I believe, as I’ve stated, that it’s the Christian underpinnings of western morality: admitting your sins before God is a serious act with eternal implications. It’s not strictly a sociological act as it is in Japan.
My opinion is that business leaders anywhere in the world could consider a blend of the two opinions mentioned in the blog above. Notice I didn’t say, “business leaders…should consider…” because that would position all of us at a starting point of guilt. However, blending Japanese protocols with a healthy amount of remorse for our wrongs in the workplace may just work. Since typical work cultures are diverse in several ways: (1) gender differences, (2) behavioral differences, (3) racial differences, (4) affinities and (5) generational differences (four generations in the workforce right now), apologizing will need to be this blend.
Should we all consider an apology a strong leadership skill? Could it be that with careful thought, coupled with a nicely spoken apology, that some of our generational and other cultural differences would be lessened? Possibly. However, from experience an apology to me has never eroded my respect for the one who gave it, but rather, increased their strength in my eyes. On the other side of the equation, I have noticed that when my apology was delivered privately and sincerely with the proper amount of emotion my colleagues have said they felt closer and more connected to my leadership going forward.
Men are taught to apologize for their weaknesses, women for their strengths.
Lois Wyse
Some recommended coaching steps might be:
o Think about a scenario where you didn’t apologize and you could have, making the situation better.
o Replay the scenario again imagining the words you would say that would improve the relational tension.
o Try to come to terms with this blended paradigm of protocol and guilt mentioned above. How does it seem best blended for you? What matches your personality style best?
o Write some preemptive thoughts to prompt your next attempt at an apology. How would you play it out?
When you realize you’ve made a mistake, make amends immediately. It’s easier to eat crow while it’s still warm. Dan Heist
Strong leadership combines a myriad of actions and styles. The bottom line is that human relations are key factors in leadership success. An apology, though rare these days, may be the secret ingredient to your career ascendancy.
Executive coach – rforbus@troveinc.com