March 18, 2019

Reputation Management: Why Your Company Should Stop Pretending to Be Perfect

The perfectionist mentality is ingrained in the contemporary world. From people’s picture-perfect lives as portrayed on social media, to most corporate news releases, we are inclined to tell the world that everything is hunky-dory all the time. (See your PTA moms’ feed for further proof.)

In this video, Jacob Morgan admits that there’s no perfect company and it’s okay not to be. Let’s face it; none of us want to be wrong. Few things are worse for brands than discovering that someone in your company made a grave mistake. The situation can be overwhelming and can disrupt your business. All of feel like crawling into a hole and doing our best ostrich imitation. You can choose to hide from the fallout and assume it will pass with time, but just… don’t. Ignoring an issue is one of the worst things your business can do. Too many companies believe that admitting a mistake shows weakness and tarnishes the organization’s reputation. In reality, the opposite is true. Admitting your shortcomings portrays powerful leadership, maturity, and can boost the credibility of your brand.

Examples of Corporate Mistakes and How Companies Fixed Them

It takes courage for a company to admit wrongdoing. A simple phrase like “I’m sorry” can be powerful and avert the implications of a big mistake. Below are several remarkable examples of corporate mistakes and apologies.

 Toyota’s Defective Vehicles

In 2010, Toyota’s biggest nightmare occurred. The car manufacturer produced more than 8 million cars with defects. Sadly, almost 90 people died in accidents caused by the defective vehicles. The cars had to be recalled. Rather than ignoring the situation, Toyota’s CEO offered an emotional apology to customers and condolences to families that lost loved ones. The company designed ad campaigns admitting it didn’t live up to safety standards and promised to fix the issues.

JetBlue Stranded Passengers

This was among the worst aviation PR disasters. For 11 hours, JetBlue’s passengers were marooned on the tarmac. The firm’s CEO designed a raw video with an apology and promised that such an issue would not happen in the future. As you can see, the emotion counts, not the production quality.

Sony’s Data Breach

Sony fell victim to one of the biggest data breaches in history in 2011. The breach compromised the personal data of 77 million PlayStation customers. Sony’s CEO made a personal apology for the issue and gave customers a month free subscription.

KFC Missing Chicken Situation

KFC ran out of one of its most prominent ingredients –chicken- resulting in the temporary closure of its numerous restaurants in the UK. To solve the issue, KFC published an ad in London newspapers apologizing for the problem. It explained what caused the issue and promised that it would not happen again. The irony of the situation, a chicken company running out of chicken, was also not lost on the brand. Their ads were appropriately tongue-in-cheek as a result. No one was hurt by the missing chicken, so it was a smart move for KFC to use humor to diffuse the negative blowback.

Airbnb’s Diversity Concerns

In December 2015, Airbnb faced accusations of racial profiling and discrimination. The CEO of the company addressed the concern proactively with an email. He took a strong position against discrimination and the company even conducted an inclusion campaign, part of which included this simple but powerful video, which focuses on the beauty and diversity of their traveller clients.

 

Why should your company stop pretending to be perfect and admit mistakes?

Embrace the wrench! Admitting mistakes has all kinds of positive side effects.

curved-wrench-on-black-surface

1. Cultivates authenticity

Today’s companies face the challenge of authenticity deficit. One way to connect with your customers and feel more authentic is to admit when your organization makes a mistake. Consumers want authenticity and transparency more than ever. They desire companies to be authentic and tell the story as it is. People will be more forgiving when you admit wrongdoing than when you don’t.

2. Mistakes are invaluable lessons

Mistakes are not always detrimental. They provide opportunities for your company to learn. Imagine if you were excited about launching a new product and it turned out to be a product nobody really wanted. Although such a mistake may have monetary and non-monetary implications, it also provides a vital lesson. In the future, before the enterprise launches a product, it will conduct intensive market research. The same applies to many corporate mistakes; they offer learning opportunities. Organizations should recognize mistakes as valuable learning moments. Kevin Johnson, the CEO of Starbucks believes that “all companies make mistakes, but great companies learn from them.”

3. It portrays integrity

When your company admits mistakes, it demonstrates honesty. It shows you acknowledge you screwed up and you are taking measures to correct the wrongdoing. If you don’t confess your mistake and instead ignore it, it shows you didn’t realize you messed up, or you simply don’t care. Both are bad news.

4. It builds trust and loyalty

Admitting mistakes does not damage your credibility; it builds it. It sends a message to the public of authenticity and honesty, and hence builds trust. Admitting mistakes can help improve customer loyalty and retention. A firm that apologies for a faulty product is more likely to be forgiven than one that offers financial compensation for the mistake.

5. Earns a Competitive Advantage

A majority of companies ignore problems and shift blame when a mistake occurs. When you admit a mistake and apologize, you stand out from the pack. When the public perceives you as an honest, genuine, and transparent partner, that earns you a a gold star in the form of competitive advantage.

Having discussed the essence of admitting and apologizing for mistakes, how should you do it? Here are several tips.

  • Act quickly: if a mistake arises, admit and apologize immediately. Do not wait for the issue to fester because the longer you wait, the worse it becomes.
  • Take responsibility: blame games don’t end well, so don’t play them. Take responsibility for your company’s actions.
  • Be sincere: your apology should be as sincere as possible because people detect insincerity from an apology.
  • Fix the problem: what’s the need for an apology if you don’t fix the mistake? Honestly, no need. Your apology should be followed by the measures you will take to fix the error and avoid it in the future. Do not just state what you will do; follow through with it.
  • Create a culture of transparency: companies should establish a culture of transparency that allows them to admit mistakes when they happen. Uber is a prime example of a company that commits to being open, taking responsibility, and fixing the problem when it falls short.

The perfectionist mentality is still endemic in many companies, but the tide is fast-moving toward transparency. The good news is this: the truth is both easiest to tell, and nets you the best outcome after a blunder.  If you are interested in learning more about using video content and messaging to respond in a crisis, or anything related to online marketing, contact us. We will be glad to help you and your business through any missteps to create a new beginning.

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