Effective Business Apologies: The Innovators - TheStreet

Tiger Woods' recent apology in the wake of allegations that he'd had extramarital affairs has undoubtedly exacted a tremendous personal price. It may also cost him any of several lucrative endorsement deals.

Woods' heretofore sterling reputation has already taken a beating, and it may get worse as details of his alleged indiscretions emerge. (In a poll taken by


this week, almost two-thirds of respondents agreed that brands connected to Woods risk having a stigma attached to them.)

Although sponsors like


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Procter & Gamble

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have said that they'll continue to support Woods as he tries to sort out his personal situation, they may well conclude over time that Woods' endorsement has lost its shine and switch to less controversial spokespeople.

Woods' predicament demonstrates how tricky it can be for a celebrity to make an effective apology, and it's no easier for a corporation. Companies have shied away from making public apologies. Some of their reluctance may be tied to the risk of litigation. Historically, defense lawyers have viewed corporate apologies as little more than nicely phrased admissions of liability and have urged their clients to avoid apologizing whenever possible.

But businesses might be wise to learn from the medical profession when it comes to apologies. Faced with skyrocketing malpractice insurance rates, many hospitals have instituted programs to admit mistakes, apologize and offer restitution before medical errors generate costly malpractice lawsuits. Such programs are proven to save time, stress and legal fees. They also allow doctors to talk openly with injured patients and their families, which can strengthen relationships between physicians and their patients. The apology movement in the medical profession has its critics, but its overall success is something the business community can learn from.

Although lawsuits can come from many sources, they're brought most frequently by unhappy clients and customers, disgruntled employees, disappointed company shareholders or discontented contractors. Each of those relationships is a little different from the others, and the specifics of a business apology need to reflect the company's relationship to the person receiving it. Fortunately, though, the six fundamental elements of an effective apology are the same regardless of the relationship involved.

First, sincerity is essential. The company spokesperson should say "We're sorry" or "We apologize" without hiding behind corporate euphemisms like "We regret any inconvenience." Anything else can sound too much like spin control, which will make it much less effective.

Second, the company should take responsibility for its actions without making excuses or blaming someone else. The apology can't be conditional. "We're sorry if you were offended or inconvenienced" is no apology at all.

Third, the company should make amends. Ideally, whatever the company offers should put the other person in as good or better shape as he was when the company made its mistake. It's not usually necessary to offer huge amounts of money to put things right, but fair restitution goes a long way toward making an apology effective.

Fourth, it's important for the company's representative to let the person receiving the apology tell her side of the story without interruption. That may not be a pleasant task, as anyone who has worked in customer service can tell you, but it's essential for two reasons. It demonstrates respect for the person receiving the apology, and it allows the company to gather essential information to learn from its mistake and prevent it from happening again.

Fifth, the company's representative should express appreciation for what the person receiving the apology brings to the relationship: ongoing business in the case of a customer, hard work and talent in the case of an employee, or quality goods and services in the case of a contractor or supplier. This is a step that often gets skipped, but it's important to restore damaged business relationships. People need to feel valued, and expressing appreciation makes an apology that much more sincere.

Lastly, the company needs to tell the person receiving the apology how similar mistakes will be prevented in the future, and then take steps to make sure the preventive actions are put into effect. Research into medical apologies demonstrates that patients and their families can forgive even the most severe injuries if they believe that others won't suffer the same fate. Taking preventive action not only demonstrates that a company's apology is sincere; it also reduces the risk that the company will have to apologize in the future for a comparable mishap.

Time is of the essence when it comes to apologizing effectively. The longer an apology is put off, the more the apology looks like image management instead of a sincere attempt to set things right.

If a company's mistake seems headed for court, it's a good idea to get legal counsel involved before making an apology -- particularly when it's a written one. While an apology can go a long way toward preventing litigation, a thoughtlessly worded or clumsily delivered one can do more harm than good. The lawyer's first instinct will probably be to advise the company not to apologize at all in order to avoid accidental admissions of liability. However, if management's instinct is to apologize, involving the legal department can help a company develop an apology that will do the job without significantly increasing its legal risk.

Most people know better than to expect perfection and will respect a company that can admit its error and apologize. Apologizing after a mistake is the right thing to do. It can also be a wise business strategy.

Lauren Bloom is a Washington, D.C. attorney and the CEO of Elegant Solutions Consulting, a consulting firm dedicated to helping professionals, business and association management executives build trust with their clients, customers and members by "walking the ethics talk" in their daily practices. She is the author of the "The Art of the Apology -- How to Apologize Effectively to Practically Anyone."