Today, I spoke with John Kador, who is a New York Times bestselling author and author of the new book, Effective Apology. In this interview, John discusses how executives can earn more money by apologizing, the significance of the word “sorry,” the power of authenticity, some great examples and more.
Can you explain how executives who apologize earn more than executives that don’t?
Here’s just one example of how executives who demonstrate the ability to apologize tend to earn more than executives who don’t. In my book I describe some research that the Pearl Outlet, an online retailer, conducted. The company noticed that many customers (usually men) often presented pearls as part of an apology (usually to wives and girlfriends). For obvious marketing reasons— “Say you’re sorry with pearls!”—the company wanted to know more about this relationship between pearl giving and apology.
The company commissioned a formal study of over 8,000 customers. The survey confirmed that customers who are willing to say “I’m sorry” earned more money—nearly twice as much—as those who rarely or never apologize. Stated another way, customers who earned more than $100,000 a year were twice as likely to apologize after an argument or mistake as those earning $25,000 or less. It turns out that a customer’s willingness to apologize is a perfect predictor of their place on the income ladder. In addition, the relationships of those who apologize tend to be better (or at least longer-lasting) than of those who resist apology.
We can interpret these results in many ways. To me, executives who are confident enough to apologize tend to be very good at maintaining relationships. They are also good at accepting responsibility for problems, and, because of that, they are better at fixing them than those who blame others. All of these are the qualities valued and rewarded by any organization.
Do you really think that “sorry” is an important word if there is no meaning behind it?
The meaning of apology is in the action, not the words. You can’t talk your way out of a situation you acted your way into. What makes apology so powerful is not what you say, but what you do. Apology must be observable. We should be able to see the action that accompanies the words. For example, saying “I’m sorry” is one thing. What the apologizer does to provide restitution is another.
The other most important action is whether the apologizer changes his or her behavior. If he or she can be seen not to repeat the offending behavior, then the apology is complete. It takes more than words. Every effective apology contains within it the answer to the question, “how is the apologizer to be held accountable for the apology?”
Personal branding is about authenticity. How can leaders harness their true self?
The first thing that authenticity requires—and why the willingness to apologize is such a critical path to harnessing one’s true self—is a commitment to face the facts. One of those facts is that we all make mistakes. When we do, we have a choice. We can confront the truth about our imperfection and apologize, or we can deny, defend, and stonewall. When we acknowledge the facts—including those that make us look bad—we are on the road to authenticity.
This is far better than pretending that we are perfect. By acknowledging, naming, and ultimately accepting our mistakes, we embrace our humility and make room for our true selves, imperfect and all too human, just like everyone else. Apology is a way of honoring what we know to be true, while at the same time honoring ourselves and those we care about.
Can you give examples of 2 people and 2 companies that have apologized and earned back their respect?
Within months of each other in 2006, two CEOs came under fire for misstating their academic credentials. One CEO was forced to step down while the other is still at the helm. David Edmondson, CEO of RadioShack Corp., admitted that the company’s web site gave him a credential he never actually earned. At yellow pages publisher R.H. Donnelley Corp., chairman and CEO David Swanson admitted that he never actually earned a degree from the university he attended, despite what the company said in news releases and what it posted on the web site. The CEO who chose Plan A (RadioShack’s Edmonson) was forced to resign while Swanson who chose Plan B is still R.H. Donnelly’s CEO.
Edmonson now acknowledges that a candid and immediate apology might well have saved his job. 
Currently CEO of Fort Worth based Easysale, Inc., Edmonson admits he made a mistake by not immediately correcting the biography that RadioShack distributed to the news media and posted on its Website. Then when a story appeared on the front page of the Fort Worth Star-Telegram in February 2006, he should have apologized immediately. Instead Edmonson made three classic errors. He delayed. He got defensive by deflecting responsibility (“I wasn’t responsible for the web site”). And he tried to explain. These behaviors lad to a death spiral from which no CEO can recover.
Over at R.H. Donnelly, Swanson went to his board before the issue became a public. Swanson accepted total responsibility and apologized. The company nervously issued a news release to correct the record, but it never became a problem. At the time, news reports about the incident praised Swanson for his candor. With hindsight, Edmonson recommends that CEOs incline toward more transparency. “When you own up to your own shortcomings, the fear of whatever you are guarding is released,” he says. “Apology frees you from the burden of whatever you have in your past.”
If you want an example of a company whose brand was at risk and that regained its credibility, you can look no further than the toy maker Mattel.
A key benefit of apology for leaders is that it reassures people that the leader is on their side. Leaders who acknowledge fault with a genuine apology argue against people’s suspicion that they are indifferent to the pain their companies have caused. From this position, people are more likely to forgive. The truth of this was dramatically demonstrated at Mattel, when the toymaker had three recalls in one summer representing 18.2 million toys, the most in company history, because of lead paint and design flaws.
“I started every discussion on the recall with these words: ‘I am sorry we are here. I’m sorry this recall happened,” says Robert A. Eckert, chairman and CEO of Mattel. “Even though the lead-based toy recalls represented less than 1 percent of all the toys Mattel produced, it should have been zero. I’m sorry you have to worry about this.” Eckert just kept on apologizing in person, on TV, and in print. He was even criticized for apologizing too much. But the results supported his commitment to accountability. Many analysts predicted that the Mattel brand would suffer. Instead, the company exceeded revenue expectations.
What is one situation in your life when an apology helped you?
Just recently an effective apology got me out of a well-deserved ticket when a state trooper pulled me over for speeding.
I was driving on a business trip and hurrying to get to my next appointment. A state trooper pulled me over. “Sir, are you aware you were going 75 miles per hour when the posted speed limit is 55 mph?” he said. Instead of giving an excuse, I decided to admit it and apologize. “Officer, you’re right. I was speeding. I’m a guest in your beautiful state and I’m afraid I have abused the privilege. I’m sorry.” He looked at me for a minute and I thought I detected a smile and then he said, “Sir, I’m going to issue you a warning today. Please observe the posted speed limits. Drive safe and have a good day.”
Of course there’s no way to know for sure what the trooper would have done had I not apologized. And had I received a ticket, the fine would have been my restitution. Apology is not a get-out-of-jail-free card. But what are most of us tempted to do when caught doing something wrong? We deny we were speeding or offer excuses or plead for mercy: all attempts to evade responsibility. Here’s the paradox of apology: by admitting responsibility and accepting consequences, we often find that the consequences are not as dire as we fear. The world may not be as punitive as we sometimes think it is.
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John Kador is an author, consultant, and speaker who acts as if every word is a moral choice. His work centers on identifying and describing best practices in leadership and promoting the highest standards of personal accountability, humility, and transparency. This book, which describes the benefits that leaders accrue when they embrace apology rather than shy from it, is squarely in that tradition. His personal credo is that different is not always better, but better is always different. He is the author of over 10 books, including Charles Schwab: How One Company Beat Wall Street and Reinvented the Brokerage Industry, 50 High-Impact Speeches & Remarks: Proven Words You Can Adapt for Any Business Occasion, and the NY Times bestseller Net Ready: Strategies for Success in the E-conomy (with Amir Hartman and John Sifonis). His latest book is called Effective Apology.
