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How to Recover From Public Failure

Is public failure a death sentence in business? Here, Inc. columnists share their best methods for a near-painless recovery.
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Obviously Obamacare has not had a stellar launch. Whether the cause is overwhelming interest or poor technology choices, neither proponents nor opponents can deny that the rollout has been an undeniable failure in execution by the leadership and the contractors. Still, it is the law of the land and the administration must address it, fix it and do their best to make it work, all while taking heavy criticism from every side.

Most will experience some public failure in business. Those who don't probably aren't working hard enough to stretch and innovate. The public can be harsh, but amazingly forgiving depending how you handle the failure. In fact, those who rise like a phoenix from the ashes inspire many people. The choice is simple. Wallow in the disaster and draw pity, or stand up and address the problem with responsibility and vigor until the recovery becomes more impressive than the failure. Only determination and resolve will assure you of a new beginning.

Read on for more tips from Inc. columnists.

1. Be Frank and Fast

Public failures are a bummer, but they occasionally happen--think Tylenol recall, Toyota auto recall or energy companies responding to clean water violations. When a public failure occurs, you have a much better chance of converting it into a win if you are frank and fast. Be frank by taking full accountability for the failure, whether it was a failure in service, design or judgment. Don't let the real facts seep out over time.  Tell the whole truth now, so you can move forward. Then, be fast in your corrective actions.  Don't wait for post-mortem details to be finalized.  Define actions to get back on track immediately. More detailed analyses might reveal additional steps to take, but they should not preclude you from taking fast action.  Lee Colan--Leadership Matters

Want to read more from Lee? Click here.

2. Admit Mistakes, Move On and Learn

The first step is to admit the mistake. In today's relationship-based economy, it is crucial that you preserve the relationships you establish with your customers. Carnival Cruises is attempting to repair their brand by appointing a new CEO and spending significant dollars on advertising and PR. This is in response to the many ship issues they have suffered recently and an uproar over their previous CEO Micky Arison's decision to enjoy himself at a basketball game while over 4,000 passengers suffered on one of the distressed vessels.

Once you show contrition, there is no need to stay stuck in a place of apology or continue to reflect on the past. Customers simply want to see your company move toward a solution that shows you have learned from your mistakes. JC Penney's new CEO chose to apologize for every decision his predecessor had made. This was unnecessary and did more to make the new CEO feel better than it did to restore relationships with disenchanted customers.

Instead, focus forward. Review what your company did wrong or why your project went off track. Without this knowledge, your company doesn't learn from and prevent future mistakes. As the government decides how to resolve the issues with the healthcare.gov site, they should pay careful attention to implementing preventive measures and processes. It would be far better to capture basic issues before those mistakes make it through the process and to outside sources such as insurance companies and the public. Eric Holtzclaw--Lean Forward

Want to read more from Eric? Click here.

3. Correct Quickly

The keys to recovering from a public failure are to immediately and publicly admit that you made a mistake, then quickly take corrective steps. Unfortunately for the President, the admission that there is a problem with the Obamacare website was slow in coming from the administration, and now that millions of people across the country are aware of the problem, it's not clear that a solution will be forthcoming anytime soon--there is no clear path to the solution. This promises to be an ongoing headache for the administration, and it is a vulnerability that the opponents of Obamacare will pound on mercilessly. All entrepreneurs and leaders make mistakes--we're human, after all. But the more quickly you admit a mistake, and the more completely you take steps to address it, the less of an impact it will have on your reputation ... and your bottom line. Peter Economy--The Management Guy

Want to read more from Peter? Click here.

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IMAGE: Shutterstock
Last updated: Oct 23, 2013

KEVIN DAUM | Columnist

An Inc. 500 entrepreneur with a more than $1 billion sales and marketing track record, Kevin Daum is the best-selling author of Video Marketing for Dummies and the executive producer of Amilya! on 77WABC New York. Sign up here and never miss out on Kevin's thoughts and humor.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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