Making Amends

Apologizing is part of doing business. But do it wrong, and you'll really be sorry.

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For Patty Laushman, it didn't get any worse than this. Laushman is CEO of the Uptime Group, a Denver-based IT consultancy that pledges to keep its clients' computer networks up and running. Unfortunately, a major client's system had crashed. The customer, a software developer called Maverick Systems, was in the midst of a major Department of Defense contract. "For six hours, they had no e-mail, no Internet access," Laushman says. "They could not operate their business."

As Maverick project manager Marjorie Allison watched the billable hours slip away, she grew increasingly frustrated. Laushman knew she had to apologize. With butterflies in her stomach, she picked up the phone and made an appointment for the next day. She had 24 hours to figure out how to make the most artful apology of her life.

No one likes owning up to mistakes, and many business leaders resist it. But mastering the art of the apology is crucial. Business relationships depend on trust. Violations of that trust--a missed deadline or a faulty product--can cause serious damage, putting entire relationships up for renegotiation. But making amends is not as simple as it seems. At least one thing is clear: Simply uttering the words "I'm sorry" and tacking on an excuse does not constitute an effective apology. Ohio State University professor Roy J. Lewicki, along with Edward C. Tomlinson and Brian R. Dineen, examined the components of an effective apology in a study published in the 2004 Journal of Management. The researchers asked 90 business students to imagine they were running a company and that another business owner had caused their company to take a financial hit. They then varied the type of apology the offending party offered and compared the willingness of the injured party to continue the business relationship.

Their research found that the least effective apologies are those in which people shirk from truly taking responsibility for their errors and instead try to placate the wronged parties by shifting blame and offering some kind of compensation (say, offering a discount on future purchases). Apologies, they found, are most effective when the offending parties accept full responsibility for their actions, explain why the violation happened, demonstrate how they're planning to address the problem in the future, and offer, where appropriate, some form of reparation along with the apology.

In fact, if you fail to include each of those elements in your apology, you may do more harm than good. Jennifer K. Robbennolt, a professor at the University of Illinois College of Law, polled 145 professionals on their reaction to different kinds of apologies after a hypothetical accident in which a pedestrian was struck by a bicyclist. She found that 73 percent of the victims who received a full apology ("The accident was all my fault. I was going too fast and not watching where I was going.") were inclined to accept a settlement offer. Only 35 percent of those who received partial apologies ("I am so sorry that you were hurt. I hope you feel better soon.") were willing to settle. In fact, victims who received no apology at all were more inclined to settle than those who received a partial apology; 52 percent of those who received nothing but the settlement offer said they'd definitely or probably accept. "The partial apology can be interpreted as you saying, 'I'm sorry that you think I should apologize,'" Robbennolt says.

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