Top CEO Apologies and Lessons Learned from Them

By now we are sure you’ve seen Netflix CEO Reed Hastings’s apology for becoming arrogant and introducing the new pricing scheme without adequately explaining the reasons for the price increase. If you haven’t seen it yet, the apology is embedded below:

The apology has been met with a “too little, too late” attitude by most critics, and while it shows that Reed Hasting is attempting to make things right, the fact that he kept the price increase and used the apology to announce a new DVD-by-mail service, Qwikster, had many wondering how sincere he was. Most major company apologies are usually seen in similar ways; consumers don’t trust most corporations to begin with, and when that mistrust is validated it can ruin customer-company relationships.

Sometimes though, CEOs hit all the right marks and make an apology that repairs bridges and props stock prices back up. Below are what we feel are the four best CEO apologies from corporations in the last few years, and what other business owners can learn from them.

Mark Zuckerberg – Facebook

When it comes to Facebook, it feels like change is always on the horizon. You just get used to the last set of changes and BAM, added functionality. More often than not, these changes are for the better; the people working behind the scenes of Facebook spend a lot of time testing most of these changes before rolling them out, and after a month the user base is perfectly happy with their new social media site.

Occasionally though, they make a change that deserves the outrage it gets. Back in 2008 Facebook opened itself up and, suddenly, you didn’t have to be in a person’s network to see their information. This angered quite a few people who felt a small smidgeon of security knowing that there was an exclusivity barrier separating the internet from their information. They demanded more security and, surprisingly, Mark Zuckerberg responded in an open letter. Facebook worked to code better privacy controls and gave the user a little more control over who could see their information.

Of course, advertisers will always be able to access your information. But the proactive action that Mark Zuckerberg took did a lot to stabilize the choppy waters Facebook suddenly found itself in, and despite all the calls to boycott the service, many of us are still avid users.

Steve Jobs – Apple

Steve Jobs, being a very enigmatic and friendly person, has been able to craft a good public image for himself. He is seen more as a messenger or visionary than a CEO despite his obvious knack for business and value to Apple Corp. But being the mouth for a major corporations means that he is the one that is paraded out when things go wrong.

There have been quite a few hiccups in Apple’s history that required an apology from Mr. Jobs. One of the ones that have faded from memory is from when the iPhone first went on sale (can any of us even remember that far back?) Apple made the choice to drop their 8GB model’s price by $200 just two months after the phone went on sale and Apple fans were mad. Really mad. During this “crisis” it seemed like this affront to consumer relations was all people could talk about. So Apple, and thereby Steve Jobs, did what they felt they had to; they issued an apology and gave iPhone customers $100 in store credit. And that was the end of that. Apple’s iPhone went on to be a complete industry changer, trampling Blackberries, PDAs and becoming the standard for smartphone technology.

Then Antenna-gate struck. And, once again, the world freaked out. The highly touted iPhone 4 was not perfect and if you held the bottom left corner a little too hard, the space between two antennae was bridged and the phone could drop calls. While this in itself does not seem too terrible, Apple’s response to hold the phone differently resulted in a horrific amount of media backlash. Once again Jobs was pushed on stage to issue an apology along with a free case or a refund to affected users.

In the end there is one really strong lesson to be learned – don’t ever shrug your shoulders and expect your customers to fix the problem themselves. Had Apple been upfront about the issue then things may have gone differently, but their careless attitude strongly juxtaposed the perceived Apple brand and made for some great primetime news stories.

Akio Toyoda – Toyota

Do you remember when Toyota cars were out to kill their users? It was only a little over a year ago that the news broke that the gas pedals in newer Toyota cars were becoming stuck, rocketing the poor drivers within to speeds upwards of 90 miles an hour. And this did not seem to be an isolated case; every couple of days there would be another person explaining how terrified they were when their car couldn’t be decelerated.

Toyota paid their fines without admission of any wrongdoing and tried to clean up the mess left behind by this scandal. Their CEO apologized, halted manufacturing and the company did everything it could to rectify the problem However, it turned out that misplaced floor mats, not faulty wiring, caused most of the sticky pedal cases. This apology was not particularly effective like Apple’s or Facebook’s, but it does show what an errant story can do to a company’s reputation.

There has recently been a bit of backlash against the media for trying to prop up this story using scare tactics. The “deadly killer in your driveway” angle did a lot to help ratings, but in the end tattered a company’s reputation far more than many think is fair. It just goes to show that, when the news gets involved, a recall and apology sometimes won’t do. Be sure to follow any issues early on and don’t wait on reacting to problems with your company’s products – one or two days could translate to years of damage to your company’s image.

Brian Sharpies – HomeAway

This one is from a much lesser known company, but we felt we absolutely had to finish with it just because it shows another side to the world of corporate apologies. Sometimes people just don’t have a sense of humor, and some companies end up feeling a lot of heat because of it. During Superbowl XLV, HomeAway ran this ad. Do you remember the two seconds when the test baby got launched into the window? Well that brief moment caused quite the backlash, forcing the CEO to write a letter of apology.

What is so great about it is how tongue-in-cheek the entire letter is. He states that HomeAway does “…not believe the ad will result in an increase in violence towards babies, just as last year’s Super Bowl ad featuring Betty White didn’t lead to an increase in elderly women being tackled in parks.” He even finishes by saying that the ad generated fairly lackluster reviews, though did bring them quite a bit of business.

In the end, he is doing exactly what most of us would do in an overly PC world and is having a bit of fun with it. When it comes to running a business, you have to try and find as much fun as you possibly can.

If there is one thing all of these apologies have in common it is that, in the end, the CEOs swallowed their pride, apologized and tried to set things right as much as they could. In HomeAway’s case, they also made fun of their critics. While we can’t recommend that, we can say that you should always meet any problems head on. If you hide for too long, or make it seem like you don’t care about the problem, the media backlash could be critically damaging to both your company and your own reputation.

So be honest, empathetic and have a little fun when appropriate.