Friend and Foe: When to Cooperate, When to Compete, and How to Succeed at Both (18 page)

On December 8, 2005, Southwest Airlines Flight 1248 departed Baltimore and headed to Chicago Midway International Airport. Winter weather can be tough in Chicago, and on that day the pilots encountered heavy wind and blinding snow as they prepared to land.

The landing did not go well. The plane was unable to slow down and it tore past the runway. It rammed through a fence that separated the airport from the outside world. It continued to lurch into a road, plowing into cars along the way. By the time the plane had stopped, a six-year-old boy had been killed and 13 people had been injured. This was Southwest's first fatal accident in their 35-year history, and it goes without saying that it was a core violation.

Within hours, chief executive officer Gary Kelly expressed condolences:

This is a sad day for us here. There are no words to adequately convey our grief and sorrow over this tragedy. It was with great sadness that we learned of the death of a child who was in one of the vehicles hit by the aircraft. The entire Southwest family is grieving this loss and our thoughts and prayers go out to the child's family.

Southwest will do everything in our power to provide information and comfort to those who have been affected…

And he did. Gary immediately flew with his top executives to Chicago. He held an additional press conference in Chicago. He expressed sympathy for each person who had been harmed and he pledged to help those injured. He also pledged to implement any recommended action from the subsequent investigation.

To understand the success of this apology all we need to do is look at how the
Chicago Tribune
characterized Gary's apology: “swift” and “caring.” The impact on the airline was undetectable. In 2006, demand for Southwest Airlines flights rose by almost 8 percent, and the airline was more profitable than ever.

To understand everything Gary did right, we contrast his actions with an apology that went badly wrong.

Apologies are hard. And even a widely acknowledged genius can struggle to deliver an effective one. Had Steve Jobs, the CEO of Apple, paid attention to Gary's apology or studied the results from the German eBay study, he might have delivered a very different press conference than the one he held on July 16, 2010, to deal with “antennagate.”

As CEO of Apple, Steve Jobs launched a series of transformative products including the iMac, the iPod, iTunes, the iPhone, and the iPad, earning Apple—and Steve Jobs—a cult-like following and a reputation for creating products that are innovative, reliable, and fun. The value of Apple's stock rose dramatically as a result.

Against this backdrop, the launch of the iPhone 4 was an uncharacteristic stumble. Consistent with prior versions of the iPhone, this version had launched successfully: The iPhone 4 sold three million units in the first three weeks.

As sales continued to grow, however, early reviews of the iPhone 4 began to reveal a problem with the phone's reception. Merely touching the iPhone 4 in the wrong place, it turned out, disrupted the signal. It wasn't long before the blogosphere lit up with a firestorm of criticism.

Apple initially discounted these complaints. But then
Consumer Reports
, the publication from the independent consumer protection agency Consumers Union, delivered a damning verdict: They identified the defect as both real and something under Apple's control. Apple could no longer ignore their reception problem.

Like Ritz-Carlton and Lexus, Steve Jobs had an opportunity to set things right. After all, a sincere apology had worked for Gary Kelly after his airline had killed a young boy and for Baptist Hospital after causing brain damage to a small child. Surely an apology could mollify customer concerns about phone reception. So on July 16, 2010, Apple held a press conference to address the iPhone 4 defect: the perfect opportunity for Jobs and Apple to regain the trust and admiration of their customers and shareholders.

But a sincere apology proved too much for the mercurial Jobs. Even as he faced the press and offered to help Apple customers contend with their problem, he did so grudgingly, haughtily, and without a modicum of contrition. He even used the words “I have no apology.”

Jobs offered customers a free cell phone case, but little in the way of an apology—just like the German eBay customers who were offered a small amount of compensation, but no apology. In fact, Jobs actually managed to express disrespect for Apple customers, Apple shareholders, and the media covering the story, by making light of the situation and flaunting Apple's reputation for creating great products. During the press conference, Jobs played the satirical “The iPhone Antenna Song” music video created by Jonathan Mann, which includes the lyrics: “If you don't want an iPhone 4 don't buy it. If you bought one and you don't like it, bring it back…but you know you won't.”

Jobs later claimed to be “deeply sorry,” but added, “To those investors who bought the stock and are down by five dollars, I have no apology.” And then he went on to blame the media for their coverage and for “blow[ing the problem] out of proportion.”

Rather than viewing the press conference as an opportunity to build cooperation, Jobs adopted a competitive stance. Apple has since continued to develop terrific technological products, but this episode represented a major stumble for an otherwise storied company.

When we look at the stark contrast between Kelly's apology for the Southwest crash and Jobs's response to the antenna episode, it's easy to see the difference between an effective apology and an unsuccessful one. But what exactly makes an apology effective? Here are the key ingredients.

Speed:
One of the most important aspects of Kelly's apology on behalf of Southwest Airlines—and what set his apology apart from every prior apology from a major airline—is how quickly he apologized. In this case, speed signaled his concern. Speed was also one of the most salient aspects of the apology Baptist Children's Hospital gave the Sosas. Rather than delay an official comment or offer vague claims about what had happened, Baptist Hospital
immediately
informed the Sosas of everything they knew about the mistakes they had made.

When you screw up, time is of the essence.

Candor:
An effective apology is transparent; in other words, the perpetrator must be open and candid in disclosing what went wrong.

As the Sosas explained, Baptist's full disclosure of their mistakes was a critical step in regaining their trust. As Kaelyn's mother later explained, Baptist's candid disclosure “helped her to move past the initial shock.”

Vulnerability:
Earlier in the book, we emphasized the role of vulnerability in building trust. When it comes to
re
building trust, vulnerability is again a critical ingredient. Recall how Baptist Children's Hospital revealed their mistakes to the Sosas. Ironically, part of what helped Baptist avoid a lawsuit was their decision to candidly disclose their errors—which also made them vulnerable to a lawsuit.

We can even see the effect of vulnerability in rebuilding trust among primates. After fighting, some monkeys and apes will “apologize” by putting one of their fingers in the victim's mouth. This is a risky move. With powerfully set jaws, a disgruntled monkey could easily bite off the finger. This vulnerable move, however, serves a crucial purpose: It sends a powerful signal that they trust their former adversary.

Focus on the victim:
Effective apologies demonstrate concern for the victim. As obvious as this statement sounds, all too often apologizers remain self-focused.

Consider the following story. One afternoon, Stephen King did what he usually did after a morning of writing: He headed out for a walk. He was strolling along the shoulder of an empty country road in Maine when he met Bryan Smith. Bryan was driving his minivan at about 45 miles per hour, but was paying closer attention to his Rottweiler rummaging through his cooler in the back than he was to the road ahead. In fact, he was so oblivious to where he was going that when he hit King, he thought he had collided with a small deer. When Bryan saw the writer's glasses that had somehow flown into his front seat, he began to realize that the situation was more serious.

It turns out that King hit the windshield so hard that he flipped over the van. Part of his scalp was torn away, he had a collapsed lung, and had broken his ribs, knee, and hip, and shattered one of his legs. King would go on to require five operations and experienced years of incredible pain.

As King recalled, while waiting with Bryan for help to arrive, Bryan turned to him and commiserated, “Ain't the two of us just had the shittiest luck.” Of course, the accident was not great for Bryan, but by classifying his situation as unlucky as King's, Bryan reflected an incredible amount of self-focus. Similarly, consider the self-focused apology Tony Howard, the CEO of BP, delivered after the Deepwater Horizon oil rig explosion. When the rig exploded in 2010 it killed 11 workers and produced the largest marine oil spill of all time. A month after the explosion, Howard delivered this apology: “We're sorry for the massive disruption it's caused their lives. There's no one who wants this over more than I do. I'd like my life back.” The point is, while the importance of being focused on the person to whom you are apologizing seems obvious, in the moment it is often surprisingly difficult.

Promise to change:
Effective apologies also articulate a plan of action. Southwest's Kelly promised to implement any recommended action from the subsequent investigation. And following the botched MRI, Baptist Hospital instituted new procedures. For example, MRIs are now only conducted on a scheduled basis with an anesthesiologist or nurse anesthetist present. Pediatric crash carts equipped with child-sized resuscitation equipment are now readily accessible. In addition, the hospital has installed Code Purple buttons to summon help specifically for pediatric emergencies.

In our own research, we have found that a promise to change is one of the most important components of an apology. In one study, we had participants make a series of repeated monetary decisions with a partner (really a confederate of the experiment) who behaved in an initially untrustworthy way. Following the transgression, the confederate behaved in one of four ways: a) they communicated no message; b) they offered a simple apology; c) they promised to change (without an apology); or d) they offered a simple apology accompanied by a promise to change. Though the simple apology helped, it was the promise to change that had the most impact on how much trust their partner placed in them in subsequent rounds of the experiment.

The famed sociologist Erving Goffman argued that a successful apology splits the apologizer into essentially two different people: One is the individual responsible for the transgression, and the other is the individual who deserves a second chance. Following a successful apology, the second individual should be perceived to be fundamentally different from the first. When this happens, relationships can be repaired.

The promise to change is what helps split the person in two: the “old me” who committed the violation and the “new me” who is a completely different person. We see this in the Baptist Children's Hospital example. Upon seeing the changes they implemented, Kaelyn's mother remarked, “It was a whole new procedure,” and her father claimed that the hospital's dedication to changing their procedures helped him forgive the hospital.

Penance:
Although apologies and promises to change are surprisingly powerful, offers of penance can also make a profound difference. What do we mean by penance? Anything that involves making amends to the victim.

In many traditional cultures, gift giving is an essential part of the relationship repair process. Even if the gift is of negligible monetary value (though the costlier, the better) it is a symbolic gesture that signals contrition. From a fruit basket to free medical care for life, it pays to make amends.

But as we saw from the results of the German eBay study, it isn't just any material offering that will do; to be successful, the penance has to send the right
signal
.

Signals are nonverbal messages that communicate information that is very difficult, or even impossible, to prove. To send a signal, we need to engage in an effortful action. When you go for an interview, you could tell the interviewer that you are really interested in working at their company. But to
signal
your interest, you would need to prepare for the interview by doing background research. Similarly, you might tell someone that you are committed to your relationship with them. But to
signal
your commitment you might pick them up from the airport or buy them a meaningful gift. It is always helpful to say the right words, but sometimes signals speak louder.

Colin Camerer at Caltech characterizes signals along two dimensions:
clarity
and
power
. Clear signals communicate a message unambiguously. Powerful signals communicate a message in a credible way.

To be powerful, a signal needs to be costly—in time, money, or some other resource. A really powerful signal is so costly that only someone truly committed could afford to make that type of investment. For example, suppose Charlie Sheen wants to signal his commitment to a new relationship. So, he goes out and buys his date a dozen red roses. In a culture that associates red roses with romance, this is a
clear signal
. Sending a dozen red roses, however, is
not
a powerful signal. Why? Charlie Sheen can easily afford to buy thousands of women a dozen red roses.

So what can someone do to send a powerful signal of their commitment to a romantic partner? We actually have a social norm to solve exactly this problem: a diamond ring. The reason a diamond ring has become the standard symbol of a lifetime commitment (in addition to aggressive marketing by the diamond industry) is the fact that it is
so
costly that no one would make the investment unless they were truly committed. If you are deeply committed, you can afford an expensive ring. If you are not deeply committed, however, a diamond ring is prohibitively expensive.

And the cost of the ring is an essential characteristic of the signal. In fact, we even have a culturally entrenched guide for how much people should spend: It is a function of one's income (three months' salary in the United States). Powerful signals need to be costly to prove that you are truly committed.

In addition to the other key actions Baptist Hospital took, Baptist Hospital offered to provide free medical care for all of Kaeyln's future needs. Kaelyn would need years of care, and this offer not only addressed a key concern for Kaeyln's family, but it was costly for the hospital, and hence a powerful signal of their remorse.

Taken together, these examples highlight the following critical insight: Trust can easily be broken. So the question isn't whether or not we'll ever commit a transgression, but when. And when we do miss the mark, we need to be prepared to respond quickly, candidly, and powerfully.