Photo: JD Lasica/Socialmedia.biz
This week, Netflix CEO Reed Hastings did what most CEOs hope they never have to do: apologise publicly. While in our personal lives, apologies are part and parcel of being in relationships with other human beings, in business, getting a CEO to apologise is sometimes like shoving a cat into a bathtub full of water. But when it is done skillfully, and with a sense of integrity, it can be a turning point for a company’s credibility.
(For the sake of this conversation, I’m not touching politician apologies. They are so pathetic, cliché and formulaic, I can’t stand the sight of them. I’m sure their wives feel the same way. Just sayin’.)
Whenever a CEO needs to apologise, it has to nail three key things: 1)The actual “I’m sorry” itself; 2) The explanation for the mistake; 3) The plan moving forward.
1) It’s Hard for Me to Say I’m Sorry
Too often, CEOs revert to flimsy apologies that sound apologetic but actually aren’t. Let me explain. When someone in your life hurts you and then says, “Well I’m sorry if that hurt you but…” do you feel satisfied? This was essentially what happened when Steve Jobs held his press conference for “Antennagate“. The message was basically, “I’m sorry, but this is not that big of a deal. And if you don’t like it, don’t buy it.” It was a very rare misstep for Jobs, whose public conversations normally leave us feeling inspired and closely connected to the brand.
In the case of Netflix, I give Reed Hastings high marks for completely owning his mistake:
“It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes. That was certainly not our intent, and I offer my sincere apology. I’ll try to explain how this happened.”
Hastings does a good job of articulating what people’s perceptions were – that Netflix lacked respect and humility. In other words, Netflix customers felt disrespected and mistreated. These are words that describe emotions, and are not by accident. Neuroscience tells us that we remember the emotional aspects of an experience better than anything else. If you mirror the listener’s emotion, they will forever remember that you understood them. Don’t forget these emotional trigger words – they show the listener that you empathise, and that you are sincere.
So far, so good, Mr. Hastings. Which leads me to:
2) How Could This Have Happened?
Here, Hastings also did an admirable job of explaining the necessity for splitting the two entities. He also owns his very real fear of Netflix becoming a dinosaur, unable to evolve quickly enough to keep up with the changes in the industry. He explains that given how different the two disciplines are (streaming vs. DVD), they will each function better as separate entities.
Ok, fair enough.
But why the rate hike? We heard multiple times that he wasn’t apologizing for the rate hike, but rather the poor CEO communication around the rate hike But then he failed to explain the rate hike again in easily repeatable terms. This is where he starts to lose us. Remember, people care MOST about the rate increase. Yet those justifications aren’t carefully messaged and unpacked for us in such a way that we can understand them, and appreciate Netflix’s position. I mean if Perez Hilton can explain the necessity for a rate increase in a digestible way, why couldn’t Netflix?
When you’re crafting your apology, remember to stay absolutely focused on the needs of your audience –be it investors or customers or both. Whatever they are most upset about, focus there FIRST. Even if you don’t agree with the sentiment. Even if you think people are missing the point. Start with their concerns first. Always.
3) What We’re Doing to Make it Better
This is where it gets tricky for Netflix. Their proposed solution is not in sync with what customers want. I’m not saying it always SHOULD be in sync. Look at Facebook: Zuck doesn’t apologise for anything. Half of my Facebook friends are up in arms over today’s redesign. But this is how Facebook rolls – users freak out, raise hell and scream for justice. But Mark Zuckerburg doesn’t apologise. Does he alienate people? Sure. But people seem to eventually get over it. I haven’t deleted my Facebook account yet. Have you? This strategy works well when you have no intention of changing course based on customer feedback.
Here Hastings’ apology gets bumpy. He seems to be all about transparency, and listening to customers, yet he relaunches their beloved DVD service under a different brand name. Netflix may have underestimated the connection people have to the Netflix brand. Replacing a beloved brand with one lacking any equity is risky. But I’m sure the smart folks at Netflix knew that, and made the best decision they could have made.
But for the Netflix user, it was like Dad apologized to his kids for divorcing their mum, and in the same breath said, “And here’s my new wife! You can call her mummy!”
Why is this so hard?
Apologies are filled with landmines, and require you to think 100% from the perspective of the customer or consumer. They are are also high risk: They express vulnerability, and imperfection. But apologies also reveal a level of humanity, and can create an opportunity for an even deeper connection with people.
It remains to be seen how Hastings’ apology will play out. But lest we forget, hell hath no fury like a customer scorned.
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